Document:

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                                                                   Exhibit 10.06

[The following is the form of Nonstatutory Stock Option Agreement between the
registrant and each of Jerry M. Baker and Keith Jackson. Information as to which
the agreements of Mr. Baker and Mr. Jackson differ is set forth in brackets, as
applicable.]

                   FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC.
                        2000 EXECUTIVE STOCK OPTION PLAN

                       NONSTATUTORY STOCK OPTION AGREEMENT

        Fairchild Semiconductor International, Inc., a Delaware corporation (the
"Company"), hereby grants an Option to purchase shares of its Class A Common
Stock, par value $.01 per share (the "Shares"), to the Optionee named below. The
terms and conditions of the Option are set forth in this cover sheet, in the
attachment and in the Company's 2000 Executive Stock Option Plan (the "Plan").

Date of Option Grant:                   May 16, 2000

Name of Optionee:                       [Jerry M. Baker][Keith Jackson]

Number of Shares Covered by Option:     [317,461 for Mr. Baker; 158,731 for
                                        Mr. Jackson]

Exercise Price per Share:               $42.75

Vesting Start Date:                     April 5, 2000

Vesting Schedule:

        Subject to all the terms of the attached Agreement, your right to
purchase Shares under this Option vests in full on the five-year anniversary of
the Vesting Start Date, or earlier as follows: 20% of the Option shall vest at
the time the Share price reaches or exceeds $55.00 on each of any 20 trading
days during any period of 30 consecutive trading days; an additional 20% of the
Option shall vest at the time the Share price reaches or exceeds $64.00 on each
of any 20 trading days during any period of 30 consecutive trading days; an
additional 30% of the Option shall vest at the time the Share price reaches or
exceeds $77.00 on each of any 20 trading days during any period of 30
consecutive trading days; and the remaining 30% of the Option shall vest at the
time the Share price reaches or exceeds $90.00 on each of any 20 days during any
period of 30 consecutive trading days.

        BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED IN THE ATTACHED AGREEMENT AND IN THE PLAN, A COPY OF WHICH
IS ALSO ENCLOSED.

Optionee:
         ------------------------------------------------------------------
                                 (Signature)

Company:
         ------------------------------------------------------------------
                                 (Signature)

         Title:
                 ----------------------------------------------------------

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Attachment

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                   FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC.
                        2000 EXECUTIVE STOCK OPTION PLAN

                       NONSTATUTORY STOCK OPTION AGREEMENT

THE PLAN AND            The text of the Plan is incorporated in this Agreement
OTHER AGREEMENTS        by reference. Certain capitalized terms used in this
                        Agreement are defined in the Plan.

                        This Agreement and the Plan constitute the entire
                        understanding between you and the Company regarding this
                        Option. Any prior agreements, commitments or
                        negotiations concerning this Option are superseded.

NONSTATUTORY STOCK      This Option is not intended to be an Incentive Stock
OPTION                  Option under section 422 of the Internal Revenue Code
                        and will be interpreted accordingly.

VESTING                 This Option is only exercisable before it expires and
                        then only with respect to the vested portion of the
                        Option. This Option will vest according to the Vesting
                        Schedule on the attached cover sheet.

TERM                    Your Option will expire in any event at the close of
                        business at Company headquarters on the day before the
                        10th anniversary of the Date of Option Grant, as shown
                        on the cover sheet. Your Option may expire earlier if
                        your Service terminates, as described below.

TERMINATION OF SERVICE  If your Service with the Company terminates, you shall
                        immediately forfeit all rights to the unvested portion
                        of your Option, and your right (or the right of your
                        estate, executor or representative) to exercise the
                        vested portion of your Option after termination shall be
                        governed by the terms of the Company's Employee Stock
                        Option Plan as if the Option had been granted under that
                        plan.

CHANGE IN CONTROL       In the event that you are employed by the Company at the
                        time of a Change in Control, as defined below, your
                        Option shall fully vest upon the effective date of the
                        Change in Control, unless the Change in Control is
                        initiated by the Company and you remain employed by the
                        successor corporation in a position of equal rank and
                        responsibility to your position in the Company on the
                        Date of Option Grant.

                        "Change in Control" means the occurrence of any of the
                        following events:

                        (i) Any "person" (as such term is used in Sections 13(d)
                        and 14(d) of the Exchange Act), other than (x) Sterling
                        Holding Company, LLC and/or Citicorp Venture Capital
                        Ltd. (either, for purposes of this definition, "CVC"),
                        (y) any officer, employee or director of CVC or any
                        trust, partnership or other entity established solely
                        for the benefit

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                        of such officers, employees or directors or (z) any
                        officer, employee or director of the Company or any
                        subsidiary of the Company or any trust, partnership or
                        other entity established solely for the benefit of such
                        officers, employees or directors (any of such persons
                        identified in clauses (x), (y) and (z), a "Permitted
                        Holder"), is or becomes the beneficial owner (as such
                        term is defined in Rules 13d-3 and 13d-5 under the
                        Exchange Act), directly or indirectly, of more than 35%
                        of the total voting power of the voting stock of the
                        Company, provided, however, that the Permitted Holders
                        beneficially own (as defined above), directly or
                        indirectly, in the aggregate a lesser percentage of the
                        total voting power of the voting stock of the Company
                        than such other person and do not have the right or
                        ability by voting power, contract or otherwise to elect
                        or designate for election a majority of the board of
                        directors of the Company;

