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                                                                     EXHIBIT 4.2


                            SUBMICRON DESIGN, INC.

                        1996 DIRECTOR STOCK OPTION PLAN


     1.  Purpose of the Plan.  The purpose of this 1996 Director Stock Option
         -------------------
Plan (the "Plan"), adopted by the Board of Directors of SubMicron Design, Inc.
on October 1, 1996, is to attract and retain the best available individuals to
serve as Directors of the Company, to provide additional incentive to the
Outside Directors of the Company to serve as Directors and to encourage
continued service by such persons on the Board.

         The Company intends that the options granted hereunder shall not
constitute incentive stock options within the meaning of Section 422 of the
Code, as amended.

     2.  Definitions.  As used herein, the following definitions shall apply:
         -----------

         (a) "Board" shall mean the Board of Directors of the Company.
              -----

         (b) "Code"  shall mean the Internal Revenue Code of 1986, as amended.
              ----

         (c) "Common Stock" shall mean the Common Stock, $.01 par value per
              ------------
     share, of the Company.

         (d) "Company" shall mean SubMicron Design, Inc., a Minnesota
              -------
     corporation.

         (e) "Committee" shall mean a committee of the Board appointed by the
              ---------
     Board to administer the Plan.

         (f) "Continuous Service as a Director" shall mean the absence of any
              --------------------------------
     interruption or termination of service as a Director.  Continuous Service
     as a Director shall not be considered interrupted in the case of sick
     leave, military leave or any other leave of absence approved by the Board
     or Committee.

         (g) "Director" shall mean a member of the Board.
              --------

         (h) "Employee" shall mean any person, including officers and
              --------
     Directors, employed by the Company or any Parent or Subsidiary of the
     Company.  The payment of fees to a Director shall not be sufficient in and
     of itself to constitute "employment" by the Company.

         (i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
              ------------
     amended.

         (j) "Option" shall mean a stock option granted pursuant to the Plan.
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          (k) "Optioned Stock" shall mean the Common Stock subject to an Option.
               --------------

          (l) "Optionee" shall mean an Outside Director who receives an option.
               --------

          (m) "Outside Director" shall mean a Director who is not an Employee,
               ----------------
     including an officer who is not employed on a full-time basis by the
     Company.

          (n) "Parent" shall mean a "parent corporation," whether now or
               ------
     hereafter existing, as defined in Section 424(e) of the Code.

          (o) "Plan" shall mean this 1996 Director Stock Option Plan.
               ----

          (p) "Share" shall mean a share of Common Stock, as adjusted in
               -----
     accordance with Section 12 of the Plan.

          (q) "Subsidiary" shall mean a "subsidiary corporation," whether now or
               ----------
     hereafter existing, as defined in Section 424(f) of the Internal Revenue
     Code of 1986, as amended.

     3.   Stock Subject to the Plan.  Subject to the provisions of Section 12 of
          -------------------------
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 250,000 shares of Common Stock.  The Shares may be authorized,
but unissued, or reacquired Common Stock.

          If an Option expires or becomes unexercisable for any reason without
having been exercised in full, the unexercised Shares which were subject thereto
shall, unless the Plan has been terminated, become available for future grant
under the Plan. If Shares which were acquired upon exercise of an Option are
subsequently repurchased by the Company, such Shares shall not become available
for future grant under the Plan.

     4.   Automatic Grant of Options.  All grants of Options hereunder shall be
          --------------------------
automatic and non-discretionary and shall be made strictly in accordance with
the following provisions:

          (a) No person shall have any discretion to select which Outside
     Directors shall be granted Options or to determine the number of Shares to
     be covered by Options granted to Outside Directors.

          (b) Each Outside Director, including persons who are Outside Directors
     on the date of adoption of the Plan, shall be automatically granted an
     option to purchase 12,000 Shares (the "First Option") upon the later to
     occur of (i) the effective date of the Plan, as determined in accordance
     with Section 8 hereof, or (ii) the date on which such person first becomes
     an Outside Director, whether through election by the shareholders of the
     Company or appointment by the Board to fill a vacancy.

          (c) After the First Option has been granted to an Outside Director,
     such Outside

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     Director shall thereafter be automatically granted an Option to purchase
     12,000 shares on the first and each successive anniversary of the grant of
     the First Option; provided, however, that in no event shall an Outside
     Director be granted options to purchase in the aggregate more than 60,000
     shares pursuant to the Plan.

