Document:

Exhibit 10.64

 

OPTION TO PURCHASE
REAL ESTATE

RIGHT OF FIRST REFUSAL

 

MADE
September 9,1999, by and between:

 

	
  Grantor/Sellers:

  	
   

  	
  Robert T. Sackrider and Marilyn G. Sackrider, H&W, whose address
  is 1633 East Michigan Avenue, Battle Creek, Michigan 49014

  
	
   

  	
   

  	
   

  
	
  and
  Grantee/Buyers:

  	
   

  	
  Nottawaseppi Huron Band of Potawatomi (a.k.a. Huron Potawatomi,
  Inc.), a Federally Recognized tribe, whose address is 2221 11⁄2 Mile Road,
  Fulton, Michigan 49052.

  

 

concerning the following
described property situated in the Township of Emmett, Calhoun County,
Michigan.

 

Commencing at
the West 1/4 post of Section 13, Town 2 South, Range 7 West, Emmett
Township, Calhoun County, Michigan; Thence North 00 degrees 03’28” East along
the West line of said Section, 46.99 feet to the southerly line of the exit
ramp for I-94, as recorded in Liber 898, Page 004 in the office of the Register
of Deeds for Calhoun County, Michigan; Thence North 89o06’09” East along said
southerly line, 214.69 feet; thence 362.37 feet along the arc of a curve to the
left whose radius measures 362.0 feet and whose chord bears north 60o25’31”
east, 347.43 feet; thence north 31o44’56” east, 263.62 feet; thence north
59o52’54” east, 81.39 feet to the Place of Beginning; thence continuing north
59o52’54” east 181.87 feet; thence south 78o01’12” east, 472.30 feet; thence
south 76o27’00” east, 1662.72 feet; thence south 00o04’24” west, 35.27 feet;
thence north 89o58’25” west, 297.00 feet to a Point 99 feet north of the
northwest corner of lot 21 of the Supervisor’s Plat of Wagner Acres, as
recorded in Liber 11 of Plats on Page 21 in the office of the Register of Deeds
for Calhoun County, Michigan, south 00o04’24” west along the west line of said
Plat, 2091.58 feet to the centerline of Michigan Ave.; thence north 55o29’21”
west along said centerline, 2350.98 feet; thence north 00o03’28” east, 1191.07
feet to the Place of Beginning.

 

and as shown on the attached
Exhibit A, hereinafter referred to as “the Premises.”

 

 

I.                                         OPTION
TO PURCHASE

 

1.                                       Grant
of Option.  The Grantors, in consideration
of the sum of Two Hundred Sixteen Thousand ($216,000.00) Dollars, (the Option
Price), receipt of which is hereby acknowledged, hereby convey and warrant to
the Grantee the option to purchase the above described premises.  The option price is non-refundable.  It is applicable to the purchase price as
specifically provided below.

 

2.                                       Assignment,
Exercise.  It is the intention of
the Grantee to exercise this option as soon as approval can be obtained from
the Bureau of Indian Affairs for transfer of the property from fee to
trust.  The Grantee shall have the right
to direct that conveyance under this option be made directly to the BIA in
trust for the Nottawaseppi Huron Band of Potawatomi (a.k.a. Huron Potawatomi,
Inc.), a Federally Recognized tribe.

 

3.                                       Terms
and Conditions.  In the event the
option is exercised, the sale shall be consummated on the following terms and
conditions:

 

	
  Sale Price:

  	
   

  	
  Three
  Million Five Hundred and Forty-three Thousand Three Hundred Dollars
  ($3,543,300.00).

  
	
   

  	
   

  	
   

  
	
  Conveyance:

  	
   

  	
  By statutory
  form of warranty deed, with farmland language, and subject to easements and
  restrictions of record.  The parties
  specifically understand that the land in the Supervisor’s plat of Wagner
  Acres, Liber 11, page 2 1, may be bound by deed restrictions, and the
  conveyance will be subject to such restrictions.

  
	
   

  	
   

  	
   

  
	
  Owner’s
  Title Insurance:

  	
   

  	
  In the
  amount of $3,543,300.00, purchased by Seller, from First American Title
  Insurance Co.

  
	
   

  	
   

  	
   

  
	
  Prorations:

  	
   

  	
  Taxes
  prorated as prepaid, by due date method, as of the date of closing.

  
	
   

  	
   

  	
   

  
	
  Special
  Assessments:

  	
   

  	
  Seller will
  pay off any special assessments which are a lien as of the date of this
  option.

  

 

2

 

	
  Land
  Division:

  	
   

  	
  No further
  land division rights are conveyed with the property.

  
	
   

  	
   

  	
   

  
	
  Closing:

  	
   

  	
  Seller shall
  tender closing within 21 days of the date of exercise of the option.

  
	
   

  	
   

  	
   

  
	
  Closing
  Costs:

  	
   

  	
  Seller will
  pay for an owner’s policy of title insurance and for transfer taxes
  statutorily levied on the Seller.  All
  other closing costs will be paid by Purchaser.

  

 

4.                                       Manner
of Exercising Option.  The Grantee
may exercise the option by written notice, signed by the Grantee, and delivered
to Seller.  Grantee shall provide such
notice by personal delivery, effective upon delivery, or by certified mail,
return receipt requested, effective as of the date of deposit with the U.S.
Postal Service.

 

5.                                       Time
For Exercise of Option.  This option
way be exercised at any time by the Purchaser prior to the time stated below for
lapse.

 

6.                                       Lapse,
Application of Option Fee, and Extension. 
This option will lapse one year from the date hereof.  During the first year from the date hereof,
the sum of $200,000 of the option fee is applicable to the Purchase Price.

 

Provided:  The Grantee shall have the right to pay an
additional $216,000 (for a total paid to the Grantor of $432,000) on or before
the first business day after the one year anniversary hereof, in which case the
date for lapse of this option is extended until two years from the date
hereof.  50% of the total option
payments, or $216,000, shall apply on the purchase price in the event the
option is exercised in its second year.

 

Provided
further, the Grantee shall have the right to pay an additional $216,000 (for a
total paid of $648,000), on or before the first business day after the second
anniversary hereof, in which case the date for lapse of this option is extended
until three years from the date hereof. 
25% of the total option payments, or $162,000, shall apply on the
purchase price in the event the option is exercised in its third year.

 

The amounts applied to the
purchase price, described above, are not cumulative.

 

3

 

7.                                       Cancellation
Rights of Grantee, and Refund.  Deleted.

 

8.                                       Crops.  During the option period, the Grantor will
have the right to continue to farm the property and all crops grown thereon
shall be wholly the property of the Seller. 
If Grantor has crops in the field at the time of exercise of the option,
that will not be able to be harvested, the Purchaser will pay the Grantor at
the time of close an additional $200.00 per acre (or fraction thereof) if the
option is exercised before July 1, with the price to be $350.00 per acre
(or fraction thereof) if the option is exercised on or after July 1.

 

If the Grantee
shall do any damage to existing crops as a result of testing, engineering or
any other activity on the land, the Grantee shall repay the Grantor, on demand,
at the rate stated above for each acre, or fraction thereof, damaged.

 

9.                                       Access
to the Property.  During the option
period, the Grantee shall have access to the premises for purposes of any
inspection, engineering, study, evaluation, test or other purpose. The Grantee
will give the Grantor reasonable advance notice before coming onto the
property.  The Grantee will restore any
soil moved and return the land to its existing condition after any such event,
and will pay for any damaged crops as provided above.

 

10.                                 Covenant
of Title.  The Grantors do hereby
covenant that they have marketable title to the premises, free of lien or other
encumbrance, other than such deed restrictions as may existed on the platted
parcel contained in that description. 
The Seller will obtain a title commitment promptly upon execution of
this option.  If, within 30 days of the
date of delivery of that commitment Purchaser determines that there is a lien,
encumbrance or other cloud on title such that the property will not be acceptable
by the BIA for conveyance to trust, the Grantee may terminate this option and
all payments, with the exception of $16,000, will be refunded to Grantee.

 

11.                                 Tax
Free Exchange.  The Grantors may
convey this property as part of a 1031 Tax Free exchange.  Grantee will cooperate fully in such exchange.

