EXHIBIT 4.2


                             STMICROELECTRONICS N.V.
                             2001 STOCK OPTION PLAN


1   Purpose

    The STMicroelectronics N.V. 2001 Stock Option Plan (the "Plan") which
succeeds the 1995 Stock Option Plan, is intended to provide an additional
incentive to directors, managers and selected persons having an Employment
Agreement with STMicroelectronics N.V., a company incorporated in the
Netherlands (the "Company") or its Subsidiaries (the "Eligible Employees"), to
remain with the Company and its Subsidiaries, and to increase their efforts for
the success of the Company. For this purpose the Company will grant stock
options (the "Options") to purchase shares of the Company (the " Shares")
thereby offering the aforementioned eligible employees an opportunity to obtain
or increase their proprietary interest in the Company. The Options shall be
granted in accordance with the objectives fixed by the Supervisory Board and
subject to the evaluation of the achievement of such objectives. Consistent with
these objectives, the Plan authorizes the granting of Options, in various
instalments over a five year period expiring at the annual general meeting
approving the accounts for financial year 2005 and pursuant to the terms and
conditions hereinafter set forth.

2   Administration of the Plan

    a)   Members of the Committee - The plan shall be administered in accordance
         with the present terms and conditions by a committee (the "Committee)
         of the Supervisory Board of the Company (the "Supervisory Board")
         comprised of the Chairman and the Vice Chairman of the Supervisory
         Board, as well as at least one member of the Supervisory Board
         appointed by the Supervisory Board. The Committee shall avail itself,
         with the support of the Company which shall bear the relevant financial
         cost, of any legal, tax and accounting advice that the Committee should
         consider necessary or useful for the implementation of its mandate.

    b)   Authority of the Committee - The Committee will administer the Plan on
         behalf of the Supervisory Board in accordance with resolutions of the
         Supervisory Board. Options will be granted by the Committee after
         considering the recommendations of the Managing Board of the Company.
         All questions of interpretation, administration and application of the
         Plan shall be determined by the Committee, except that the Committee
         may authorize any one of its members to execute and deliver documents
         on behalf of the Committee. Except where this Plan otherwise provides
         for the specific authority of the Supervisory Board, the determination
         of the Committee shall be final and binding in all matters relating to
         the administration of the Plan. The Committee will report to the
         Supervisory Board after each of its Committee Meetings, and at least
         once a year. No member of the Committee shall be liable for any act
         done or omitted to be done by such member or by any other member of the
         Committee in connection with the Plan, except for such member's own
         wilful misconduct or as expressly provided by statute.

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3   Stock Reserved for the Plan

         Subject to any adjustment in accordance with the provisions of Section
10, the number of Shares available for Options awarded under the Plan shall not
exceed 60 million Shares. Shares made available under the Plan will be either
newly issued shares, or if the Supervisory Board and the Managing Board so
decide, shares repurchased by the Company.


4   Grant of Options

    a)   Options may be granted to Eligible Employees (including those who are
         members of the Managing Board) of the Company or any Subsidiary of the
         Company. The Committee shall on behalf of the Supervisory Board, have
         the authority, which it shall exercise after taking into consideration
         the recommendations of the Managing Board and in accordance with the
         rules defined by the Supervisory Board, to select from time to time
         those individuals to whom Options may be granted (hereinafter referred
         to as an "Optionee") and to determine the number of Options granted to
         each such Optionee. All Optionees shall be bound by the terms of this
         Plan. No Optionee shall be granted in any fiscal year of the Company,
         options to purchase more than 500'000 shares with a nominal value of
         Euro 1.04 each.

    b)   Windows of grant - Options may be granted on a yearly basis at any time
         except during a period following the end of a financial quarter until
         publication of corresponding results of the Company's quarterly and
         annual financial statements, as well as immediately prior to any event
         reasonably expected to have a material effect on the Company's
         situation.

    c)   Annual Grant - Unless otherwise decided by the Supervisory Board and
         subject to sub-paragraph b) above, Options shall be granted to eligible
         employees of the Company and its Subsidiaries, once each calendar year,
         on the second business day following the annual general meeting of the
         Company.

5   Agreement to Reflect Terms of Grant

    a)   The terms and conditions of each grant of Options shall be embodied in
         a written agreement between the Company and the Optionee or a written
         award certificate delivered by the Company to the Optionee (in either
         case, the "Stock Option Agreement"), which shall contain the price and
         other terms and conditions consistent with those set forth in Section 6
         hereof and shall state the date of the Option grant and the number of
         Shares covered by said Option.

    b)   The Stock Option Agreement shall be signed on behalf of the Company by
         the President of the Supervisory board, or by all members of the
         Compensation Committee, or by a duly appointed representative of such
         Committee.


