Document:

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                                                                   EXHIBIT 10.3
                              CALDERA SYSTEMS, INC.

                             1998 STOCK OPTION PLAN

                                    ARTICLE I

                               GENERAL PROVISIONS

      I.    PURPOSE OF THE PLAN

      This 1998 Stock Option Plan is intended to promote the interests of
CALDERA SYSTEMS, INC., a Utah corporation, by providing eligible persons with
the opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Corporation as an incentive for them to remain in
the service of the Corporation.

      Capitalized terms herein shall have the meanings assigned to such terms in
the attached Appendix.

      II.   ADMINISTRATION OF THE PLAN

            A.    The Plan shall be administered by the Board. However, any or
all administrative functions otherwise exercisable by the Board may be delegated
to the Committee. Members of the Committee shall serve for such period of time
as the Board may determine and shall be subject to removal by the Board at any
time. The Board may also at any time terminate the functions of the Committee
and reassume all powers and authority previously delegated to the Committee.

            B.    The Plan Administrator shall have full power and authority
(subject to the provisions of the Plan) to establish such rules and regulations
as it may deem appropriate for proper administration of the Plan and to make
such determinations under, and issue such interpretations of, the Plan and any
outstanding options thereunder as it may deem necessary or advisable. Decisions
of the Plan Administrator shall be final and binding on all parties who have an
interest in the Plan or any option thereunder.

      III.  ELIGIBILITY

            A.    The persons eligible to participate in the Plan are as
follows:

                  (i)   Employees,

                  (ii)  non-employee members of the Board or the non-employee
      members of the board of directors of any Parent or Subsidiary, and

                  (iii) consultants who provide services to the Corporation (or
      any Parent or Subsidiary).

            B.    The Plan Administrator shall have full authority to determine
which eligible persons are to receive option grants, the time or times when such
option grants are to be made, the number of shares to be covered by each such
grant the exercise price of option, the time or times at which each option is to
become exercisable, the vesting schedule applicable to the option shares and the
maximum term for which the option is to remain.

      IV.   STOCK SUBJECT TO THE PLAN

            A.    The stock issuable under the Plan shall be shares of
authorized but unissued or re-acquired Common Stock. The maximum number of
shares of Common Stock which may be issued over the term of the Plan shall not
exceed 1,000,000 shares.

            B.    Shares of Common Stock subject to outstanding options shall be
available for subsequent issuance under the Plan to the extent (i) the options
expire or terminate for any reason prior to exercise in full or (ii) the

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options are canceled in accordance with the cancellation-regrant provisions of
Article 2. All shares issued under the Plan, whether or not those shares are
subsequently repurchased by the Corporation pursuant to its repurchase rights
under the Plan, shall reduce on a share-for-share basis the number of shares of
Common Stock available for subsequent issuance under the Plan.

            C.    Should any change be made to the Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration, appropriate adjustments
shall be made to (i) the maximum number and/or class of securities issuable
under the Plan and (ii) the number and/or class of securities and the exercise
price per share in effect under each outstanding option in order to prevent the
dilution or enlargement of benefits thereunder. The adjustments determined by
the Plan Administrator shall be final, binding and conclusive.

                                    ARTICLE 2

                                  OPTION GRANTS

      I.    OPTION TERMS

            Each option shall be a Non-Statutory Option and shall be evidenced
by one or more documents in the form approved by the Plan Administrator;
provided, however, that each such document shall comply with the terms specified
below

            A.    Exercise Price.

                  (i)   The exercise price per share shall be fixed by the Plan
      Administrator which may be less than the Fair Market Value per share of
      Common Stock on the option grant date.

                  (ii)  The exercise price shall become immediately due upon
      exercise of the option and shall, subject to the documents evidencing the
      option, be payable in cash or check made payable to the Corporation.

            B.    Exercise and Term of Options. Each option shall be exercisable
at such time or times, during such period and for such number of shares as shall
be determined by the Plan Administrator and set forth in the documents
evidencing the option. However, no option shall have a term in excess of ten
(10) years measured from the option grant date.

            C.    Effect of Termination of Service. The following provisions
shall govern the exercise of any options held by the Optionee at the time of
cessation of Service or death:

                  (i)   Should the Optionee cease to remain in Service for any
      reason other than Cause, Disability or death, then the Optionee shall have
      a period of three (3) months following the later of (i) the date of such
      cessation of Service, or (ii) the date the Options first become
      exercisable, during which to exercise each outstanding option held by such
      Optionee.