 

12.                                 Berm.  After conveyance of the property, the
Grantee covenant that any construction on the property will include a 10 foot
berm, and evergreen plantings or other protection such that the subdivision to
the East of the property will be reasonably protected from noise, light and
other activity on the property.  This is
a personal covenant and shall survive the closing.  It may be enforced by the Grantor or by any lot owner in Wagner
Acres.

 

4

 

II.                                     RIGHT
OF FIRST REFUSAL

 

13.                                 Grant.  As part of the exercise of this option, the
Grantors will grant to the Grantee hereof a right of first refusal on the
property indicated on the attached map, shown as Parcel F, with the legal
description also attached. This right shall lapse on December 31, 2002, on
the following terms:

 

a.                                       If
Seller desires to sell the Parcel subject to the right of first refusal and the
receive a valid offer to purchase, they shall transmit a copy of the offer to
the party with the right of first refusal.

 

b.                                      Purchaser
shall have thirty (30) days after notice to determine whether it wishes to
purchase the Parcel upon the same terms and conditions as in the valid offer,
or to waive its right to purchase the Parcel and permit Seller to sell the
Parcel to the offeror.

 

c.                                       If,
at the-end of thirty (30) days, Purchaser has not notified Seller of its intent
to purchase, Purchaser shall be deemed to have waived its right to purchase and
Seller may proceed to close the sale with the offeror pursuant to the valid
offer.

 

d.                                      If
Seller does not sell the premises to the offeror pursuant to the offer of
purchase, the Parcel shall remain subject to Purchaser’s right of first refusal
as provided in this instrument.

 

e.                                       If
the Parcel is sold in its entirety pursuant to the valid offer to purchase,
this right of first refusal shall terminate.

 

f.                                         Notices
to be delivered pursuant to this right of first refusal shall be in writing and
mailed to the party to receive the notice, by certified mail, return receipt requested,
at the address listed for the addressee in the then-current telephone directory
for the community in which the addressee’s principal office is located. All
notices shall be considered delivered on the day after mailing.

 

14.                                 Interpretation.  This agreement shall be interpreted under
the laws of the state of Michigan. It embodies the entire understanding of the
parties pertaining to the subject matter of this agreement.

 

15.                                 Binding
Effect.  This agreement shall bind
and benefit the heirs, Personal Representatives, executors, successors and
assigns of the parties, except as otherwise specifically stated above.

 

5

 

16.                                 Gender,
Number.  Where context requires,
references made in the one gender or number may be read to include the
appropriate gender and number.

 

17.                                 Memorandum.  The parties agree that, upon the request of
Grantee, they will execute and record a memorandum of this option.

 

18.                                 Limited
Waiver of Sovereign Immunity.  The
covenants made by the Grantee in paragraphs 8 and 12 hereof may be enforced by
Arbitration before a party to be mutually agreed upon or, in default thereof,
by the American Arbitration Association. 
The Arbitrator’s award shall be final and binding, and may include an
award of the costs of arbitration (but not the parties’ own legal fees).  Such award may be enforced in any Federal
Court of competent jurisdiction or in the Circuit Court of Calhoun County,
Michigan.  The sovereign immunity of the
Grantee is waived only as specifically provided in this paragraph, and for no
other purposes.

 

A copy of the
resolution of the tribal counsel authorizing the execution of this agreement
and the waiver contained in this paragraph, is attached hereto as Exhibit A.

 

Signed on the date first above
written.

 

	
  Signed in
  the presence of:

  	
   

  	
  Signed:

  
	
   

  	
   

  	
   

  
	
   /s/ Joe Lloyd

  	
   

  	
  /s/ Robert
  T. Sackrider

  	
   

  
	
   

  	
   

  	
  Robert T.
  Sackrider

  
	
   

  	
   

  	
   

  
	
   /s/ Ronald J. DeGraw

  	
   

  	
  /s/ Marilyn
  G. Sackrider

  	
   

  
	
   

  	
   

  	
  Marilyn G.
  Sackrider

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Nottawaseppi
  Huron Band of Potawatomi (a.k.a.

  Huron Potawatomi, Inc.), a Federally

  Recognized Tribe

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   /s/ Amos Day

  	
   

  
	
   

  	
   

  	
  By:  Amos Day

  
	
   

  	
   

  	
  Its:  Chairman

  

 

6

 

AMENDMENT TO

OPTION TO PURCHASE REAL ESTATE

RIGHT OF FIRST REFUSAL

Dated: September 9, 1999

 

This Amendment
to the September 9, 1999 “Option to Purchase Real Estate Right of First
Refusal” is entered into on this 9th day of September, 2002, by and
between:

 

	
  Grantor/Sellers:

  	
   

  	
  Robert T.
  Sackrider and Marilyn G. Sackrider, H&W, whose address is 1633 East
  Michigan Avenue, Battle Creek, Michigan 49014.

  
	
   

  	
   

  	
   

  
	
  and
  Grantee/Buyers:

  	
   

  	
  Nottawaseppi
  Huron Band of Potawatomi (a.k.a. Huron Potawatomi, Inc.), a Federally
  Recognized tribe, whose address is 2221 1 1⁄2 Mile Road, Fulton, Michigan
  49052.

  

 

The parties hereby
agree to the following amendments:

 

I.                                         OPTION
TO PURCHASE

 

1.                                       Grant
of Option Extension. The Grantors, in consideration of the sum of Two Hundred
Sixteen Thousand and no/100 Dollars ($216,000.00) (the Option Price), receipt
of which is hereby acknowledged, hereby convey and warrant to the Grantee an
extension to the September 9, 1999 Option to Purchase the premises therein
described.  The Option extension price
is non-refundable, and is not applicable to the purchase price.

 

2.                                       Assignment
Exercise.  The Grantee shall have
the right to direct that conveyance under this Option be made directly to the
Bureau of Indian Affairs in trust for the Nottawaseppi Huron Band of Potawatomi
(a.k.a. Huron Potawatomi, Inc.), a Federally Recognized tribe.  Grantor and Grantee acknowledge that Grantee
may authorize Gaming Entertainment (Michigan), LLC, to exercise this Option and
acquire the subject property in its own name subject to an agreement between
Grantee and Gaming Entertainment (Michigan), LLC.

 

3.                                       Terms
and Conditions.  In the event the Option
is exercised, the sale shall be consummated on the following terms and
conditions.

 

	
  Sale Price:

  	
   

  	
  The base
  price for the real estate shall be Three Million Five Hundred Forty-three
  Thousand Three Hundred and no/100 Dollars ($3,543,300.00).  The base price shall be increased
  Forty-five Thousand and no/100 Dollars ($45,000.00) in the event the Option
  is not exercised before February 5, 2003 and the purchase price shall be
  increased Forty-five Thousand and no/100 Dollars (45,000.00) on the 9th
  day of each March, April, May, June, July, August, September, and
  February thereafter until the Option is exercised.

  
	
   

  	
   

  	
   

  
	
  Owner’s
  Title Insurance:

  	
   

  	
  Purchased by
  Seller, from First American Title Insurance Company in the amount of the purchase
  price.

  

 

7

 

	
  Prorations:

  	
   

  	
  Property
  taxes, prior to the year of closing, shall be paid by Seller.  The year of closing taxes on the property
  herein sold by Seller to Buyer shall be prorated as of the date of closing on
  a calendar year basis.  In the event
  the actual amount to be billed for the current tax year is not available, the
  prior year’s taxes shall be used in computing proration.  Seller shall pay that portion of the total
  taxes billed in the year of closing which bears the same ratio as the number
  of days in the year of closing prior to the closing date bears to 365 days.

  

 

4.                                       Lapse,
Application of Option Fee, and Extension. 
This Option shall extend for one (1) year and one (1) day from
September 9, 2002, and shall expire at midnight on September 10,
2003.  None of the Option payments paid
by Grantee under the September 9, 1999 Option or paid upon this Amendment
or any subsequent option extension payment shall apply upon the purchase price.