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6   Terms and Conditions of Options

    a)   Option price - Each Stock Option Agreement shall state the subscription
         price, of each Share subject to an option (the "Option price"). The
         Option Price shall be equal to the price of the Shares of Company at
         close of the NYSE on the day of the grant but in no event lower than
         the nominal value of the Share in Euros, or the equivalent currency
         valid in the Netherlands at the day of payment of the Share subject to
         the Option.

    b)   Vesting

              (i) Each Stock Option Agreement shall state the time or times as
              of which the Option shall vest and become exercisable in whole or
              in increments. Options shall vest and become exercisable as
              determined in Appendix 1 hereto, which may be modified from time
              to time by the Committee with the approval of the Supervisory
              Board. An Option, to the extent vested and exercisable, is
              sometimes referred to herein as a "Vested Option".

              (ii) If an Optionee's employment with the Company and its
              subsidiaries terminates by reason of death (pursuant to section d)
              (iii) below), the Optionee shall be 100 % vested in all Options
              granted to the Optionee prior to such termination of employment.
              The same rules will apply in case of death of the Optionee after
              retirement pursuant to d) (ii) below.

    c)   Restriction on Transfer - Options granted hereunder shall not be
         transferable by the Optionee otherwise than by will or the laws of
         descent and distribution, and shall be exercisable during the
         Optionee's lifetime only by the Optionee unless otherwise provided by
         applicable laws (ie. in the event of divorce).The Shares resulting from
         the exercise of Options may only be sold on a market where the Shares
         of the Company are traded.

d)  Termination of Employment

              (i)    In General. Upon termination of an Optionee's employment
                     agreement with the Company or its subsidiaries, other than
                     pursuant to Optionee's Death or Retirement, the Optionee
                     may exercise within 90 days from such termination, all his
                     or her Options which have vested prior to the effective
                     date of such termination (provided that such Vested Options
                     have not expired, pursuant to the expiration of the term of
                     such Option as set forth in the Stock Option Agreement).

If, on the date of such employment termination, the Optionee is not entitled to
exercise all Options granted to such Optionee, the Shares covered by the
unexercisable Options shall revert to the Plan. If, after termination of his
employment, the Optionee does not exercise all his or her Vested Options within
90 days, such Options shall terminate and the Shares covered by such unexercised
Options shall also revert to the Plan.

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              (ii)   Retirement of Optionee. In the event of termination of an
                     Optionee's employment agreement with the Company or its
                     subsidiaries pursuant to his or her Retirement, such
                     Optionee's Options shall continue to vest, continue to
                     become exercisable, and may be exercised during such period
                     of time as provided in the Option Agreement (but in no
                     event may the Option be exercised after the expiration date
                     of such Options as set forth in the Stock Option
                     Agreement). If, at the end of such period of time, the
                     Optionee has not exercised all his or her Options, the
                     Shares covered by such unexercised Options shall revert to
                     the Plan.

              (iii)  Death of Optionee. Upon the death during the term of an
                     Option of an Optionee who is, at the time of his or her
                     death, an Employee of the Company, the Option may be
                     exercised by the Optionee's estate or by a person who
                     acquired the right to exercise the Option by request or
                     inheritance, at any time within twelve (12) months
                     following the date of death, but in no event later than the
                     expiration of the term of such Options as set forth in the
                     Stock Option Agreement. If such Options are not exercised
                     within the aforementioned periods, the Options shall
                     terminate and the Shares covered by such unexercised
                     Options shall revert to the Plan.

    e)   Duration of Options - Unless the Supervisory Board determines upon
         proposal of the Committee to establish a shorter period at the time of
         grant, each Option shall be effective for a period of (ten) 10 years
         from the date of grant.

    f)   Additional restrictions - Each Option granted hereunder shall be
         subject to such additional terms and conditions not inconsistent with
         this Plan as may be prescribed by the Supervisory Board upon proposal
         of the Committee and set forth in the applicable Stock Option
         Agreement.

    g)   Windows of exercise and sale - The exercise of Stock Options shall be
         subject to:

              (a)  Rules which may be set forth from time to time by the
                   Supervisory Board,
              (b)  The Company's Standard Operating Policy on trading in ST
                   Shares,
              (c)  The applicable rules and regulations in the markets where the
                   Company's Shares are traded, and
              (d)  The Dutch rules on Insider Trading applicable to Dutch
                   residents.