                  (ii)  Should the Optionee cease to remain in Service for
      Cause, then all outstanding Options shall terminate on the date of such
      cessation of Service.

                  (iii) Should such Service terminate by reason of Disability,
      then the Optionee shall have a period of twelve (12) months following the
      later of (i) the date of such cessation of Service, or (ii) the date the
      Options first become exercisable, during which to exercise each
      outstanding option held by such Optionee.

                  (iv)  Should the Optionee die while holding one or more
      outstanding options, then the personal representative of the Optionee's
      estate or the person or persons to whom the option is transferred pursuant
      to the Optionee's will or in accordance with the laws of descent and
      distribution shall have a period of twelve (12) months following the later
      of (i) date of the Optionee's death, or (ii) the date the Options first
      become exercisable, during which to exercise each outstanding option held
      by such Optionee.

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                  (v)   Under no circumstances, however, shall any such option
      be exercisable after the specified expiration of the option term or
      earlier termination of the option.

                  (vi)  During the applicable post-Service exercise period, the
      option may not be exercised in the aggregate for more than the number of
      vested shares for which the option is exercisable an the date of the
      Optionee's cessation of Service. The option shall terminate and cease to
      be outstanding for any vested shares for which the option has not been
      exercised upon the earlier of the following: (i) expiration of the
      applicable post-Service exercise period, (ii) upon the termination of the
      option as a result of a Corporate Transaction, or (iii) upon the
      expiration of the option term. The option shall, immediately upon the
      Optionee's cessation of Service, terminate and cease to be outstanding to
      the extent the option has not vested on the date of such cessation of
      Service.

            D.    Shareholder Rights. The holder of an option shall have no
shareholder rights with respect to the shares subject to the option until such
person shall have exercised the option, paid the exercise price and become a
holder of record of the purchased shares.

            E.    Unvested Shares. The Plan Administrator shall have the
discretion to grant options which are exercisable for unvested shares of Common
Stock. Should the Optionee cease Service while holding such unvested shares, the
Corporation shall have the right to repurchase, at the exercise price paid per
share, all or (at the discretion of the Corporation and with the consent of the
Optionee) any of those unvested shares. The terms upon which such repurchase
right shall be exercisable (including the period and procedure for exercise and
the appropriate vesting schedule for the purchased shares) shall be established
by the Plan Administrator and set forth in the document evidencing such
repurchase right. The Plan Administrator may impose a vesting schedule upon any
option grant or any shares of Common Stock subject to the option.

            F.    First Refusal Rights. Until such time as the Common Stock is
FIRST registered under Section 12(g) of the 1934 Act, the Corporation shall have
the right of first refusal with respect to any proposed disposition by the
Optionee (or any successor in interest) of any shares of Common Stock issued
under the Plan. Such right of first refusal shall be exercisable in accordance
with the terms established by the Plan Administrator and set forth in the
document evidencing such right.

            G.    Limited Transferability of Option. During the lifetime of the
Optionee, the option shall be exercisable only by the Optionee and shall not be
assignable or transferable other than by will, by the laws of descent and
distribution following the Optionee's death, or be assigned in accordance with
the terms of a Qualified Domestic Relations Order. The assigned option may only
be exercised by the person or persons who acquire a proprietary interest in the
option pursuant to such Qualified Domestic Relations Order. The terms applicable
to the assigned option (or portion thereof) shall be the same as those in effect
for the option immediately prior to such assignment and shall be set forth in
such documents issued to the assignee as the Plan Administrator may deem
appropriate.

      II.   CORPORATE TRANSACTION

            A.    In the event of any Corporate Transaction, each outstanding
option shall terminate and cease to be outstanding, except to the extent such
option is assumed by the successor corporation (or parent thereof) in connection
with such Corporate Transaction. In addition, all outstanding repurchase rights
shall terminate automatically in the event of any Corporate Transaction, except
to the extent the repurchase rights are assigned to the successor corporation
(or parent thereof) in connection with such Corporate Transaction.

            B.    Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in the consummation of such Corporate Transaction,
had the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to (i) the number and class of
securities available for issuance under the Plan following the consummation of
such Corporate Transaction and (ii) the exercise price payable per share under
each outstanding option, provided the aggregate exercise price payable for such
securities shall remain the same.

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            C.    The grant of options under the Plan shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.