 

Provided:  The Grantee shall have the right to pay an
additional Two Hundred Sixteen Thousand and no/100 Dollars ($216,000.00) on or
before midnight September 10, 2003, in which case the date for lapse of
this Option is extended until midnight September 11, 2004.  Grantee shall have the right to extend this
Option for additional one (1) year and one (1) day terms by payment of the
additional sum of Two Hundred Sixteen Thousand and no/100 Dollars ($216,000.00)
for each such extension.  As noted
above, none of the Option extension payments shall apply upon the purchase
price and the Option price shall continue to increase Forty-five Thousand and
no/100 Dollars ($45,000.00) on the 9th day of each February, March, April, May,
June, July, August and September of each Option extension year.

 

In all other
respects, the Option to Purchase Real Estate Right of First Refusal dated
September 9, 1999 shall remain in full force and effect as originally
executed.

 

8

 

Signed on the date first above
written.

 

	
  Signed in
  the presence of:

  	
   

  	
   

  
	
   

  	
   

  	
  Signed:

  	
   

  
	
   

  	
   

  	
   

  
	
   /s/ Ronald J. DeGraw

  	
   

  	
  /s/ Robert
  T. Sackrider

  	
   

  
	
   

  	
   

  	
  Robert T.
  Sackrider

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   /s/ John M. Schafer

  	
   

  	
  /s/ Marilyn
  G. Sackrider

  	
   

  
	
   

  	
   

  	
  Marilyn G.
  Sackrider

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Nottawaseppi Huron Band of

  Potawatomi (a.k.a. Huron

  Potawatomi, Inc.), a Federally

  Recognized Tribe

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   /s/ Louise Steenstra

  	
   

  	
  /s/ Gilbert
  Holliday

  	
   

  
	
   

  	
   

  	
  By: Gilbert
  Holliday

  
	
   

  	
   

  	
  Its: Acting
  Chairman

  

 

9Exhibit 10.1

 

CALDERA INTERNATIONAL, INC

 

2002 OMNIBUS STOCK INCENTIVE PLAN

 

1.                                       Establishment and Purpose.

 

There is hereby adopted the
Caldera International, Inc. 2002 Omnibus Stock Incentive Plan (the
“Plan”).  The Plan shall be in addition
to (but except as provided in Section 3(a) below shall not supplant or be
construed to amend or terminate) the Caldera Systems, Inc. 1999 Omnibus Stock
Incentive Plan.  The Plan is intended to
promote the interests of the Company and the stockholders of the Company by providing
officers, other employees of the Company, directors who are not employees of
the Company, and other persons who are expected to make a long-term
contribution to the success of the Company with appropriate incentives and
rewards to encourage them to enter into and continue in the employ of the
Company and/or to acquire a proprietary interest in the long-term success of
the Company, thereby aligning their interest more closely to the interest of
stockholders.

 

2.                                       Definitions.

 

As used in the Plan, the
following definitions apply to the terms indicated below:

 

(a)                                  “Award Agreement” shall mean the written
agreement between the Company and a Participant evidencing an Incentive Award.

 

(b)                                 “Board
of Directors” shall mean the Board of Directors of the Company.

 

(c)                                  “Cause,”
when used in connection with the termination of a Participant’s employment by
the Company, shall mean (i) the willful and continued failure by the
Participant substantially to perform his duties and obligations to the Company
(other than any such failure resulting from his incapacity due to physical or
mental illness) or (ii) the willful engaging by the Participant in misconduct
that is materially injurious to the Company. 
For purposes of this Section 2(c), no act, or failure to act, on a
Participant’s part shall be considered “willful” unless done, or omitted to be
done, by the Participant in bad faith and without reasonable belief that his
action or omission was in the best interest of the Company.  The Committee shall determine whether a
termination of employment is for Cause.

 

(d)                                 “Change
in Control” shall mean any of the following occurrences:

 

(i)                                     any
“person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act
(other than the Company, any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company), is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 50% or more of the
combined voting power of the Company’s then outstanding securities;

 

 

(ii)                                  during
any period of not more than two consecutive years (not including any period
prior to the adoption of the Plan), individuals who at the beginning of such
period constitute the Board of Directors and any new director (other than a
director designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (i), (iii) or (iv) of this
Section) whose election by the Board of Directors or nomination for election
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute at least a majority thereof;

 

(iii)                               the stockholders of the
Company approve a merger or consolidation of the Company with any other
corporation, other than (A) a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation or (B) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no “person” (as herein above defined) acquires
more than 50% of the combined voting power of the Company’s then outstanding
securities; or

 

(iv)                              the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets.

 

(e)                                  “Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

(f)                                    “Committee”
shall mean the Compensation Committee of the Board of Directors.  The Committee shall consist of two or more
persons each of whom is an “outside director” within the meaning of
Section 162(m) of the Code and a “Non-Employee Director” within the
meaning of Rule 16b-3 under the Exchange Act (or who satisfies any other
criteria for administering employee benefit plans as may be specified by the
Securities and Exchange Commission in order for transactions under such plan to
be exempt from the provisions of Section 16(b) of the Exchange Act).

 

(g)                                 “Company”
shall mean, Caldera International, Inc., a Delaware corporation.

 

(h)                                 “Common
Stock” shall mean the common stock of the Company, no par value per share.

 

(i)                                     “Disability”
shall mean: (1) any physical or mental condition that would qualify a
Participant for a disability benefit under the long-term disability plan
maintained by the Company or a Subsidiary of the Company and applicable to such
Participant; or (2) when used in connection with the exercise of an Incentive
Stock Option following termination of employment, disability within the meaning
of Section 22(e)(3) of the Code.

 

2

 

(j)                                     “Effective
Date” shall mean the date upon which this Plan is adopted by the Board of
Directors.

 

(k)                                  “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended from time to
time.

 

(l)                                     “Executive
Officer” shall have the meaning set forth in Rule 3b-7 promulgated under the
Exchange Act.

 

(m)                               “Exercise
Date” shall mean the date on which a Participant may exercise an Incentive
Award.

 

(n)                                 “Fair
Market Value” of a share of Common Stock, as of a date of determination, shall
mean (i) the closing sales price per share of Common Stock on the national
securities exchange on which such stock is principally traded for the last
preceding date on which there was a sale of such stock on such exchange, or
(ii) if the shares of Common Stock are not listed or admitted to trading on any
such exchange, the closing price as reported by the Nasdaq Stock Market for the
last preceding date on which there was a sale of such stock on such exchange,
or (iii) if the shares of Common Stock are not then listed on the Nasdaq Stock
Market, the average of the highest reported bid and lowest reported asked
prices for the shares of Common Stock as reported by the National Association
of Securities Dealers, Inc. Automated Quotations System for the last preceding
date on which there was a sale of such stock in such market, or (iv) if the
shares of Common Stock are not then listed on a national securities exchange or
traded in an over-the-counter market, such value as determined by the Committee
in good faith.

 

(o)                                 “Incentive
Award” shall mean an Option, Tandem SAR, Stand-Alone SAR, Restricted Stock
grant, Phantom Stock grant or Stock Bonus granted pursuant to the terms of the
Plan.

 

(p)                                 “Incentive
Stock Option” shall mean an Option that is an “incentive stock option” within
the meaning of Section 422 of the Code.

 

(q)                                 “Issue
Date” shall mean the date established by the Company on which certificates
representing shares of Restricted Stock shall be issued by the Company pursuant
to the terms of Section 10(e)of the Plan.

 

(r)                                    “Non-Qualified
Stock Option” shall mean an Option that is not an Incentive Stock Option.

 

(s)                                  “Option”
shall mean an option to purchase shares of Common Stock granted pursuant to
Section 7 of the Plan.

 

(t)                                    “Participant”
means any person who is both eligible to receive an Incentive Award pursuant to
the Plan (as set forth in Section 5) and to whom an Incentive Award is
granted pursuant to the Plan, and, upon his or her death, his or her
successors, heirs, executors and administrators, as the case may be.

 

(u)                                 “Phantom
Stock” shall mean the right, granted pursuant to Section 11 of the Plan,
to receive in cash the Fair Market Value of a share of Common Stock.

