10.4 1999 OMNIBUS STOCK INCENTIVE PLAN

See original SEC file that this excerpt taken from at Form S-4 file number 333-45936 2000-09-15

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                                                                      APPENDIX F

                              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 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
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           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.

          (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
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     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.

          (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

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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.

     (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 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

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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.

     (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.

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             (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.

     (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.

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             (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.

     (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.

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          (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.

     (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.

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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.

     (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

                                       F-9
<PAGE>   351

     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 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.

     (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.

                                      F-10
<PAGE>   352

          (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.

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

                                      F-11
<PAGE>   353

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
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

                                      F-12
<PAGE>   354

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.

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.

                                      F-13
<PAGE>   355

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.

                                      F-14
<PAGE>   356

                                                                      APPENDIX G

                                AMENDMENT NO. 1
                                       TO
                       1999 OMNIBUS STOCK INCENTIVE PLAN

     This Amendment No. 1 to the 1999 Omnibus Stock Incentive Plan (this
"Amendment") is executed by the undersigned, by and on behalf of Caldera
Systems, Inc., a Delaware corporation (the "Company").

                                   BACKGROUND

     A. The Company has adopted the Caldera Systems, Inc. 1999 Omnibus Stock
Incentive Plan (the "1999 Plan") pursuant to which the Company may grant Options
and other Incentive Awards to employees, directors and certain consultants of
the Company and its subsidiaries. Capitalized terms used in this Amendment but
not defined herein have the meaning set forth in the 1999 Plan.

     B. The Company desires to amend the 1999 Plan in order to increase the
number of shares of Common Stock reserved for issuance under the 1999 Plan.

                                   AMENDMENT

     NOW, THEREFORE, the 1999 Plan is hereby amended as follows:

          1. INCREASE IN NUMBER OF SHARES SUBJECT TO THE PLAN AND INDIVIDUAL
     LIMITATION.

          The first sentence of Section 3(a) of the Plan is hereby deleted in
     its entirety, and the following is hereby inserted in its stead:

             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
        4,105,238 shares.

          2. RATIFICATION. Except as specifically modified hereby, the Plan is
     hereby ratified and reaffirmed by the Company.

     The undersigned, who is the duly elected Secretary of the Company, hereby
certifies that (i) the Board of Directors of the Company approved this Amendment
on March 10, 2000, and (ii) that the shareholders of the Company approved this
Amendment on March 22, 2000, at which time this Amendment became effective.

                                            CALDERA SYSTEMS, INC.,
                                            a Delaware corporation

                                            By:      /s/ RICHARD RIFE
                                              ----------------------------------
                                                          Secretary

                                       G-1
<PAGE>   357

                                                                      APPENDIX H

                                AMENDMENT NO. 2
                                       TO
                       1999 OMNIBUS STOCK INCENTIVE PLAN

     This Amendment No. 2 to the 1999 Omnibus Stock Incentive Plan (this
"Amendment") is executed by the undersigned, by and on behalf of Caldera
Systems, Inc., a Delaware corporation (the "Company").

                                   BACKGROUND

     The Company has adopted the Caldera Systems, Inc. 1999 Omnibus Stock
Incentive Plan (the "1999 Plan"). The Company desires to amend the 1999 Plan in
order to increase the number of shares of Common Stock reserved for issuance
under the 1999 Plan. Capitalized terms used in this Amendment but not defined
herein have the meaning set forth in the 1999 Plan.

                                   AMENDMENT

     Effective as of July 14 2000, the Board of Directors unanimously adopted
the Amendment in the form given below, subject to approval of the Amendment by
the Company's Stockholders.

     NOW, THEREFORE, the 1999 Plan is hereby amended as follows:

          1. Increase in Number of Shares Subject to the Plan and Individual
     Limitation. The first sentence of Section 3(a) of the Plan is hereby
     deleted in its entirety, and the following is inserted in its stead:

             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
        6,405,238 shares, increased as of November 1 each year, beginning
        November 1, 2000, by three percent (3%) of the total number of shares of
        Common Stock that are issued and outstanding on the immediately
        preceding October 31st. Notwithstanding the foregoing, subject to
        adjustment under Section 3(c) below the number of shares of Common Stock
        that may be issued upon the exercise of Incentive Stock Options under
        the Plan shall in no event exceed 6,405,238 shares, increased as of
        November 1 each year, beginning November 1, 2000 and continuing through
        November 1, 2008, by 100,000 shares per year

          2. Ratification. Except as specifically modified hereby, the Plan is
     hereby ratified and reaffirmed by the Company.

          3. Effectiveness. No shares of Common Stock shall be issued or other
     Incentive Awards shall be permitted to be exercised in reliance upon this
     Amendment unless and until the shareholders have approved this Amendment
     and any waiting periods required by governing laws or regulations have
     passed..