      III.  CANCELLATION AND REGRANT OF OPTIONS

      The Plan Administrator shall have the authority to effect, at any time and
from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution therefor new options covering the same or different number of
shares of Common Stock but with an exercise price per share based on the Fair
Market Value per share of Common Stock on the new option grant date.

      IV.   ADDITIONAL AUTHORITY

      The Plan Administrator shall have the discretion, exercisable either at
the time an option is granted or at any time while the option remains
outstanding, to:

                  (i)   extend the period of time for which the option is to
      remain exercisable following the Optionee's cessation of Service or death
      from the limited period otherwise in effect for that option to such
      greater period of time as the Plan Administrator shall deem appropriate,
      but in no event beyond the expiration of the option term;

                  (ii)  permit the option to be exercised, during the applicable
      post-Service exercise period, not only with respect to the number of
      vested shares of Common Stock for which such option is exercisable at the
      time of the Optionee's cessation of Service or death but also with respect
      to one or more additional installments in which the Optionee would have
      vested under the option had the Optionee continued in Service; and/or

                  (iii) accelerate or waive the Vesting Schedule and/or the date
      the option first becomes exercisable.

                                    ARTICLE 3

                                  MISCELLANEOUS

      I.    EFFECTIVE DATE AND TERM OF THE PLAN

            A.    The Plan shall become effective when adopted by the Board. The
Plan Administrator may grant options and issue shares under the Plan at any time
after the effective date of the Plan and before the date fixed herein for
termination of  the Plan.

            B.    The Plan shall terminate upon the earliest of (i) the
expiration of the ten (10)-year period measured from the date the Plan is
adopted by the Board, (ii) the date on which all shares available for issuance
under the Plan shall have been issued pursuant to the exercise of options or the
issuance of shares (whether vested or unvested) under the Plan or (iii) the
termination of all outstanding options in connection with a Corporate
Transaction. Upon such Plan termination, all options and unvested stock
issuances outstanding under the Plan shall continue to have full force and
effect in accordance with the provisions of the documents evidencing such
options or issuances.

      II.   AMENDMENT OF THE PLAN

      The Board shall have complete and exclusive power and authority to amend
or modify the Plan in any or all respects. However, no such amendment or
modification shall adversely affect the rights and obligations with respect to
options or unvested stock issuances at the time outstanding under the Plan,
unless the Optionee consents to such amendment or modification.

      III.  USE OF PROCEEDS

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      Any cash proceeds received by the Corporation from the sale of shares of
Common Stock under the Plan shall be used for general corporate purposes.

      IV.   WITHHOLDING

      The Corporation's obligation to deliver shares of Common Stock upon the
exercise of any options or upon the issuance or vesting of any shares issued
under the Plan shall be subject to the satisfaction of all applicable Federal,
state and local income and employment tax withholding requirements.

      V.    REGULATORY APPROVALS

      The implementation of the Plan, the granting of any options under the Plan
and the issuance of any shares of Common Stock upon the exercise of any option
shall be subject to the Corporation's procurement of all approvals and permits
required by regulatory authorities having jurisdiction over the Plan, the
options granted under it and the shares of Common Stock issued pursuant to it.

      VI.   NO EMPLOYMENT OR SERVICE RIGHTS

      Nothing in the Plan shall confer upon the Optionee any right to continue
in Service for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining such person) or of the Optionee, which rights are hereby
expressly reserved by each, to terminate such person's Service at any time for
any reason, with or without cause.

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                                    APPENDIX

      The following definitions shall be in effect under the Plan

      A.    Board shall mean the Corporation's Board of Directors.

      B.    Cause shall mean any of the following: (i) Optionee's material
breach of any employee, confidentiality, or other employment related agreement
with the Corporation, (ii) Optionee's violation of the Corporation's policies or
procedures set forth in the Corporation's Policies and Procedure Manual, as
amended from time to time, or (iii) Optionee's conviction of or entrance of a
plea of nolo contenders to a felony or to any other crime punishable by
incarceration.

      C.    Code shall mean the Internal Revenue Code of 1986, as amended.

      D.    Committee shall mean a committee of two (2) or more Board members
appointed by the Board to exercise one or more administrative functions under
the Plan.

      E.    Common Stock shall mean the Corporation's common stock.

      F.    Corporate Transaction shall mean either of the following
shareholder-approved transactions to which the Corporation is a party:

            (i)   a merger or consolidation in which securities possessing more
      than fifty percent (50%) of the total combined voting power of the
      Corporation's outstanding securities are transferred to a person or
      persons different from the persons holding those securities immediately
      prior to such transaction, or

            (ii)  the sale, transfer or other disposition of all or
      substantially all of the Corporation's assets, or the complete liquidation
      or dissolution of the Corporation.