 

3

 

(v)                                 “Plan”
shall mean this 2002 Omnibus Stock Incentive Plan, as amended from time to
time.

 

(w)                               “Reference
Value” shall mean, with respect to Stand-Alone SARs, the greater of the Fair
Market Value or the value given by the Compensation Committee.

 

(x)                                   “Restricted
Stock” shall mean a share of Common Stock that is granted pursuant to the terms
of Section 10 hereof and that is subject to the restrictions set forth in
Section 10 of the Plan.

 

(y)                                 “Rule
16b-3” shall mean Rule 16b-3 promulgated under the Exchange Act.

 

(z)                                   “Section 162(m)”
shall mean Section 162(m) of the Code and the regulations promulgated
thereunder.

 

(aa)                            “Securities
Act” shall mean the Securities Act of 1933, as amended from time to time.

 

(ab)                           “Stand-Alone
SAR” shall mean a stock appreciation right granted pursuant to Section 9
of the Plan that is not related to any Option.

 

(ac)                            “Stock
Bonus” shall mean a bonus payable in shares of Common Stock granted pursuant to
Section 12 of the Plan.

 

(ad)                           “Subsidiary”
shall mean a “subsidiary corporation” within the meaning of Section 424(f)
of the Code.

 

(ae)                            “Tandem
SAR” shall mean a stock appreciation right granted pursuant to Section 8
of the Plan that is related to an Option.

 

(af)                              “Termination
of employment,” or words of similar import, in the Plan shall be deemed, (i)
when applied to non-employee Directors, to mean “termination of service as a
director,” and (ii) when applied to employee-Directors, to mean “termination of
service as an employee and a director.” 
Reference to “termination of employment,” or words of similar import, in
the Plan shall not be deemed to apply to persons who were not employees or a
director of the Company or a Subsidiary of the Company.

 

(ag)                           “Vesting
Date” shall mean the date established by the Committee on which an Incentive
Award may vest.

 

3.                                       Stock
Subject to the Plan.

 

(a)                                  Shares Available for Awards.

 

The
maximum number of shares of Common Stock reserved for issuance under the Plan
shall be 1,500,000 shares (subject to adjustment as provided herein).  The total number of shares reserved for
issuance hereunder may be authorized but unissued Common Stock or authorized
and issued Common Stock held in the Company’s treasury or acquired by the
Company for the purposes of the Plan. 
The Committee may direct that any stock certificate evidencing shares
issued

 

4

 

pursuant
to the Plan shall bear a legend setting forth such restrictions on
transferability as may apply to such shares pursuant to the Plan.  The grant of a Tandem SAR shall not reduce
the number of shares of Common Stock with respect to which Incentive Awards may
be granted pursuant to the Plan.  Upon
the exercise of any Tandem SAR, the related Option shall be canceled to the
extent of the number of shares of Common Stock as to which the Tandem SAR is
exercised and, notwithstanding the foregoing, such number of shares shall no
longer be available for Incentive Awards under the Plan.  Subject to adjustment under
Section 3(c) below, the maximum number of shares of Common Stock that may
be issued under the Plan shall be increased as of November 1 each year,
beginning November 1, 2003, by three percent (3%) of the total number of
shares of Common Stock that are issued and outstanding on the immediately
preceding October 31st. 
This increase shall be in lieu of the increase provided for in
Section 3(a) of the Caldera Systems, Inc. 1999 Omnibus Stock Incentive
Plan following the increase scheduled for November 1, 2002 pursuant to the
terms of that plan, and Section 3(a) of the Caldera Systems, Inc. 1999
Omnibus Stock Incentive Plan is hereby amended to provide that no automatic
annual increase in the number of shares of Common Stock authorized for issuance
under that plan shall occur after November 1, 2002.  Any provision herein to the contrary
notwithstanding, the maximum number of shares of Common Stock that may issued
pursuant to Incentive Stock Options granted hereunder shall not exceed
1,500,000, subject to adjustment under Section 3(c) below.

 

(b)                                 Individual
Limitation.

 

The
total number of shares of Common Stock subject to Incentive Awards (including
Incentive Awards payable in cash but denominated as shares of Common Stock,
i.e., Stand-Alone SARs and Phantom Stock), awarded to any employee during any
tax year of the Company, shall not exceed 400,000 shares.  Determinations under the preceding sentence
shall be made in a manner that is consistent with Section 162(m) of the
Code.

 

(c)                                  Adjustment
for Change in Capitalization.

 

In the
event that the Committee shall determine that any dividend or other
distribution (whether in the form of cash, Common Stock, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Common Stock such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of Participants under the Plan, then the Committee shall make such
equitable changes or adjustments as it deems necessary or appropriate to any or
all of (i) the number and kind of shares of stock that may thereafter be issued
in connection with Incentive Awards, (ii) the number and kind of shares of
stock issued or issuable in respect of outstanding Incentive Awards, and (iii)
the exercise price, grant price, or purchase price relating to any Incentive
Award; provided that, with respect to Incentive Stock Options, such adjustment
shall be made in accordance with Section 424 of the Code.

 

5

 

(d)                                 Re-Use
of Shares.

 

The
following shares of Common Stock shall again become available for Incentive
Awards:  any shares subject to an
Incentive Award that remain unissued upon the cancellation, surrender, exchange
or termination of such award for any reason whatsoever; any shares of
Restricted Stock forfeited; and any shares in respect of which a stock
appreciation right is settled for cash.

 

4.                                       Administration
of the Plan.

 

The
Plan shall be administered by the Committee. 
The Committee shall have the authority in its sole discretion, subject to
and not inconsistent with the express provisions of the Plan, to administer the
Plan and to exercise all the powers and authorities either specifically granted
to it under the Plan or necessary or advisable in the administration of the
Plan, including, without limitation, the authority to grant Incentive Awards;
to determine the persons to whom and the time or times at which Incentive
Awards shall be granted; to determine the type and number of Incentive Awards
to be granted, the number of shares of Stock to which an Award may relate and
the terms, conditions, restrictions and performance criteria relating to any
Incentive Award; to determine whether, to what extent, and under what
circumstances an Incentive Award may be settled, canceled, forfeited, exchanged,
or surrendered; to subject shares of Stock to which an Award may relate to
rights of repurchase or rights of refusal in favor of the Company under the
circumstances and upon the terms set forth in an Award Agreement; to make
adjustments in the performance goals in recognition of unusual or non-recurring
events affecting the Company or the financial statements of the Company (to the
extent in accordance with Section 162(m)of the Code, if applicable), or in
response to changes in applicable laws, regulations, or accounting principles;
to construe and interpret the Plan and any Incentive Award; to prescribe, amend
and rescind rules and regulations relating to the Plan; to determine the terms
and provisions of Award Agreements; and to make all other determinations deemed
necessary or advisable for the administration of the Plan.

 

The
Committee may, in its absolute discretion, without amendment to the Plan, (i)
accelerate the date on which any Tandem SAR or Stand-Alone SAR or Incentive
Award relating to Phantom Stock granted under the Plan becomes exercisable,
waive or amend the operation of Plan provisions respecting exercise after
termination of employment or otherwise adjust any of the terms of such Option
or Stand-Alone SAR, and (ii) accelerate the Exercise Date or Issue Date, or
waive any condition imposed hereunder, with respect to any share of Restricted
Stock or Phantom Stock or otherwise adjust any of the terms applicable to such
share.

 

No
member of the Committee shall be liable for any action, omission or
determination relating to the Plan, and the Company shall indemnify and hold
harmless each member of the Committee and each other director or employee of
the Company to whom any duty or power relating to the administration or
interpretation of the Plan has been delegated against any cost or expense
(including counsel fees) or liability (including any sum paid in settlement of
a claim with the approval of the Committee) arising out of any action, omission
or determination relating to the Plan, if, in either case, such action,
omission or determination was taken or made by such member, director or
employee in good faith and in a manner such member, director or employee
reasonably believed to be in or not opposed to the best interests of the
Company.