          (d) Notwithstanding the provisions of Sections 4(b) and (c) hereof, in
     the event that a grant would cause the number of Shares subject to
     outstanding Options to Outside Directors plus Shares previously purchased
     upon exercise of Options by Outside Directors to exceed 250,000 Shares,
     then each such automatic grant shall be for that number of Shares
     determined by dividing the total number of Shares remaining available for
     grant by the number of Outside Directors on the automatic grant date.  Any
     further grants shall then be deferred until such time, if any, as
     additional Shares become available for grant under the Plan through action
     of the Company's shareholders to increase the number of Shares which may be
     issued under the Plan or through cancellation or expiration of Options
     previously granted hereunder.

     5.   Option Terms and Conditions.  The terms and conditions of an Option
          ---------------------------
granted hereunder shall be as follows:

          (a) the term of each Option shall be five (5) years, subject to
     Sections 12, 13 and 14 hereof.

          (b) the First Option shall become exercisable in full beginning on the
     later of (i) the first anniversary of the grant of the Option, or (ii)
     twelve (12) months after the date on which the Plan is first approved by
     the shareholders of the Company in accordance with Rule 16b-3 promulgated
     under the Exchange Act and each subsequent Option shall become exercisable
     in full beginning on the first anniversary of the grant of such Option,
     provided in each case that the Outside Director shall have maintained
     Continuous Service as a Director throughout such 12-month period.

          (c) the Option shall be exercisable only while the Outside Director
     serves as an Outside Director of the Company, and for a period of twelve
     (12) months after ceasing to be an Outside Director pursuant to Section
     10(b) hereof.

          (d) the exercise price per Share shall be 100% of the fair market
     value per Share on the date of grant of the Option, as determined in
     accordance with Section 9(a) hereof.

          (e) the effectiveness of any Options granted hereunder is conditioned
     upon shareholder approval of the Plan in accordance with Rule 16b-3
     promulgated under the Exchange Act.

     6.   Administration of and Grants of Options under the Plan.
          ------------------------------------------------------

          (a) Administration.  Except as otherwise required herein, the Plan
              --------------
     shall be

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     administered by the Board or a Committee.

          (b) Powers of the Board or Committee.  Subject to the provisions and
              --------------------------------
     restrictions of the Plan, the Board or Committee shall have the authority,
     in its discretion: (i) to determine, upon review of relevant information
     and in accordance with Section 9(a) hereof, the fair market value of the
     Common Stock; (ii) to interpret the Plan; (iii) to prescribe, amend and
     rescind rules and regulations relating to the Plan; (iv) to authorize any
     person to execute on behalf of the Company any instrument required to
     effectuate the grant of an Option hereunder; and (v) to make all other
     determinations deemed necessary or advisable for the administration of the
     Plan.  On a case by case basis, the Board or Committee, in its sole
     discretion, may: (i) accelerate the schedule of the time or times when an
     Option granted under the Plan may be exercised; and (ii) extend the
     duration of any Option granted under the Plan.

          (c) Effect of Board or Committee Decision.  All decisions,
              -------------------------------------
     determinations and interpretations of the Board or Committee shall be final
     and binding on all Optionees and any other holders of any Options granted
     under the Plan.

          (d) Suspension or Termination of Option.  If the Board or Committee
              -----------------------------------
     reasonably believes that an Optionee has committed an act of misconduct, it
     may suspend the Optionee's right to exercise any Option pending a
     determination by the Board or Committee (excluding the Outside Director
     accused of such misconduct).  If the Board or Committee (excluding the
     Outside Director accused of such misconduct) determines that an Optionee
     has committed an act of embezzlement, fraud, dishonesty, nonpayment of an
     obligation owed to the Company, breach of fiduciary duty or deliberate
     disregard of the Company's rules resulting in loss, damage or injury to the
     Company, or if an Optionee makes an unauthorized disclosure of any Company
     trade secret or confidential information, engages in any conduct
     constituting unfair competition with respect to the Company, or induces any
     party to breach a contract with the Company, neither the Optionee nor the
     Optionee's estate shall be entitled to exercise any Option whatsoever.  In
     making such determination, the Board or Committee (excluding the Outside
     Director accused of such misconduct) shall act fairly and shall give the
     Optionee an opportunity to appear and present evidence on the Optionee's
     behalf at a hearing before the Board or Committee.

