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                                                                   EXHIBIT 10.16

                                  PEMSTAR INC.
                             2000 STOCK OPTION PLAN


     1. Purpose of the Plan.

     This Plan shall be known as the "PEMSTAR INC. 2000 Stock Option Plan" and
is hereinafter referred to as the "Plan." The purpose of the Plan is to aid in
maintaining and developing personnel capable of assuring the future success of
PEMSTAR INC., a Minnesota corporation (the "Company"), to offer such personnel
additional incentives to put forth maximum efforts for the success of the
business, and to afford them an opportunity to acquire a proprietary interest in
the Company through stock options as provided herein. Options granted under this
Plan may be either incentive stock options ("Incentive Stock Options") within
the meaning of section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or options which do not qualify as Incentive Stock Options.

     2. Stock Subject to the Plan.

     Subject to the provisions of section 12, the shares of stock to be subject
to options under the Plan shall be shares of the Company's authorized common
stock. Such shares may be either authorized but unissued shares, or issued
shares which have been reacquired by the Company. Subject to the adjustment as
provided in section 12, the maximum number of shares on which options may be
exercised under this Plan shall be Five Hundred Thousand Shares (500,000)
shares. If an option under the Plan expires, or for any reason is terminated or
unexercised with respect to any shares, such shares shall again be available for
options thereafter granted during the term of the Plan.

     3. Administration of Plan.

     (a) The Plan shall be administered by the Board of Directors of the Company
or a committee of three or more directors of the Company. The members of such
committee shall be appointed by and serve at the pleasure of the Board of
Directors. The group administering the Plan shall be referred to herein as the
"Committee."

     (b) The Committee shall have plenary authority in its discretion, but
subject to the express provisions of this Plan, (i) to determine the purchase
price of the common shares covered by each option, (ii) to determine the
employees to whom and the time or times at which such options shall be granted
and the number of shares to be subject to each option, (iii) to determine the
terms of exercise of each option, (iv) to accelerate the time at which all or
any part of an option may be exercised, (v) to amend or modify the terms of any
option with the consent of the optionee, (vi) to interpret the Plan, (vii) to
prescribe, amend and rescind rules and regulations relating to the Plan, (viii)
to determine the terms and provisions of each option agreement under this Plan
(which agreements need not be identical), including the designation of those
options intended to be Incentive Stock Options, and
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(ix) to make all other determinations necessary or advisable for the
administration of the Plan, subject to the exclusive authority of the Board of
Directors under section 13 to amend or terminate the Plan. The Committee's
determinations on the foregoing matters, unless otherwise disapproved by the
Board of Directors of the Company, shall be final and conclusive.

     (c) The Committee shall select one of its members as its Chairman and shall
hold its meetings at such times and places as it may determine. A majority of
its members shall constitute a quorum. All determinations of the Committee shall
be made by not less than a majority of its members. Any decision or
determination that is set forth in a written document and signed by all of the
members of the Committee shall be fully effective as if it had been made by a
majority vote at a meeting duly called and held. The granting of an option
pursuant to the Plan shall be effective only if a written agreement shall have
been duly executed and delivered by and on behalf of the Company and the
employee to whom such right is granted. The Committee may appoint a Secretary
and may make such rules and regulations for the conduct of its business as it
shall deem advisable.

     (d) The Committee shall, to the extent necessary or desirable, establish
any special rules for employees located in any country other than the United
States. Such rules shall be set forth in Appendices to the Plan, which shall be
deemed incorporated into and form part of the Plan. Such rules may not change
the maximum number of shares on which options may be exercised under the Plan or
the eligibility rules set forth in Section 4.

     4. Eligibility.

     Incentive Stock Options may only be granted under this Plan to any full or
part-time employee (which term as used herein includes, but is not limited to,
officers and directors who are also employees) of the Company and of its present
and future subsidiary corporations (herein called "subsidiaries"). Members of
the Board of Directors of the Company, consultants or independent contractors
providing valuable services to the Company or one of its subsidiaries who are
not also employees thereof shall be eligible to receive options which do not
qualify as Incentive Stock Options. In determining the persons to whom options
shall be granted and the number of shares subject to each option, the Committee
may take into account the nature of services rendered by the respective
employees, their present and potential contributions to the success of the
Company and such other factors as the Committee in its discretion shall deem
relevant. A person who has been granted an option under the Plan may be granted
an additional option or options under the Plan if the Committee shall so
determine; provided, however, that to the extent the aggregate fair market value
(determined at the time the Incentive Stock Option is granted) of the stock with
respect to which all Incentive Stock Options are exercisable for the first time
by an employee during any calendar year (under all plans described in section
422 of the Code of his employer corporation and its parent and subsidiary
corporations described in section 424(e) or 424(f) of the Code) exceeds
$100,000, such options shall be treated as options which do not qualify as
Incentive Stock Options.