 

6

 

5.                                       Eligibility.

 

The
persons who shall be eligible to receive Incentive Awards pursuant to the Plan
shall be all employees and directors of the Company and its Subsidiaries and
such other persons whom the Committee determines are expected to make a
contribution to the Company; provided, however, that no Incentive Awards shall
be granted to any “officers” or “directors” of the Company or its Subsidiaries
(within the meaning of the rules of Nasdaq Stock Market or any other securities
exchange on which Company shares are traded) unless and until the shareholders
of the Company formally approve the Plan at a duly called shareholders meeting.
Subject to the foregoing, the Committee may grant Incentive Awards to any, all
or none of such eligible persons at any time, from time to time, during the
term of the Plan.  Nothing herein shall
require the Company to submit the Plan to Company shareholders for their
approval and any Incentive Awards granted to persons other than Company
“officers” and “directors” shall be effective notwithstanding the absence of
shareholder approval.

 

6.                                       Awards
Under the Plan; Award Agreement.

 

The
Committee may grant Options, Tandem SARs, Stand-Alone SARs, shares of
Restricted Stock, shares of Phantom Stock and Stock Bonuses, in such amounts
and with such terms and conditions as the Committee shall determine, subject to
the provisions of the Plan.

 

Each
Incentive Award granted under the Plan (except an unconditional Stock Bonus)
shall be evidenced by an Award Agreement that shall contain such provisions as
the Committee may in its sole discretion deem necessary or desirable.  By accepting an Incentive Award, a
Participant thereby agrees that the award shall be subject to all of the terms
and provisions of the Plan and the applicable Award Agreement.

 

7.                                       Options.

 

(a)                                  Identification
of Options.

 

Each
Option shall be clearly identified in the applicable Award Agreement as either
an Incentive Stock Option or a Non-Qualified Stock Option.

 

(b)                                 Exercise
Price.

 

Each
Award Agreement with respect to an Option shall set forth the amount (the
“option exercise price”) payable by the grantee to the Company upon exercise of
the Option.  The Option exercise price
per share shall be set by the Committee in its discretion on a case by case
basis, but in the case of an Incentive Stock Option shall not be less than the
Fair Market Value of a share of Common Stock on the date of grant.

 

7

 

(c)                                  Term
and Exercise of Options.

 

(1)                                  Unless
the applicable Award Agreement provides otherwise, an Option shall become
cumulatively exercisable as to 25 percent of the shares covered thereby on each
of the first, second, third and fourth anniversaries of the date of grant.  The Committee shall determine the expiration
date of each Option; provided, however, that no Incentive Stock Option shall be
exercisable more than 10 years after the date of grant.  Unless the applicable Award Agreement provides
otherwise, no Option shall be exercisable prior to the first anniversary of the
date of grant.

 

(2)                                  An
Option shall be exercised by delivering notice to the Company’s principal
office, to the attention of its Secretary, no less than one business day in
advance of the effective date of the proposed exercise.  An Option may also be exercised
electronically by notifying the Company’s agent, pursuant to the methods then
in use by that agent.  Such notice shall
specify the number of shares of Common Stock with respect to which the Option
is being exercised and the effective date of the proposed exercise and shall be
signed by the Participant or other person then having the right to exercise the
Option.  Such notice may be withdrawn at
any time prior to the close of business on the business day immediately
preceding the effective date of the proposed exercise.  Payment for shares of Common Stock purchased
upon the exercise of an Option shall be made on the effective date of such
exercise by one or a combination of the following means: (i) in cash, by
certified check, bank cashier’s check or wire transfer; (ii) by delivering a
properly executed exercise notice to the Company together with a copy of
irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds to pay the full amount of the Purchase Price,
(iii) by delivering shares of Common Stock owned by the Participant for at
lease six months with appropriate stock powers, or (iv) any combination of the
foregoing forms.  In determining the
number of shares of Common Stock necessary to be delivered to or retained by
the Company, such shares shall be valued at their Fair Market Value as of the
exercise date.

 

(3)                                  Certificates
for shares of Common Stock purchased upon the exercise of an Option shall be
issued in the name of the Participant or other person entitled to receive such
shares, and delivered to the Participant or such other person as soon as
practicable following the effective date on which the Option is exercised.  In the event of an exercise by way of
electronic means, no actual Certificates need be issued.

 

(d)                                 Limitations
on Incentive Stock Options.

 

(1)                                  To
the extent that the aggregate Fair Market Value of shares of Common Stock with
respect to which Incentive Stock Options are exercisable for the first time by
a Participant during any calendar year under the Plan and any other stock
option plan of the Company (or any Subsidiary of the Company) shall exceed
$100,000, or such higher value as may be permitted under Section 422 of
the Code, such Options shall be treated as Non-Qualified Stock Options.  Such Fair Market Value shall be determined
as of the date on which each such Incentive Stock Option is granted.

 

8

 

(2)                                  No
Incentive Stock Option may be granted to an individual if, at the time of the
grant, such individual owns stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company unless (i) the
exercise price per share of such Incentive Stock Option is at least 110 percent
of the Fair Market Value of a share of Common Stock at the time such Incentive
Stock Option is granted and (ii) such Incentive Stock Option is not exercisable
after the expiration of five years from the date such Incentive Stock Option is
granted.

 

(e)                                  Effect
of Termination of Employment.

 

(1)                                  Unless
the applicable Award Agreement provides otherwise, in the event that the
employment of a Participant with the Company or a Subsidiary of the Company
shall terminate for any reason other than death, Disability or Cause, (i)
Options granted to such Participant, to the extent that they are exercisable at
the time of such termination, shall remain exercisable until the date that is
ninety (90) days (or 120 days in the case of a “Non-Qualified Stock Option”)
after such termination, on which date they shall expire, and (ii) Options
granted to such Participant, to the extent that they were not exercisable at
the time of such termination, shall expire at the close of business on the date
of such termination.  Notwithstanding
the foregoing, no Option shall be exercisable after the expiration of its term.

 

(2)                                  Unless
the applicable Award Agreement provides otherwise, in the event that the
employment of a Participant with the Company or a Subsidiary of the Company
shall terminate on account of the Disability or death of the Participant (i)
Options granted to such Participant, to the extent that they were exercisable
at the time of such termination, shall remain exercisable until the first
anniversary of such termination, on which date they shall expire, and (ii)
Options granted to such Participant, to the extent that they were not
exercisable at the time of such termination, shall expire at the close of
business on the date of such termination. 
Notwithstanding the foregoing, no Option shall be exercisable after the
expiration of its term.

 

(3)                                  Unless
an applicable Award Agreement issued after the date hereof provides otherwise,
if a Participant’s employment with the Company or a Subsidiary of the Company
is terminated for Cause, Options granted to the Participant, to the extent they
are then exercisable, shall remain exercisable for 30 days following the date
of termination of employment, on which date they shall expire.  Notwithstanding the foregoing, no Option
shall be exercisable after expiration of its term.

 

(f)                                    Effect
of Change in Control.

 

Upon the occurrence of a
Change in Control, (i) Options granted to a Participant, to the extent that
they were exercisable at the time of a Change in Control, shall remain
exercisable until their expiration notwithstanding the provisions of
Section 7(e)(1) and (2) of the Plan, and (ii) Options granted to such
Participant, to the extent they were not exercisable at the time of a Change in
Control, shall expire at the close of business on the date of such Change in
Control.  Notwithstanding the foregoing,
no Option shall be exercisable after the expiration of its term.

 

9

 

Any vested, exercisable
Options outstanding at the time of a Change in Control shall be cashed out,
converted to options of the acquiring entity, assumed by the acquiring entity
or otherwise disposed of in the manner provided in any shareholder-approved
agreement or plan governing or providing for such Change in Control (“Change in
Control Agreement”); provided that any such cash-out, conversion, assumption or
disposition of the Options shall not deprive the Option holder of the inherent
value of his Options, measured solely by the excess of the Fair Market Value of
the underlying Option shares immediately prior to the Change in Control over
the Option exercise price, without the holder’s consent.  In the absence of such governing provisions
in a Change in Control Agreement, the Committee in its sole discretion may on a
case by case basis require any vested, exercisable Options that remain
outstanding upon a Change in Control to be cashed out and terminated in
exchange for a lump sum cash payment, shares of the acquiring entity or a
combination thereof equal in value to the fair market value of the Option,
measured in the manner described above, immediately prior to the Change in
Control. Any non-vested Options shall terminate upon a Change in Control
unless: (i) otherwise provided in the Change in Control Agreement or in a
written agreement , such as a severance agreement, between the Company and the
Participant; or (ii) the Committee in its sole discretion on a case by case
basis elects in writing to waive termination

 

8.                                       Tandem
SARs.

 

The Committee may grant in
connection with any Option granted hereunder one or more Tandem SARs relating
to a number of shares of Common Stock less than or equal to the number of
shares of Common Stock subject to the related Option.  A Tandem SAR may be granted at the same time as, or, in the case
of a Non-Qualified Stock Option, subsequent to the time that, its related
Option is granted.