          (e) Date of Grant of Options.  The date of grant of an Option shall,
              ------------------------
     for all purposes, be the date determined in accordance with Section 4
     hereof, notwithstanding the fact that an Optionee may not have entered into
     an option agreement with the Company on such date.  Notice of the grant of
     an Option shall be given to the Optionee within a reasonable time after the
     date of such grant.

     7.   Eligibility.  Options may be granted only to Outside Directors.  All
          -----------
options shall be automatically granted in accordance with the terms set forth in
Section 4 hereof.  The Plan shall not confer upon any Optionee any right with
respect to continuation of service as a Director or nomination to serve as a
Director, nor shall it interfere in any way with any rights which a Director

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or the Company may have to terminate such Director's directorship at any time.

     8.  Term of Plan.  The effective date of this Plan is October 1, 1996, the
         ------------
date upon which it was adopted by the Board.  The Plan shall continue in effect
for a term of ten (10) years unless terminated sooner under Section 14 hereof.

     9.  Fair Market Value and Form of Consideration.
         -------------------------------------------

         (a) Fair Market Value.  The fair market value per share shall be
             -----------------
     determined as follows:

             (i)   if the Common Stock is listed on a national securities
         exchange or admitted to unlisted trading privileges on such exchange,
         the fair market value on any given day shall be the closing sale price
         for the Common Stock on such day, as reported in the Wall Street
         Journal or other newspaper of general circulation;

             (ii)  if the Common Stock is not listed on a national securities
         exchange, the fair market value on any given day shall be the closing
         sale price for the Common Stock on the NASDAQ National Market System on
         such day, as reported in the Wall Street Journal or other newspaper of
         general circulation;

             (iii) if the Common Stock is not listed on a national securities
         exchange, is not admitted to unlisted trading privileges on any such
         exchange, and is not eligible for inclusion on the NASDAQ National
         Market System, the fair market value on any given day shall be the
         average of the closing representative bid and ask prices on such day,
         as reported on the NASDAQ System, and if not reported on such system,
         then as reported by the National Quotation Bureau, Inc. or such other
         publicly available compilation of the bid and asked prices of the
         Common Stock in any over-the-counter market on which the Common Stock
         is traded; or

             (iv)  if there exists no public trading market for the Common
         Stock, the fair market value on any given day shall be an amount
         determined by the Board or Committee in such manner as it may
         reasonably determine in its discretion, provided that such amount shall
         not be less than the book value per share as reasonably determined by
         the Board or Committee as of the date of determination nor less than
         the par value of the Stock.

         (b) Form of Consideration.  The consideration to be paid for the
             ---------------------
     Shares to be issued upon exercise of an Option shall consist entirely of
     cash or such other form of consideration as the Board or Committee may
     determine, in its sole discretion, to be appropriate for payment, including
     but not limited to other shares of Common Stock having a fair market value
     on the date of surrender equal to the aggregate exercise price of the
     Shares as to which the Option is exercised, or any combination of such
     methods of payment.

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     10.  Exercise of Option.
          ------------------

          (a) Procedure for Exercise; Rights as a Shareholder.  Any Option
              -----------------------------------------------
     granted hereunder shall be exercisable at such times as are set forth in
     Section 5 hereof.  An Option may not be exercised for a fraction of a
     Share.

          An Option shall be deemed to be exercised when written notice of such
     exercise has been given to the Company in accordance with the terms of the
     Option by the person entitled to exercise the Option and full payment for
     the Shares with respect to which the Option may be exercised has been
     received by the Company.  Full payment may consist of any consideration and
     method of payment allowable under Section 9(b) hereof.  Until the issuance
     (as evidenced by the appropriate entry on the books of the Company or of a
     duly authorized transfer agent of the Company) of the stock certificate
     evidencing such Shares, no right to vote or receive dividends or any other
     rights as a shareholder shall exist with respect to the Optioned Stock,
     notwithstanding the exercise of the Option.  A certificate for the number
     of Shares so acquired shall be issued to the Optionee as soon as
     practicable after exercise of the Option. No adjustment will be made for a
     dividend or other right for which the record date is prior to the date the
     certificate is issued, except as provided in Section 12 hereof.

          Exercise of an Option in any manner shall result in a decrease in the
     number of Shares which thereafter may be available, both for purposes of
     the Plan and for sale under the Option, by the number of Shares as to which
     the Option was exercised.