     5. Price.

     The option price for all Incentive Stock Options granted under the Plan
shall be determined by the Committee but shall not be less than 100% of the fair
market value of shares of the Company's common stock at the date of granting of
such option. The option price for options granted

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under the Plan which do not qualify as Incentive Stock Options shall also be
determined by the Committee. For purposes of the preceding sentence and for all
other valuation purposes under the Plan, the fair market value of the Company's
common stock shall be as reasonably determined by the Committee. If on the date
of grant of any option granted under the Plan, the common stock of the Company
is not publicly traded, the Committee shall make a good faith attempt to satisfy
the option price requirement of this section 5 and in connection therewith shall
take such action as it deems necessary or advisable.

     6. Term.

     Each option and all rights and obligations thereunder shall, subject to the
provisions of section 9, expire on the date determined by the Committee and
specified in the option agreement. The Committee shall be under no duty to
provide terms of like duration for options granted under the Plan, but the term
of an Incentive Stock Option may not extend more than ten (10) years from the
date of granting of such option and the term of options granted under the Plan
which do not qualify as Incentive Stock Options may not extend more than fifteen
(15) years from the date of granting of such option.

     7. Exercise of Option.

     (a) The Committee shall have full and complete authority to determine,
subject to section 9, whether the option will be exercisable in full at any time
or from time to time during the term of the option, or to provide for the
exercise thereof in such installments, upon the occurrence of such events and at
such times during the term of the option as the Committee may determine.

     (b) The exercise of any option granted hereunder shall only be effective at
such time that the sale of common stock pursuant to such exercise will not
violate any state or federal securities or other laws.

     (c) An optionee electing to exercise an option shall give written notice to
the Company of such election and of the number of shares subject to such
exercise. The full purchase price of such shares shall be tendered with such
notice of exercise. Payment shall be made to the Company either in cash
(including check, bank draft or money order), or, at the discretion of the
Committee, (i) by delivering certificates for shares of the Company's common
stock already owned by the optionee having a fair market value equal to the full
purchase price of the shares, or (ii) a combination of cash and such shares, or
(iii) by delivering the optionee's full recourse promissory note, which shall
provide for interest at a rate not less than the minimum rate required to avoid
imputation of income, original issue discount or a below-market-rate loan
pursuant to sections 483, 1274 or 7872 of the Code or any successor provisions
thereto; provided, however, that an optionee shall not be entitled to tender
shares of the Company's common stock pursuant to successive, substantially
simultaneous exercises of options granted under this or any other stock option
plan of the Company. The fair market

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value of such shares shall be determined as provided in section 5. Until such
person has been issued a certificate or certificates for the shares subject to
such exercise, he shall possess no rights as a stockholder with respect to such
shares.

     8. Additional Restrictions.

     The Committee shall have full and complete authority to determine whether
all or any part of the shares of common stock of the Company acquired upon
exercise of any of the options granted under the Plan shall be subject to
restrictions on the transferability thereof or any other restrictions affecting
in any manner the optionee's rights with respect thereto, but any such
restriction shall be contained in the agreement relating to such options.

     9. Effect of Termination of Employment or Death.

     (a) In the event that an optionee shall cease to be employed by the Company
or its subsidiaries, if any, for any reason other than his gross and willful
misconduct or his death or disability as set forth in section 9(c), such
optionee shall have the right to exercise the option at any time within three
months after such termination of employment to the extent of the full number of
shares he was entitled to purchase under the option on the date of termination,
subject to the condition that no option shall be exercisable after the
expiration of the term of the option.

     (b) In the event that an optionee shall cease to be employed by the Company
or its subsidiaries, if any, by reason of his gross and willful misconduct
during the course of his employment, including but not limited to wrongful
appropriation of funds of his employer or the commission of a gross misdemeanor
or felony, the option shall be terminated as of the date of the misconduct.

     (c) If the optionee shall die while in the employ of the Company or a
subsidiary, if any, or within three months after termination of employment for
any reason other than gross and willful misconduct, or the optionee's employment
is terminated because optionee has become disabled (within the meaning of Code
section 22(e)(3)) while in the employ of the Company or a subsidiary, if any,
and such optionee shall not have fully exercised the option, such option may be
exercised at any time within twelve months after his death or the date of such
disability by the optionee or the personal representatives of the optionee, as
applicable, or by any person or persons to whom the option is transferred by
will or the applicable laws of descent and distribution, to the extent of the
full number of shares he was entitled to purchase under the option on the date
of death (or termination of employment, if earlier) and subject to the condition
that no option shall be exercisable after the expiration of the term of the
option.

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     (d) Nothing in the Plan or in any agreement thereunder shall confer on any
employee any right to continue in the employ of the Company or any of its
subsidiaries or affect, in any way, the right of the Company or any of its
subsidiaries to terminate his employment at any time.