      G.    Corporation shall mean Caldera Systems, Inc., a Utah corporation.

      H.    Disability shall mean the inability of the Optionee to engage in the
performance of his duties as an Employee for a period exceeding three (3) months
by reason of any medically determinable physical or mental impairment and shall
be determined by the Plan Administrator on the basis of such medical evidence as
the Plan Administrator deems warranted under the circumstances.

      I.    Domestic Relations Order shall mean any judgment, decree or order
(including approval of a property settlement agreement) which provides or
otherwise conveys, pursuant to applicable State domestic relations laws
(including community property laws), marital property rights to any spouse or
former spouse of the Optionee.

      J.    Employee shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.

      K.    Exercise Date shall mean the date on which the Corporation shall
have received written notice of the Date option exercise.

      L.    Fair Market Value per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:

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            (i)   If the Common Stock is at the time traded on the Nasdaq
      National Market, then the Fair Market Value shall be the closing selling
      price per share of Common Stock on the date in question, as such price is
      reported by the National Association of Securities Dealers on the Nasdaq
      National Market or any successor system. If there is no closing selling
      price for the Common Stock on the date in question, then the Fair Market
      Value shall be the closing selling price on the last preceding date for
      which such quotation exists.

            (ii)  If the Common Stock is at the time listed on any Stock
      Exchange, then the Fair Market Value shall be the closing selling price
      per share of Common Stock on the date in question on the Stock Exchange
      determined by the Plan Administrator to be the primary market for the
      Common Stock, as such price is officially quoted in the composite tape of
      transactions on such exchange. If there is no closing selling price for
      the Common Stock on the date in question, then the Fair Market Value shall
      be the closing selling price on the last preceding date for which such
      quotation exists.

            (iii) If the Common Stock is at the time neither listed on any Stock
      Exchange nor traded on the Nasdaq National Market, then the Fair Market
      Value shall be conclusively determined by the Plan Administrator after
      taking into account such factors as the Plan Administrator shall deem
      appropriate.

      M.    1934 Act shall mean the Securities Exchange Act of 1934, as amended.

      N.    Non-Statutory Option shall mean an option not intended to satisfy
the requirements of Code Section 422.

      O.    Optionee shall mean any person to whom an option is granted under
the Plan.

      P.    Parent shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

      Q.    Plan shall mean the Corporation's 1998 Stock Option Plan, as set
forth in this document.

      R.    Plan Administrator shall mean either the Board or the Committee, to
the extent the Committee is at the time responsible for the administration of
the Plan.

      S.    Qualified Domestic Relations Order shall mean a Domestic Relations
Order which substantially complies with the requirements of Code Section 414(p).
The Plan Administrator shall have the sole discretion to determine whether a
Domestic Relations Order is a Qualified Domestic Relations Order.

      T.    Service shall mean the provision of services to the Corporation (or
any Parent or Subsidiary) by a person in the capacity of an Employee, a
non-employee member of the board of directors or a consultant except to the
extent otherwise specifically provided in the documents evidencing the option or
stock issuance.

      U.    Stock Exchange shall mean either the American Stock Exchange or the
New York Stock Exchange.

      V.    Subsidiary shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.

                                       A-2<PAGE>   1
                                                                   EXHIBIT 10.4
                              CALDERA SYSTEMS, INC

                        1999 OMNIBUS STOCK INCENTIVE PLAN

1.    Establishment and Purpose.

      There is hereby adopted the Caldera Systems, Inc. 1999 Omnibus Stock
Incentive Plan (the "Plan"). The Plan shall be the successor to the Caldera
Systems, Inc. 1998 Stock Option Plan (the "Predecessor Plan"). Upon adoption of
the Plan by the Board of Directors and approval of the Plan by the stockholders
of Caldera Systems, Inc. (the "Company"), no further awards shall be made under
the Predecessor Plan. If the Plan is not approved by the stockholders of the
Company, the Predecessor Plan shall remain in full force and effect. 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 which 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

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            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 which 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 Systems, Inc., a Utah 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.

      (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.

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      (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" shall mean an employee of the Company or a subsidiary
            of the Company to whom an Incentive Award is granted pursuant to the
            Plan, and, upon his death, his 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.