 

(a)                                  Benefit
Upon Exercise.

 

The
exercise of a Tandem SAR with respect to any number of shares of Common Stock
shall entitle the Participant to a cash payment, for each such share, equal to
the excess of (i) the Fair Market Value of a share of Common Stock on the
exercise date over (ii) the option exercise price per share of the related
Option.  Such payment shall be made as
soon as practicable after the effective date of such exercise.

 

(b)                                 Term
and Exercise of Tandem SAR.

 

(1)                                  A
Tandem SAR shall be exercisable only if and to the extent that its related
Option is exercisable.

 

(2)                                  The
exercise of a Tandem SAR with respect to a number of shares of Common Stock
shall cause the immediate and automatic cancellation of its related Option with
respect to an equal number of shares. 
The exercise of an Option, or the cancellation, termination or expiration
of an Option (other than pursuant to this Section 8(b)(2)), with respect
to a number of shares of Common Stock shall cause the automatic and immediate
cancellation of any related

 

10

 

Tandem
SARs to the extent that the number of shares of Common Stock remaining subject
to such Option is less than the number of shares then subject to such Tandem
SAR.  Such Tandem SARs shall be canceled
in the order in which they become exercisable.

 

(3)                                  No
Tandem SAR shall be assignable or transferable otherwise than together with its
related Option, and any such transfer or assignment will be subject to the
provisions of Section 20 of the Plan.

 

(4)                                  A
Tandem SAR shall be exercisable by delivering notice to the Company’s principal
office, to the attention of its Secretary, no less than one business day in
advance of the effective date of the proposed exercise.  A Tandem SAR may also be exercised
electronically by notifying the Company’s agent, pursuant to the methods then
in use by that agent.  Such notice shall
specify the number of shares of Common Stock with respect to which the Tandem
SAR is being exercised and the effective date of the proposed exercise and
shall be signed by the Participant or other person then having the right to
exercise the Option to which the Tandem SAR is related.  Such notice may be withdrawn at any time
prior to the close of business on the business day immediately preceding the
effective date of the proposed exercise.

 

9.                                       Stand-Alone
SARs.

 

(a)                                  Benefit
Upon Exercise.

 

The
exercise of a Stand-Alone SAR with respect to any number of shares of Common
Stock shall entitle the Participant to a cash payment, for each such share,
equal to the excess of (i) the Fair Market Value of a share of Common Stock on
the exercise date over (ii) the Reference Value of the Stand-Alone SAR.  Such payments shall be made as soon as
practicable after the effective date of such exercise.

 

(b)                                 Term
and Exercise of Stand-Alone SARs.

 

(1)                                  Unless
the applicable Award Agreement provides otherwise, a Stand-Alone SAR shall
become cumulatively exercisable as to 25 percent of the shares covered thereby
on each of the first, second, third and fourth anniversaries of the date of
grant.  The Committee shall determine
the expiration date of each Stand-Alone SAR. 
Unless the applicable Award Agreement provides otherwise, no Stand-Alone
SAR shall be exercisable prior to the first anniversary of the date of grant.

 

(2)                                  A
Stand-Alone SAR shall be exercised by delivering notice to the Company’s
principal office, to the attention of its Secretary, no less than one business
day in advance of the effective date of the proposed exercise.  A Stand-Alone SAR may also be exercised
electronically by notifying the Company’s agent, pursuant to the methods then
in use by that agent.  Such notice shall
specify the number of shares of Common Stock with respect to which the
Stand-Alone SAR is being exercised, and the effective date of the proposed
exercise, and shall be signed by the Participant.  The Participant may withdraw such notice at any time prior to the
close of business on the business day immediately preceding the effective date
of the proposed exercise.

 

11

 

(c)                                  Effect
of Termination of Employment.

 

The
provisions set forth in Section 7(e) with respect to the exercise of
Options following termination of employment shall apply as well to the exercise
of Stand-Alone SARs.

 

(d)                                 Effect
of Change in Control.

 

Upon the occurrence of a
Change in Control, (i) Stand-Alone SARs granted under the Plan, to the extent
exercisable at the time of a Change of Control, shall remain exercisable until
their expiration notwithstanding the provisions of Section 7(e) of the
Plan that are incorporated into this Section 9, and (ii) Stand-Alone SARs
not exercisable at the time of a Change in Control shall expire at the close of
business on the date of such Change in Control.  Any vested, exercisable Non-Tandem SARs shall, upon a Change in
Control, be cashed out, converted, assumed or otherwise disposed of in the same
manner as applies to Options under Section 7(f).

 

10.                                 Restricted
Stock.

 

(a)                                  Issue
Date and Vesting Date.

 

At the
time of the grant of shares of Restricted Stock, the Committee shall establish
an Issue Date or Issue Dates and a Vesting Date or Vesting Dates with respect
to such shares.  The Committee may
divide such shares into classes and assign a different Issue Date and/or
Vesting Date for each class.  If the
grantee is employed by the Company or a Subsidiary of the Company on an Issue
Date (which may be the date of grant), the specified number of shares of
Restricted Stock shall be issued in accordance with the provisions of
Section 10(e) of the Plan. 
Provided that all conditions to the vesting of a share of Restricted
Stock imposed pursuant to Section 10(b) of the plan are satisfied, and
except as provided in Section 10(g) of the Plan, upon the occurrence of
the Vesting Date with respect to a share of Restricted Stock, such share shall
vest and the restrictions of Section 10(c) of the Plan shall lapse.

 

(b)                                 Conditions
to Vesting.

 

At the
time of the grant of shares of Restricted Stock, the Committee may impose such
restrictions or conditions to the vesting of such shares as it, in its absolute
discretion, deems appropriate.

 

(c)                                  Restrictions
on Transfer Prior to Vesting.

 

Prior
to the vesting of a share of Restricted Stock, no transfer of a Participant’s
rights with respect to such share, whether voluntary or involuntary, by
operation of law or otherwise, shall be permitted.  Immediately upon any attempt to transfer such rights, such share,
and all of the rights related thereto, shall be forfeited by the Participant.

 

12

 

(d)                                 Dividends
on Restricted Stock.

 

The
Committee in its discretion may require that any dividends paid on shares of
Restricted Stock shall be held in escrow until all restrictions on such shares
have lapsed.

 

(e)                                  Issuance
of Certificates.

 

(1)                                  Reasonably
promptly after the Issue Date with respect to shares of Restricted Stock, the
Company shall cause to be issued a stock certificate, registered in the name of
the Participant to whom such shares were granted, evidencing such shares;
provided, that the Company shall not cause such a stock certificate to be
issued unless it has received a stock power duly endorsed in blank with respect
to such shares.  Each such stock
certificate shall bear the following legend: The transferability of this
certificate and the shares of stock represented hereby are subject to the
restrictions, terms and conditions (including forfeiture provisions and
restrictions against transfer) contained in the 2002 Omnibus Stock Incentive
Plan of Caldera International, Inc. and an Award Agreement entered into between
the registered owner of such shares and Caldera Systems, Inc.  A copy of such Plan and Award Agreement is
on file in the office of the Secretary of Caldera International, Inc., 320
South 520 West, Suite 100, Lindon,  Utah
84042.  Such legend shall not be removed
until such shares vest pursuant to the terms of the applicable Award Agreement.