          (b) Termination of Status as a Director.  If an Optionee ceases to
              -----------------------------------
     serve as a Director, the Optionee may, but only within twelve (12) months
     after the date the Optionee ceases to be an Outside Director of the
     Company, exercise his or her Option to the extent the Optionee was entitled
     to exercise it at the date of such termination.  To the extent that the
     Optionee was not entitled to exercise an Option at the date of such
     termination, or if the Optionee does not exercise such Option within the
     time specified herein, the Option shall terminate.

          (c) Death of Optionee.  In the event of the death of an Optionee
              -----------------
     occurring:

              (i)  during the term of the Option, and provided that the Optionee
          was at the time of death a Director of the Company and had been in
          Continuous Service as a Director since the date of grant of the
          Option, the Option may be exercised, at any time within twelve (12)
          months following the date of death, by the Optionee's estate or by a
          person who acquired the right to exercise the Option by bequest or
          inheritance, but only to the extent of the right to exercise that
          would have accrued had the Optionee continued living and remained in
          Continuous Service a Director for twelve (12) months after the date of
          death; or

              (ii) within thirty (30) days after the termination of Continuous
          Service as

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<PAGE>

          a Director, the Option may be exercised, at any time within six (6)
          months following the date of death, by the Optionee's estate or by a
          person who acquired the right to exercise the Option by bequest or
          inheritance, but only to the extent of the right to exercise that had
          accrued at the date of termination of Continuous Service as a
          Director.

     11.  Non-Transferability of Options.  The Option may not be sold, pledged,
          ------------------------------
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.

     12.  Adjustments Upon Changes in Capitalization.  The number of Shares of
          ------------------------------------------
Common Stock covered by each outstanding Option, and the number of Shares of
Common Stock which have been authorized for issuance under the Plan but as to
which Options have not yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per Share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued and outstanding
Shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive.  Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, or options or rights to purchase shares of stock of any class
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.

     13.  Change in Control.
          -----------------

          (a) Notwithstanding any other provision of the Plan to the contrary,
     in the event of a Change in Control (as defined in Section 13(b)), any
     Options outstanding as of the date such Change in Control is determined to
     have occurred and not then exercisable and vested shall become fully
     exercisable and vested in the fullest extent of the original grant.

          (b) For purposes of the Plan, a "Change in Control" shall mean the
     happening of any of the following events:

              (i) The acquisition by any individual, entity or group (within
          the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act
          (collectively, a "Person") of beneficial ownership (within the meaning
          of Rule 13d-3 promulgated under the Exchange Act) of thirty percent
          (30%) or more of either (1) the then outstanding shares of Common
          Stock of the Company, or (2) the combined voting power of the then
          outstanding voting securities of the Company entitled to vote
          generally in the election of directors; provided, however, that the
          following acquisitions shall not

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          constitute a Change in Control: (A) any acquisition directly from the
          Company; (B) any acquisition by the Company; (C) any acquisition by a
          Person including the participant or with whom or with which the
          participant is affiliated; (D) any acquisition by a Person or Persons,
          one or more of which is a member of the Board or an officer of the
          Company or an affiliate of any of the foregoing on the effective date
          of the Change in Control, (E) any acquisition by any employee benefit
          plan (or related trust) sponsored or maintained by the Company or any
          corporation controlled by the Company; or (F) any acquisition by any
          corporation pursuant to a transaction described in clauses (1), (2)
          and (3) of paragraph (iii) of this Section 13(b); or

               (ii)  During any period of twenty-four (24) consecutive months,
          individuals who, as of the beginning of such period, constituted the
          entire Board cease for any reason to constitute at least a majority of
          the Board, unless the election, or nomination for election, by the
          Company's shareholders of each new director was approved by a vote of
          at least two-thirds (2/3rds) of the Continuing Directors, as
          hereinafter defined, in office on the date of such election or
          nomination for election for the new director.  For purposes hereof,
          "Continuing Director" shall mean:

                     (a) any member of the Board at the close of business on the
               effective date of the Change in Control; or

                     (b) any member of the Board who succeeded any Continuing
               Director described in clause (a) above if such successor's
               election, or nomination for election, by the Company's
               shareholders, was approved by a vote of at least two-thirds
               (2/3rds) of the Continuing Directors then still in office.  The
               term "Continuing Director" shall not, however, include any
               individual whose initial assumption to office occurs as a result
               of either an actual or threatened election contest (as such term
               is used in Rule 14a-11 of Regulation 14A of the Exchange Act) or
               other actual or threatened solicitation of proxies or consents by
               or on behalf of a person other than the Board.