     10. Ten Percent Shareholder Rule.

     Notwithstanding any other provision in the Plan, if at the time an option
is otherwise to be granted pursuant to the Plan the optionee owns directly or
indirectly (within the meaning of section 424(d) of the Code) shares of common
stock of the Company possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or its parent or
subsidiary corporations (within the meaning of section 424(e) or 424(f) of the
Code), if any, then any Incentive Stock Option to be granted to such optionee
pursuant to the Plan shall satisfy the requirements of section 422(c)(7) of the
Code, the option price shall be not less than 110% of the fair market value of
the common stock of the Company determined as described herein, and such option
by its terms shall not be exercisable after the expiration of five (5) years
from the date such option is granted.

     11. Non-Transferability.

     No option granted under the Plan shall be transferable by an optionee,
otherwise than by will or the laws of descent or distribution as provided in
section 9(c). During the lifetime of an optionee the option shall be exercisable
only by such optionee.

     12. Dilution or Other Adjustments.

     If there shall be any change in the shares of the Company's common stock
through merger, consolidation, reorganization, recapitalization, stock dividend
(of whatever amount), stock split or other change in the corporate structure,
appropriate adjustments in the Plan and outstanding options shall be made by the
Committee. In the event of any such changes, adjustments shall include, where
appropriate, changes in the aggregate number of shares subject to the Plan, the
number of shares and the price per share subject to outstanding options, in
order to prevent dilution or enlargement of option rights.

     13. Amendment or Discontinuance of Plan.

     The Board of Directors may amend or discontinue the Plan at any time.
However, no amendment of the Plan shall, without stockholder approval: (i)
increase the maximum number of shares under the Plan as provided in section 2,
(ii) decrease the minimum option price provided in section 5, (iii) extend the
maximum option term under section 6, or (iv) materially modify the eligibility

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requirements for participation in the Plan. The Board of Directors shall not
alter or impair any option theretofore granted under the Plan without the
consent of the holder of the option.

     14. Time of Granting.

     Nothing contained in the Plan or in any resolution adopted or to be adopted
by the Board of Directors or by the stockholders of the Company, and no action
taken by the Committee or the Board of Directors (other than the execution and
delivery of an option) shall constitute the granting of an option hereunder.

     15. No Guaranty of Continued Service or Future Benefits.

     (a) Nothing in the Plan or in any agreement hereunder shall confer on any
employee, director, consultant or independent contractor any right to continue
in the employ or service of the Company or any of its subsidiaries or affect in
any way the right of the Company or any of its subsidiaries to terminate any
such person's employment or other services at any time.

     (b) Options shall be granted under the Plan in the sole discretion of the
Board of Directors or the Committee and will not form part of the recipient's
salary or be used in calculating severance benefits or entitle the recipient to
similar option grants in the future.

     16. Effective Date and Termination of Plan.

     (a) The Plan was approved by the Board of Directors on March 14, 2000, and
shall be approved by the shareholders of the Company within twelve (12) months
thereof.

     (b) Unless the Plan shall have been discontinued as provided in section 13,
the Plan shall terminate March 14, 2010. No option may be granted after such
termination, but termination of the Plan shall not, without the consent of the
optionee, alter or impair any rights or obligations under any option theretofore
granted.

     17.  Income Tax; Withholding; Tax Bonuses.

     (a) Persons receiving Options under the Plan ("optionees") are responsible
for the payment of all income taxes, employment, social insurance, welfare and
other taxes under applicable law relating to any amounts deemed under the laws
of the country of their residency or of the organization of the subsidiary which
employs them to constitute income arising out of the Plan, the grant of options
under the Plan and the purchase and sale of shares of Common Stock pursuant to
the Plan.

     (b) Withholding. In order to comply with all applicable domestic or foreign
income tax laws or regulations, the Company may take such action as it deems
appropriate to ensure that all applicable federal, state or local payroll,
withholding, income or other taxes, which are the sole and absolute
responsibility of the optionee under the Plan, are withheld or collected from
such optionee. In order to assist the optionee in paying all or a portion of the
federal, state or local taxes to be withheld or collected upon exercise or
receipt of (or the lapse of restrictions relating to) an option, the Committee,
in its discretion and subject to such additional terms and conditions as it may
adopt, may permit the optionee to satisfy such tax obligation by (i) electing to
have the Company withhold a portion of the Shares otherwise to be delivered upon
exercise or receipt of (or the lapse of restrictions relating to) such option
with a fair market value equal to the amount of such taxes, or (ii) delivering
to the Company shares of Common Stock other than Shares issuable upon exercise
or receipt of (or the lapse of restrictions relating to) such option with a fair
market value equal to the amount of such taxes. The fair market value of shares
of Common Stock shall be determined in accordance with Section 5. The election,
if any, must be made on or before the date that the amount of tax to be withheld
is determined.

    (c) Tax Bonuses. The Committee, in its discretion, shall have the authority,
at the time of grant of any option under this Plan or at any time thereafter, to
approve cash bonuses to designated optionees to be paid upon their exercise or
receipt of (or the lapse of restrictions relating to) the option in order to
provide funds to pay all or a portion of federal, state or local taxes due as a
result of such exercise or receipt (or the lapse of such restrictions). The
Committee shall have full authority in its discretion to determine the amount of
any such tax bonus.

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