7   Subscription and resale of Shares

    a)   Notice - Subject to the conditions set forth in section 6,7(b) and 8,
         an Optionee may exercise all or any portion of a Vested Option by
         giving written notice to the Company. The date of exercise of the
         Option with respect to the Shares specified in the notice shall be the
         date on which both (i) the Company has received the notice and (ii) the
         conditions provided for in Section 7(b) and 8 have been satisfied.


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    b)   Payment and Other Conditions - The subscription price of the Shares for
         which a Vested Option is being exercised, shall be paid to the Company
         at the time of exercise, in cash (including by check denominated either
         in US dollars, in Euros or in such currency designated in the relevant
         Stock Option Agreement). According to rules and procedures established
         by the Company or its Subsidiary which employs the Optionee, the
         Optionee who wishes to immediately resell the Shares resulting from the
         exercise of his or her Options, may be permitted to make a so-called
         "cashless" exercise of Vested Options with a bank or any financial
         institution designated by the Company, notwithstanding the minimal
         payment on the Shares referred to in Section 6(a).

    c)   Issuance or transfer of Shares - Upon receipt of payment and
         satisfaction of the conditions of Section 7(b) and 8 hereof, the
         Company shall cause the custodian (the "Custodian") of the Company's
         Shares to issue or transfer the Shares in respect of which the Option
         shall have been exercised. Upon and in accordance with the Optionee's
         instructions, the Company shall cause the Custodian to register in the
         name of the Optionee such Shares on a share register maintained on
         behalf of the Company.

    d)   Resale of Shares - The Company or its subsidiaries may from time to
         time in accordance with local requirements applicable to the Company or
         its Subsidiaries require Optionees to declare to his employer the
         resale of Shares resulting from the exercise of Stock Options.


8   Compliance with Applicable Law

              If at any time the Company's Chief legal counsel shall determine
that the consent, registration or approval of any governmental regulatory body
is necessary as a condition of, or in connection with the granting of any Option
or the delivery or subscription of Shares pursuant to any Option, such Option
may not be exercised in whole or in part, unless such consent or approval shall
have been effected or obtained free of any conditions not acceptable by the
Company, upon the recommendations of such legal counsel. Such counsel's
recommendations in this connection may take into account laws or other
restrictions applicable to an Optionee by reason of his nationality or
residence.


9   No restriction on Right of the Company to effect corporate changes

         The Plan and the Options granted hereunder, shall not affect in any way
the right or power of the Company or its shareholders to make or authorize any
or all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issue of stock or of options, warrants or rights to purchase
stock or of bonds, debentures, preferred or other preference stocks whose rights
are superior to or affect the Shares, or the rights thereof or which are
convertible


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into or exchangeable for Shares, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.


10  Effect of Certain Corporate Changes

         In the event of issuance or repurchase of stock or securities
convertible into or exchangeable for shares, grants of options, warrants or
rights to purchase stock, a business combination, exchange or similar change
affecting the Shares, the Committee may, after taking into consideration the
legal, tax and accounting advice for involved countries which shall be obtained
at the Company's expense, and, after obtaining Supervisory Board approval, make
such equitable adjustments to the terms of the Plan or of outstanding Options
(whether or not vested) which, in its sole discretion, it shall deem
appropriate. Such adjustments, which shall be made in addition to all other
adjustments required by law, pursuant to any of the abovementioned events, may
include, among other things: (i) adjusting the aggregate number of Shares
available for awards under the Plan, (ii) adjusting the Option Price applicable
to any outstanding Options, (iii) adjusting the number of Shares (or such other
security as is designated by the Supervisory Board) pertaining to any
outstanding Options and (iv) making any other equitable adjustments or taking
such other equitable action as the Supervisory Board shall deem appropriate.
Without limiting the generality of the preceding sentence, Optionees shall not,
unless the Supervisory Board shall determine otherwise, be entitled to any
adjustment in the terms of their Options, or to any grants of additional
Options, if the Company issues Shares, or any other security, for value. All
adjustments or actions taken by the Committee with the approval of the
Supervisory Board or by the Supervisory Board pursuant to this Section 10, shall
be conclusive and binding for all purposes.