               (iii) Approval by the shareholders of the Company of a
          reorganization, merger or consolidation, in each case, unless,
          following such reorganization, merger or consolidation, (1) more than
          sixty percent (60%) of the then outstanding securities having the
          right to vote in the election of directors of the corporation
          resulting from such reorganization, merger or consolidation is then
          beneficially owned, directly or indirectly, by all or substantially
          all of the individuals and entities who were the beneficial owners of
          the outstanding securities having the right to vote in the

                                       8
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          election of Directors of the Company immediately prior to such
          reorganization, merger or consolidation, (2) no Person (excluding the
          Company, any employee benefit plan (or related trust) of the Company
          or such corporation resulting from such reorganization, merger or
          consolidation and any Person beneficially owning, immediately prior to
          such reorganization, merger or consolidation, directly or indirectly,
          thirty percent (30%) or more of the then outstanding securities having
          the right to vote in the election of Directors of the Company)
          beneficially owns, directly or indirectly, thirty percent (30%) or
          more of the then outstanding securities having the right to vote in
          the election of the directors of the corporation resulting from such
          reorganization, merger or consolidation, and (3) at least a majority
          of the members of the Board of the corporation resulting from such
          reorganization, merger or consolidation are Continuing Directors at
          the time of the execution of the initial agreement providing for such
          reorganization, merger or consolidation; or

               (iv) Approval by the shareholders of the Company of (1) a
          complete liquidation or dissolution of the Company, or (2) the sale or
          other disposition of all or substantially all of the assets of the
          Company, other than to a corporation, with respect to which following
          such sale or other disposition, (A) more than sixty percent (60%) of
          the then outstanding securities having the right to vote in the
          election of directors of such corporation is then beneficially owned,
          directly or indirectly, by all or substantially all of the individuals
          and entities who were the beneficial owners of the outstanding
          securities having the right to vote in the election of Directors of
          the Company immediately prior to such sale or other disposition of
          such outstanding securities, (B) no Person (excluding the Company and
          any employee benefit plan (or related trust) of the Company or such
          corporation and any Person beneficially owning, immediately prior to
          such sale or other disposition, directly or indirectly, thirty percent
          (30%) or more of the outstanding securities having the right to vote
          in the election of Directors of the Company) beneficially owns,
          directly or indirectly, thirty percent (30%) or more of the then
          outstanding securities having the right to vote in the election of
          directors of such corporation and (C) at least a majority of the
          members of the board of directors of such corporation are Continuing
          Directors at the time of the execution of the initial agreement or
          action of the Board providing for such sale or other disposition of
          assets of the Company.

     14.  Amendment, Termination and Approval of the Plan.  The Board may at any
          -----------------------------------------------
time amend or terminate the Plan, except that the Board shall not amend the Plan
more than once every six (6) months with respect to the provisions of the Plan
relating to the amount, price, and timing of grants, other than to comply with
changes in the Code, the Employee Retirement Income Security Act of 1974, as
amended, or the regulations promulgated thereunder.  No Option may be granted
after the Plan is terminated.

          If any amendment to the Plan requires approval by the shareholders of
the Company for continued applicability of Rule 16b-3 promulgated under the
Exchange Act, or for initial or continued listing of the Common Stock or other
securities of the Company upon any stock exchange, then such amendment shall be
approved by the holders of a majority of the Company's outstanding capital stock
entitled to vote.

     15.  Conditions Upon Issuance of Shares.  Shares shall not be issued
          ----------------------------------
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without

                                       9
<PAGE>

limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules
and regulations promulgated thereunder, state securities laws, and the
requirements of the NASD or any stock exchange upon which the Shares may then be
listed, and shall be further subject to the approval of counsel for the Company
with respect to such compliance.

          As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares, if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.  Such Shares may also be issued
with appropriate legends on stock certificates representing such Shares, and the
Company may place stop transfer orders with respect to such Shares.

          Inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.

     16.  Reservation of Shares.  The Company, during the term of this Plan,
          ---------------------
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

     17.  Option Agreement.  Options shall be evidenced by written option
          ----------------
agreements in such other form as the Board or Committee shall approve.

     18.  Information to Optionees.  The Company shall provide to each Optionee,
          ------------------------
during the period for which such Optionee has one or more Options outstanding,
copies of all annual reports and other information which are provided to all
shareholders of the Company.

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