     The undersigned, Richard Rife, Secretary, hereby certifies that the Board
of Directors of the Company adopted the foregoing Amendment as stated in
Background above.

     Executed as of the 14th day of July 2000.

                                            CALDERA SYSTEMS, INC.,
                                            a Delaware corporation

                                            By:      /s/ RICHARD RIFE
                                              ----------------------------------
                                                          Secretary

                                       H-1
<PAGE>   358

                                                                      APPENDIX I

                                AMENDMENT NO. 3
                                       TO
                       1999 OMNIBUS STOCK INCENTIVE PLAN

     This Amendment No. 3 to the 1999 Omnibus Stock Incentive Plan (this
"Amendment") is executed by the undersigned, by and on behalf of Caldera
Systems, Inc., a Delaware corporation (the "Company").

                                   BACKGROUND

     A. The Company has adopted the Caldera Systems, Inc. 1999 Omnibus Stock
Incentive Plan (the "1999 Plan") pursuant to which the Company may grant Options
and other Incentive Awards to employees, directors and certain consultants of
the Company and its subsidiaries. Capitalized terms used in this Amendment but
not defined herein have the meaning set forth in the 1999 Plan.

     B. The Company desires to amend the 1999 Plan in order to incorporate a
formula award program pursuant to which directors of the Company will
automatically be granted 100,000 Non-Qualified Stock Options (vesting 50% on the
first anniversary of the date of grant and 50% on the second anniversary of the
date of grant) every two years.

                                   AMENDMENT

     NOW, THEREFORE, the 1999 Plan is hereby amended as follows:

          1. Director Formula Award Program. A new Section 30 is hereby added to
     the 1999 Plan, the content of which is as follows:

             SECTION 30. FORMULA AWARDS.

             30.1  General. The provisions of this Section 30 are applicable
        only to Options granted to directors of the Company ("Directors")
        pursuant to 30.2 below.

             30.2  Grants.

                (a) Initial Bi-Annual Grant. Subject to the limitations set
           forth in Section 30.8 and prior approval of this Amendment by the
           shareholders of the Company, Options to purchase 100,000 shares of
           Common Stock shall automatically be granted to each individual who is
           elected to serve or continues to serve as a Director following the
           date of the regularly scheduled annual meeting of shareholders of the
           Company (an "Annual Meeting") during the 2002 calendar year. Such
           Options shall be granted as of the date of such Annual Meeting, and
           the option exercise price for such Options shall be the Fair Market
           Value of a share of Common Stock on the date of grant. Such Options
           shall be exercisable 50% on the first anniversary of the date of
           grant and 50% on the second anniversary of the date of grant. No
           Options shall be granted under this provision if an Annual Meeting is
           not held during the 2002 calendar year.

                (b) Subsequent Bi-Annual Grants. Subject to the limitations set
           forth in Section 30.8 and prior approval of this Amendment by the
           shareholders of the Company, as of the date of each Annual Meeting
           held during any even-numbered calendar year beginning in 2004,
           Options to purchase 100,000 shares of Common Stock shall
           automatically be granted to each individual who is elected to serve
           or continues to serve as a Director following such Annual Meeting.
           The option exercise price for such Options shall be the Fair Market
           Value of a share of Common Stock on the date of grant. Such Options
           shall become exercisable 50% on the first anniversary of the date of
           grant and 50% on the second anniversary of the

                                       I-1
<PAGE>   359

           date of grant. No Options shall be granted under this provision if an
           Annual Meeting is not held during the respective even numbered year.

                (c) New Directors. Subject to the limitations set forth in
           Section 30.8 and prior approval of this Amendment by the shareholders
           of the Company, persons who are first elected or appointed to serve
           as a Director after the effective date of this Amendment shall
           automatically be granted Options to purchase a number of shares of
           Common Stock determined using the following formula:

<TABLE>
<S>                  <C>
                     Months X 100,000
Number of Options =  ----------------
                            24
</TABLE>

                Months -- the number of full calendar months between the date
           the Director's service as a Director commences and March 1 of the
           next even numbered year.