11  Definitions - As used in the Plan, the following terms have the meanings set
    forth below:

    a)   " Employment Agreement" means an agreement or any other employment
         relationship whether or not evidenced by a written agreement (including
         "at will" employment") between an employee and the Company and/or its
         Subsidiaries which is not interrupted or terminated. Such Agreement
         shall not be considered interrupted in the case of (i) any leave or
         absence approved by the Company, its subsidiaries as well as any
         transfer between locations of the Company or between the Company, any
         subsidiary, or any successor. A leave of absence approved by the
         Company shall include sick leave, sabbatical leave, or any other
         personal leave approved by an authorized representative of the Company
         or its Subsidiaries.

    b)   "Option" means an option to purchase Shares of the Company granted
         pursuant to this Plan.

    c)   "Option Agreement" means the Stock Option agreement between the Company
         and an Optionee described in paragraph 5 above.

    d)   "Optionee" means an Employee who has been granted an Option pursuant to
         paragraph 4


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         above. To the extent required in accordance with applicable legislation
         in the event of the death of an Optionee the term Optionee shall be
         construed to apply to the executors, the administrators, Designated
         Beneficiary (as defined below) or any other person or persons to whom
         an Option may be transferred by will or by the laws of descent and
         distribution or by reason of the death of the Optionee, the word
         "Optionee" shall be deemed to include such person or persons. As used
         herein, the term "Designated Beneficiary" shall mean the person or
         persons last designated as such by the Optionee as the person who shall
         have the right to exercise such Option after the Optionee's death on a
         form filed by the Optionee with the Committee in accordance with such
         procedures as the Committee shall establish. If no such person is
         designated, the Designated Beneficiary shall be the Optionee's estate.

    e)   "Plan" means this 2001 Stock Option Plan

    f)   "Retirement" means: the status of a former employee of the Company or
         its Subsidiary who benefits from the minimum pension rights in
         accordance with applicable laws, immediately following the termination
         of his employment agreement with Company or its Subsidiary.

    g)   "Share" means a share of the Stock of the Company, as adjusted from
         time to time pursuant to Section 10 of this Plan.

    h)   "Subsidiary" means an affiliate corporation, partnership, joint venture
         or other entity in which the Company holds a majority equity interest,
         which does not have its own stock option plan and in which, directly or
         indirectly, the Company alone or jointly holds more than one half of
         the voting rights at a general meeting, or can appoint or dismiss,
         alone or jointly with others, more than one half of the directors.


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12  Miscellaneous

    (a)  No Rights to Continued Employment - Neither the Plan or any action
         taken hereunder shall be construed as giving any eligible employee any
         right to be retained in the employment of the Company or any of its
         Subsidiaries.

    (b)  Stockholder Rights - An Optionee shall have no rights as a stockholder
         with respect to any Shares covered by an Option until such Shares shall
         have been issued or transferred to such Optionee, and no adjustment
         shall be made for dividends or distributions or other rights in respect
         of any Shares for which the record date is prior to the date upon which
         the Optionee shall become the holder of record thereof.

    (c)  Any and all tax burdens eventually charged worldwide to any Optionee
         shall remain at its sole account.

    (d)  Inconsistency - With respect to any Options granted pursuant to the
         Plan, in the event of any conflict or inconsistency between the Plan
         and the Stock Option Agreement, the Plan shall govern and the Stock
         Option Agreement shall be interpreted to minimize or eliminate any
         conflict or inconsistency.

    (e)  Information to Stockholders - The Supervisory Board will report at the
         end of each year or at the latest at the stockholder meeting approving
         the financial accounts, the number of options exercised during the last
         financial year and other informations required by laws or stock
         exchanges regulation.

13  Amendment

The Supervisory Board may at any time and from time to time alter, amend,
suspend or terminate the Plan in whole or in part. No amendment or termination
shall adversely affect any of the rights of any Optionee, without such
Optionee's consent, under any Option already granted under the Plan.

14  Adoption Date

The Plan shall become effective as of April 25th, 2001 (the "Adoption Date")
after the receipt of approval of the Plan by the Shareholders of the Company.

15  Headings

The headings of sections and subsections herein are included solely for
convenience of reference and shall not affect the meaning of any of the
provisions of the Plan.

16  Governing Law

This Plan and all rights hereunder shall be construed in accordance with and
governed by the laws of the Netherlands.

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         This Plan has been adopted by the Supervisory Board as of March 12th,
2001.

Appendix 1
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VESTING SCHEDULE

Vesting of Stock Options as provided under Article 6 b) of the 2001 Stock Option
Plan shall occur as follows:


         -    32% of the Options granted shall vest two years following the date
              of grant,

         -    32% of the Options granted shall vest three years following the
              date of grant,

         -    36% of the Options granted shall vest four years following the
              date of grant.