 

(2)                                  Each
certificate issued pursuant to this Section 10(e), together with the stock
powers relating to the shares of Restricted Stock evidenced by such
certificate, shall be held by the Company unless the Committee determines otherwise.

 

(f)                                    Consequences
of Vesting.

 

Upon
the vesting of a share of Restricted Stock pursuant to the terms of the
applicable Award Agreement, the restrictions of Section 10(c) of the Plan
shall lapse, except as otherwise provided in the Award Agreement.  Reasonably promptly after a share of
Restricted Stock vests, the Company shall cause to be delivered to the
Participant to whom such shares were granted, a certificate evidencing such
share, free of the legend set forth in Section 10(e) of the Plan.

 

13

 

(g)                                 Effect
of Termination of Employment.

 

(1)                                  Subject
to such other provision as the Committee may set forth in the applicable Award
Agreement, and to the Committee’s amendment authority pursuant to Section 4
of the Plan, upon the termination of a Participant’s employment by the Company
or any Subsidiary of the Company for any reason other than Cause, any and all
shares to which restrictions on transferability apply shall be immediately
forfeited by the Participant and transferred to the Company, provided that if
the Committee, in its sole discretion and within thirty (30) days after such
termination of employment notifies the Participant in writing of its decision
not to terminate the Participant’s rights in such shares, then the Participant
shall continue to be the owner of such shares subject to such continuing
restrictions as the Committee may prescribe in such notice.  If shares of Restricted Stock are forfeited
in accordance with the provision of this Section 10, the Company shall
also have the right to require the return of all dividends paid on such shares,
whether by termination of any escrow arrangement under which such dividends are
held or otherwise.

 

(2)                                  In
the event of the termination of a Participant’s employment for Cause, all
shares of Restricted Stock granted to such Participant that have not vested as
of the date of such termination shall immediately be returned to the Company,
together with any dividends paid on such shares.

 

(h)                                 Effect
of Change in Control.

 

Upon
the occurrence of a Change in Control, all restrictions on outstanding vested
shares shall immediately lapse and all outstanding shares of Restricted Stock
that have not theretofore vested shall immediately expire and be cancelled.

 

(i)                                     Special
Provisions Regarding Restricted Stock Awards.

 

The Committee may
designate on a case-by-case basis whether Restricted Stock Awards are intended
to be “performance based compensation” within the meaning of Code
Section 162(m).  The grant of Restricted
Stock so designated shall be based on the attainment by the Company (or a
Subsidiary or division of the Company if applicable) of performance goals
pre-established by the Committee, based on one or more of the following
criteria:  (i) the attainment of a
specified percentage return on total stockholder equity of the Company; (ii)
the attainment of a specified percentage increase in earnings per share of
Common Stock; (iii) the attainment of a specified percentage increase in net
income of the Company; and (iv) the attainment of a specified percentage
increase in profit before taxation of the Company (or a Subsidiary or division
of the Company if applicable). 
Attainment of any such performance criteria shall be determined in
accordance with generally accepted accounting principles as in effect from time
to time.  Such shares shall be released
from restrictions only after the attainment of such performance measures have
been certified by the Committee.

 

14

 

11.                                 Phantom
Stock.

 

(a)                                  Vesting
Date.

 

At the
time of the grant of shares of Phantom Stock, the Committee shall establish a
Vesting Date or Vesting Dates with respect to such shares.  The Committee may divide such shares into
classes and assign a different Vesting Date for each class.  Provided that all conditions to the vesting
of a share of Phantom Stock imposed pursuant to Section 11(c) of the Plan
are satisfied, and except as provided in Section 11(d) of the Plan, upon
the occurrence of the Vesting Date with respect to a share of Phantom Stock,
such share shall vest.

 

(b)                                 Benefit
Upon Vesting.

 

Upon
the vesting of a share of Phantom Stock, the Participant shall be entitled to
receive in cash, within 30 days of the date on which such share vests, an amount
equal to the sum of (i) the Fair Market Value of a share of Common Stock on the
date on which such share of Phantom Stock vests and (ii) the aggregate amount
of cash dividends paid with respect to a share of Common Stock during the
period commencing on the date on which the share of Phantom Stock was granted
and terminating on the date on which such share vests.

 

(c)                                  Conditions
to Vesting.

 

At the
time of the grant of shares of Phantom Stock, the Committee may impose such
restrictions or conditions to the vesting of such shares as it, in its absolute
discretion, deems appropriate.

 

(d)                                 Effect
of Termination of Employment.

 

(1)                                  Subject
to such other provisions as the Committee may set forth in the applicable Award
Agreement, and to the Committee’s amendment authority pursuant to
Section 4 of the Plan, shares of Phantom Stock that have not vested,
together with any dividends credited on such shares, shall be forfeited upon
the Participant’s termination of employment for any reason other than Cause.

 

(2)                                  In
the event of the termination of a Participant’s employment for Cause, all
shares of Phantom Stock granted to such Participant that have not vested as of
the date of such termination shall immediately be forfeited, together with any
dividends credited on such shares.

 

(e)                                  Effect
of Change in Control.

 

Upon
the occurrence of a Change in Control, all outstanding shares of Phantom Stock
that have not theretofore vested shall immediately expire and be cancelled.

 

15

 

(f)                                    Special
Provisions Regarding Phantom Stock Awards.

 

The
Committee may designate on a case by case basis whether Phantom Stock Awards
are intended to be “performance based compensation” within the meaning of Code
Section162 (m).  The grant of Phantom
Stock so designated shall be based on the attainment by the Company (or a
Subsidiary or division of the Company if applicable) of performance goals
pre-established by the Committee, based on one or more of the following
criteria:  (i) the attainment of a
specified percentage return on total stockholder equity of the Company; (ii)
the attainment of a specified percentage increase in earnings per share of
Common Stock; (iii) the attainment of a specified percentage increase in net
income of the Company; and (iv) the attainment of a specified percentage
increase in profit before taxation of the Company (or a Subsidiary or division
of the Company if applicable). 
Attainment of any such performance criteria shall be determined in
accordance with generally accepted accounting principles as in effect from time
to time.  Such shares shall be released
from restrictions only after the attainment of such performance measures have
been certified by the Committee.

 

12.                                 Stock
Bonuses.

 

In the event that the
Committee grants a Stock Bonus, a certificate for the shares of Common Stock
comprising such Stock Bonus shall be issued in the name of the Participant to
whom such grant was made and delivered to such Participant as soon as
practicable after the date on which such Stock Bonus is payable.

 

13.                                 Rights
as a Stockholder.

 

No
person shall have any rights as a stockholder with respect to any shares of
Common Stock covered by or relating to any Incentive Award until the date of
issuance of a stock certificate with respect to such shares.  Except as otherwise expressly provided in
Section 3(c) of the Plan, no adjustment to any Incentive Award shall be
made for dividends or other rights for which the record date occurs prior to
the date such stock certificate is issued.

 

14.                                 No
Special Employment Rights; No Right to Incentive Award.

 

Nothing contained in the
Plan or any Award Agreement shall confer upon any Participant any right with
respect to the continuation of employment by the Company or any Subsidiary of
the Company or interfere in any way with the right of the Company or any
Subsidiary of the Company, subject to the terms of any separate employment
agreement to the contrary, at any time to terminate such employment or to
increase or decrease the compensation of the Participant.  No person shall have any claim or right to
receive an Incentive Award hereunder. 
The Committee’s granting of an Incentive Award to a Participant at any
time shall neither require the Committee to grant any other Incentive Award to
such Participant or other person at any time or preclude the Committee from
making subsequent grants to such Participant or any other person.

 

16

 

15.                                 Securities
Matters.

 

(a)                                  The
Company shall be under no obligation to effect the registration pursuant to the
Securities Act of any interests in the Plan or any shares of Common Stock to be
issued hereunder or to effect similar compliance under any state laws.  Notwithstanding anything herein to the
contrary, the Company shall not be obligated to cause to be issued or delivered
any certificates evidencing shares of Common Stock pursuant to the Plan unless
and until the Company is advised by its counsel that the issuance and delivery
of such certificates is in compliance with all applicable laws, regulations of
governmental authority and the requirements of any securities exchange on which
shares of Common Stock are traded.  The
Committee may require, as a condition of the issuance and delivery of
certificates evidencing shares of Common Stock pursuant to the terms hereof and
of the applicable Award Agreement, that the recipient of such shares make such
covenants, agreements and representations, and that such certificates bear such
legends, as the Committee, in its sole discretion, deems necessary or
desirable.