                Such Options shall be granted as of the date of commencement of
           the Director's service as a director, and the option exercise price
           for such Options shall be the Fair Market Value of a share of Common
           Stock on the date of grant. Any such Options shall become exercisable
           50% on the first anniversary of the date of date of grant and 50% on
           the second anniversary of the date of grant.

                (d) Top-Up Grant for Existing Directors. This subsection (d)
           applies to any directors whose Options are scheduled to vest
           completely prior to March 1, 2002. Subject to the limitations set
           forth in Section 30.8 and prior approval of this Section 30 by the
           shareholders of the Company, each such director shall automatically
           be granted Options to purchase a number of shares of Common Stock
           using the formula stated in subsection (c) above. Such Options shall
           be granted as of the first day of the month following the date on
           which the director's Options are schedule to fully vest, and the
           option exercise price for such Options shall be the Fair Market Value
           of a share of Common Stock on the date of grant. Any such options
           shall become exercisable 50% on the first anniversary of the date of
           grant and 50% on the second anniversary of the date of grant.

             30.3  Option Agreement. Each Option granted under this Section 30
        shall be evidenced by an Award Agreement duly executed on behalf of the
        Company and by the Director to whom such Option is granted and dated as
        of the applicable date of grant. All Options granted under this Section
        30 shall be Non-Qualified Stock Options unless, with respect to
        Directors who are also employees of the Company, the Committee
        determines, in its discretion before the date of grant, that some or all
        such Options shall be Incentive Stock Options.

             30.5  Method of Exercise And Payment. The method of exercise and
        payment of the exercise price for Options granted under this Section
        shall be as set forth in Section 7(c)(2)(3), and (4).

             30.6  Term of Formula Awards. Each Formula Award shall expire ten
        (10) years from its date of grant, but shall be subject to earlier
        termination as provided in Section 7(f) and Section 7(e), provided that
        references to termination of "employment" shall be deemed to refer to
        termination of "service as a director."

             30.7  Limitation as to Directorship. Neither this Section 30, nor
        the granting of a Formula Award, nor any other action taken pursuant to
        this Section 30, shall constitute or be evidence of any agreement or
        understanding, express or implied, that a Director has a right to
        continue as a Director for any period of time or at any particular rate
        of compensation. No Director shall have any right to be granted any
        Option under this Section 30 until such Option is deemed to have been
        granted under this Section 30, and the Board of Directors may amend or
        eliminate this Section 30 at any time for any reason.

             30.8  Termination of Formula Awards. Notwithstanding any provision
        to the contrary, no Option shall be granted pursuant to Section 30.2 on
        a date when the number of shares of

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        Common Stock authorized for issuance pursuant to the Plan is less than
        the sum of (a) all shares of Common Stock issued upon the exercise of
        all Options granted under the Plan to date, (b) all shares of Common
        Stock subject to outstanding, unexpired Options, and (c) all Options
        that would, but for the effect of this provision, be granted pursuant to
        Section 30 on that date. In the event Options are not granted as a
        result of the application of this Section 30.8, no Options shall
        thereafter be granted pursuant to this Section 30 until the shareholders
        of the Company approve an amendment to the Plan increasing the number of
        shares of Common Stock available hereunder.

             30.9  Other Plan Provisions. All provisions of the Plan not
        inconsistent with this Section 30 shall apply to Options granted to
        Directors under this Section 30. In the event of any conflict between a
        provision of this Section 30 and a provision in any other Section of the
        Plan, such provision of this Section 30 shall be deemed to control with
        respect to Options granted under this Section 30.

          2. Ratification. Except as specifically modified hereby, the Plan is
     hereby ratified and reaffirmed by the Company.

          3. Effectiveness. This Amendment shall be effective on the date it is
     approved by the shareholders of the Company.

     The undersigned, who is the duly elected Secretary of the Company, hereby
certifies that, following approval of this Amendment by the Board of Directors
of the Company, the shareholders approved this amendment at a duly convened
meeting of the shareholders on             , 2000.

                                            CALDERA SYSTEMS, INC.,
                                            a Delaware Corporation

                                            By:
                                              ----------------------------------
                                                       Richard C. Rife,
                                                   its Corporate Secretary

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<PAGE>   361

                                                                      APPENDIX J

                                AMENDMENT NO. 4
                                       TO
                       1999 OMNIBUS STOCK INCENTIVE PLAN

     This Amendment No. 4 to the 1999 Omnibus Stock Incentive Plan (this
"Amendment") is executed by the undersigned, by and on behalf of Caldera
Systems, Inc., a D