      (v)   "Plan" shall mean this 1999 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.

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      (x)   "Restricted Stock" shall mean a share of Common Stock which is
            granted pursuant to the terms of Section 10 hereof and which 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 which 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 which is related to an Option.

      (af)  "Vesting Date" shall mean the date established by the Committee on
            which a share of Restricted Stock or Phantom Stock 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 3,705,238 shares (subject to adjustment as
            provided herein), which shall include 2,705,238 shares authorized
            but unissued under the Predecessor Plan. 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 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.

                                       4
<PAGE>   5

      (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 200,000 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 which 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.

      (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

                                       5
<PAGE>   6

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.

5.    Eligibility.

      The persons who shall be eligible to receive Incentive Awards pursuant to
the Plan shall be such employees of the Company or its Subsidiaries (including
officers of the Company or its Subsidiaries, whether or not they are directors
of the Company or its Subsidiaries) as the Committee shall select from time to
time. Directors and others who are not employees or officers of the Company,
including persons who may be expected to make a contribution to the Company's
future success, shall also be eligible to receive Incentive Awards under the
Plan.

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 which 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.

                                       6
<PAGE>   7

      (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 determined by the Committee but shall in no event be
            less than the Fair Market Value of a share of Common Stock on the
            date the Option is granted.

      (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 may be exercised for all or any portion of the
            shares as to which it is exercisable, provided, that no partial
            exercise of an Option shall be for an aggregate exercise price of
            less than $1,000. The partial exercise of an Option shall not cause
            the expiration, termination or cancellation of the remaining portion
            thereof.

                  (3) 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. 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 with appropriate stock powers, (iv) by electing to
            have the Company retain shares of Common Stock which would otherwise
            be issued on the exercise of the Option, or (v) 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.

                  (4) 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.

                                       7
<PAGE>   8

      (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.

                  (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 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) If a Participant's employment with the Company or a
            Subsidiary of the Company is terminated for Cause, all outstanding
            options granted to such Participant shall expire at the commencement
            of business on the date of such termination.

                                       8
<PAGE>   9

      (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.

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
            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) A Tandem SAR may be exercised for all or any portion of
            the shares as to which the related Option is exercisable; provided,
            that no partial exercise of a Tandem SAR shall be for less than a
            number of shares having an aggregate option exercise price of less
            than $1,000. The partial exercise of a Tandem SAR shall not cause
            the expiration, termination or cancellation of the remaining portion
            thereof.

                                       9
<PAGE>   10

                  (4) 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.

                  (5) 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. 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 may be exercised for all or any portion
            of the shares as to which it is exercisable; provided, that no
            partial exercise of a Stand-Alone SAR shall be for an aggregate
            Reference Value of less than $1,000. The partial exercise of a
            Stand-Alone SAR shall not cause the expiration, termination or
            cancellation of the remaining portion thereof.

                  (3) 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. 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.

                                       10
<PAGE>   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 which 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.

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.

      (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.

                                       11
<PAGE>   12

      (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 1999 Omnibus Stock Incentive Plan of
            Caldera Systems, 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 Systems, Inc., 240 West Center Street, Orem,
            Utah 84057. 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.

      (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 which have not vested as of the

                                       12
<PAGE>   13

            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 which have not theretofore
            vested shall immediately expire and be cancelled.

      (i)   Special Provisions Regarding Restricted Stock Awards.

            Notwithstanding anything to the contrary contained herein,
            Restricted Stock granted pursuant to this Section 10 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 of Restricted
            Stock shall be released from restrictions only after the attainment
            of such performance measures have been certified by the Committee.

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.

                                       13
<PAGE>   14

      (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 which 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 which have not theretofore vested shall immediately
            expire and be cancelled.

      (f)   Special Provisions Regarding Phantom Stock Awards.

            Notwithstanding anything to the contrary contained herein, Phantom
            Stock granted pursuant to this Section 11 to Executive Officers
            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 from continuing operations; (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. No cash payment in
            respect of any Phantom Stock award will be paid to an Executive
            Officer until the attainment of the respective 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.

                                       14
<PAGE>   15

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.

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.

                                       15
<PAGE>   16

16.   Withholding Taxes.

      Whenever cash is to be paid pursuant to an Incentive Award, the Company
shall have the right to deduct therefrom 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 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 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 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.

                                       16
<PAGE>   17

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.

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.

                                       17
<PAGE>   18

      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.

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.

                                       18

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