 

(b)                                 The
transfer of any shares of Common Stock hereunder shall be effective only at
such time as counsel to the Company shall have determined that the issuance and
delivery of such shares is in compliance with all applicable laws, regulations
of governmental authority and the requirements of any securities exchange on
which shares of Common Stock are traded. The Committee may, in its sole
discretion, defer the effectiveness of any transfer of shares of Common Stock
hereunder in order to allow the issuance of such shares to be made pursuant to
registration or an exemption from registration or other methods for compliance
available under federal or state securities laws.  The Committee shall inform the Participant in writing of its
decision to defer the effectiveness of a transfer.  During the period of such deferral in connection with the
exercise of an Option, the Participant may, by written notice, withdraw such
exercise and obtain the refund of any amount paid with respect thereto.

 

16.                                 Withholding
Taxes.

 

Whenever cash is to be paid
pursuant to an Incentive Award, the Company (or its agent) shall have the right
to deduct there from an amount sufficient to satisfy any federal, state and
local withholding tax requirements related thereto.  Whenever shares of Common Stock are to be delivered pursuant to
an Incentive Award, the Company (or its agent) shall have the right to require
the Participant to remit to the Company in cash an amount sufficient to satisfy
any federal, state and local withholding tax requirements related thereto.  With the approval of the Committee, a
Participant may satisfy the foregoing requirement by electing to have the
Company (or its agent) withhold from delivery shares of Common Stock having a
fair market value equal to the amount of tax to be withheld.  Such shares shall be valued at their Fair
Market Value on the date on which the amount of tax to be withheld is
determined (the “Tax Date”).  Fractional
share amounts shall be settled in cash. 
Such a withholding election may be made with respect to all or any
portion of the shares to be delivered pursuant to an Incentive Award.

 

17.                                 Notification
of Election Under Section 83(b) of the Code.

 

If any
Participant shall, in connection with the acquisition of shares of Common Stock
under the Plan, make the election permitted under Section 83(b) of the
Code (i.e., an election to

 

17

 

include in gross income
in the year of transfer the amounts specified in Section 83(b)), such
Participant shall notify the Company of such election within 10 days of filing
notice of the election with the Internal Revenue Service, in addition to any
filing and a notification required pursuant to regulation issued under the
authority of Code Section 83(b).

 

18.                                 Notification
Upon Disqualifying Disposition Under Section 421(b) of the Code.

 

Each
Award Agreement with respect to an Incentive Stock Option shall require the
Participant to notify the Company of any disposition of shares of Common Stock
issued pursuant to the exercise of such Option under the circumstances
described in Section 421(b) of the Code (relating to certain disqualifying
dispositions), within 10 days of such disposition.

 

19.                                 Amendment
or Termination of the Plan.

 

The Board of Directors may,
at any time, suspend or terminate the Plan or revise or amend it in any respect
whatsoever; provided, however, that stockholder approval shall be required if
and to the extent the Board of Directors determines that such approval is appropriate
for purposes of satisfying Section 162(m) or 422 of the Code or to the
extent such approval is required by the rules of any stock exchange on which
the Common Stock is listed.  Nothing
herein shall restrict the Committee’s ability to exercise its discretionary
authority pursuant to Section 4 of the Plan, which discretion may be
exercised without amendment to the Plan. 
No action hereunder may, without the consent of a Participant, reduce
the Participant’s rights under any outstanding Incentive Award.

 

20.                                 Transfers
Upon Death; Non-Assignability.

 

Upon
the death of a Participant, outstanding Incentive Awards granted to such
Participant may be exercised only by the executor or administrator of the
Participant’s estate or by a person who shall have acquired the right to such
exercise by will or by the laws of descent and distribution.  No transfer of an Incentive Award by will or
the laws of descent and distribution shall be effective to bind the Company
unless the Committee shall have been furnished with (a) written notice thereof
and with a copy of the will and/or such evidence as the Committee may deem
necessary to establish the validity of the transfer and (b) an agreement by the
transferee to comply with all the terms and conditions of the Incentive Award
that are or would have been applicable to the Participant and to be bound by
the acknowledgments made by the Participant in connection with the grant of the
Incentive Award.

 

During
a Participant’s lifetime, the Committee may permit the transfer, assignment or
other encumbrance of an outstanding Option or outstanding shares of Restricted
Stock unless such Option is an Incentive Stock Option and the Committee and the
Participant intend that it shall retain such status. Notwithstanding the
foregoing, subject to any conditions as the Committee may prescribe, a
Participant may, upon providing written notice to the Secretary of the Company,
elect to transfer any or all Options granted to such Participant pursuant to
the Plan to members of his or her immediate family, including, but not limited
to, children, grandchildren and spouse or to trusts for the benefit of such
immediate family members or to partnerships in which such family members are
the only partners; provided, however, that no such transfer by any Participant
may be made in exchange for consideration.

 

21.                                 Expenses
and Receipts.

 

The expenses of the Plan
shall be paid by the Company.  Any
proceeds received by the Company in connection with any Incentive Award will be
used for general corporate purposes.

 

18

 

22.                                 Failure
to Comply.

 

In addition to the remedies
of the Company elsewhere provided for herein, failure by a Participant (or
beneficiary or transferee) to comply with any of the terms and conditions of
the Plan or the applicable Award Agreement, unless such failure is remedied by
such Participant (or beneficiary or transferee) within ten days after notice of
such failure by the Committee, shall be grounds for the cancellation and
forfeiture of such Incentive Award, in whole or in part, as the Committee, in
its absolute discretion, may determine.

 

23.                                 Effective
Date and Term of Plan.

 

The Plan became effective on
the Effective Date, but the Plan (and any grants of Incentive Awards made prior
to stockholder approval of the Plan) shall be subject to the requisite approval
of the stockholders of the Company.  In
the absence of such approval, such Incentive Awards shall be null and void.  Unless earlier terminated by the Board of
Directors, the right to grant Incentive Awards under the Plan will terminate on
the tenth anniversary of the Effective Date. 
Incentive Awards outstanding at Plan termination will remain in effect
according to their terms and the provisions of the Plan.

 

24.                                 Applicable
Law.

 

Except
to the extent preempted by any applicable federal law, the Plan will be
construed and administered in accordance with the laws of the State of Utah,
without reference to the principles of conflicts of law.

 

25.                                 Participant
Rights.

 

No
Participant shall have any claim to be granted any Incentive Award under the
Plan, and there is no obligation for uniformity of treatment for
Participants.  Except as provided
specifically herein, a Participant or a transferee of an Incentive Award shall
have no rights as a stockholder with respect to any shares covered by any award
until the date of the issuance of a Common Stock certificate to him for such
shares.

 

26.                                 Unfunded Status of Awards.

 

The Plan is intended to
constitute an “unfunded” plan for incentive and deferred compensation.  With respect to any payments not yet made to
a Participant pursuant to an Incentive Award, nothing contained in the Plan or
any Award Agreement shall give any such Participant any rights that are greater
than those of a general creditor of the Company.

 

27.                                 No
Fractional Shares.

 

No
fractional shares of Common Stock shall be issued or delivered pursuant to the
Plan.  The Committee shall determine
whether cash, other Incentive Awards, or other property shall be issued or paid
in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.

 

19

 

28.                                 Beneficiary.

 

A Participant may file with
the Committee a written designation of a beneficiary on such form as may be
prescribed by the Committee and may, from time to time, amend or revoke such
designation.  If no designated
beneficiary survives the Participant, the executor or administrator of the
Participant’s estate shall be deemed to be the Participant’s beneficiary.

 

29.                                 Interpretation.

 

The Plan is designed and
intended to comply with Rule 16b-3 promulgated under the Exchange Act and, with
Section 162(m) of the Code, and all provisions hereof shall be construed
in a manner to so comply.

 

20

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