                        (ii) during any period of two consecutive years,
                        individuals who at the beginning of such period
                        constituted the board of directors of the Company
                        (together with any new directors whose election by such
                        board of directors or whose nomination for election by
                        the stockholders of the Company was approved by a vote
                        of a majority of the directors of the Company then still
                        in office who were either directors at the beginning of
                        such period or whose election or nomination for election
                        was previously so approved) cease for any reason to
                        constitute a majority of the board of directors of the
                        Company then in office; or

                        (iii) the merger or consolidation of the Company with or
                        into another corporation or entity or the merger of
                        another corporation or entity with or into the Company,
                        or the sale of all or substantially all the assets of
                        the Company to another corporation or entity (in any of
                        such cases, other than a corporation or entity that
                        prior to such merger, consolidation or sale is
                        controlled by Permitted Holders), if the securities of
                        the Company that are outstanding immediately prior to
                        such transaction and which represent 100% of the
                        aggregate voting power of the voting stock of the
                        Company are changed into or exchanged for cash,
                        securities or property, unless pursuant to such
                        transaction such securities are changed into or
                        exchanged for, in addition to any other consideration,
                        securities of the surviving corporation or entity or
                        transferee that represent, immediately after such
                        transaction, at least a majority of the aggregate voting
                        power of the voting stock of the surviving corporation,
                        entity or transferee.

LEAVES OF ABSENCE       For purposes of this Option, your Service does not
                        terminate when you go on a bona fide leave of absence
                        that was approved by the Company in writing, if the
                        terms of the leave provide for continued Service
                        crediting, or when continued Service crediting is
                        required by applicable law. Your Service terminates in
                        any event when the approved leave ends unless you
                        immediately return to active work.

                        The Company determines which leaves count for this
                        purpose, and when

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                        your Service terminates for all purposes under the Plan.

NOTICE OF EXERCISE      When you wish to exercise this Option, you must notify
                        the Company by filing the proper "Notice of Exercise"
                        form at the address given on the form. Your notice must
                        specify how many Shares you wish to purchase. Your
                        notice must also specify how your Shares should be
                        registered (in your name only or in your and your
                        spouse's names as community property or as joint tenants
                        with right of survivorship). The notice will be
                        effective when it is received by the Company.

                        If someone else wants to exercise this Option after your
                        death, that person must prove to the Company's
                        satisfaction that he or she is entitled to do so.

FORM OF PAYMENT         When you submit your notice of exercise, you must
                        include payment of the Option price for the Shares you
                        are purchasing.

                        Payment may be made in one (or a combination) of the
                        following forms:

                        *    Your personal check, a cashier's check or a
                             money order.

                        *    Shares which have already been owned by you for
                             more than six months and which are surrendered
                             to the Company. The value of the Shares,
                             determined as of the effective date of the
                             Option exercise, will be applied to the Option
                             price.

                        *    By delivery (on a form prescribed by the
                             Company) of an irrevocable direction to a
                             securities broker to sell Shares and to deliver
                             all or part of the sale proceeds to the Company
                             in payment of the aggregate exercise price.

WITHHOLDING TAXES       You will not be allowed to exercise this Option unless
                        you make acceptable arrangements to pay any withholding
                        or other taxes that may be due as a result of the Option
                        exercise or sale of Shares acquired under this Option.

RESTRICTIONS ON         By signing this Agreement, you agree not to exercise
EXERCISE AND RESALE     this Option or sell any Shares acquired under this
                        Option at a time when applicable laws, regulations or
                        Company trading policies prohibit exercise, sale or
                        issuance of Shares. The Company will not permit you to
                        exercise this Option if the issuance of Shares at that
                        time would violate any law or regulation. The Company
                        shall have the right to designate one or more periods of
                        time, each of which shall not exceed one hundred eighty
                        (180) days in length, during which this Option shall not
                        be exercisable if the Company determines (in its sole
                        discretion) that such limitation on exercise could in
                        any way facilitate a lessening of any restriction on
                        transfer pursuant to the Securities Act or any state
                        securities laws with respect to any issuance of
                        securities by the Company, facilitate the registration
                        or qualification of any securities by the Company under
                        the Securities Act or any state securities laws,

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                        or facilitate the perfection of any exemption from the
                        registration or qualification requirements of the
                        Securities Act or any applicable state securities laws
                        for the issuance or transfer of any securities. Such
                        limitation on exercise shall not alter the vesting
                        schedule set forth in this Agreement other than to limit
                        the periods during which this Option shall be
                        exercisable.

                        If the sale of Shares under the Plan is not registered
                        under the Securities Act, but an exemption is available
                        which requires an investment or other representation,
                        you shall represent and agree at the time of exercise
                        that the Shares being acquired upon exercise of this
                        Option are being acquired for investment, and not with a
                        view to the sale or distribution thereof, and shall make
                        such other representations as are deemed necessary or
                        appropriate by the Company and its counsel.

TRANSFER OF OPTION      You shall not assign, alienate, pledge, attach, sell,
                        transfer or encumber this Option. If you attempt to do
                        any of these things, this Option will immediately become
                        invalid. You may, however, dispose of this Option in
                        your will or it may be transferred by the laws of
                        descent and distribution.

                        Notwithstanding the preceding paragraph, if the Company
                        consents, you may transfer this Option, by gift, to a
                        Family Member. For purposes of this section, "Family
                        Member" is defined to include any child, stepchild,
                        grandchild, parent, stepparent, grandparent, spouse,
                        former spouse, sibling, niece, nephew, mother-in-law,
                        father-in-law, son-in-law, daughter-in-law,
                        brother-in-law, or sister-in-law, including adoptive
                        relationships, any person sharing your household (other
                        than a tenant or employee), a trust in which these
                        persons have more than fifty percent of the beneficial
                        interest, a foundation in which these persons (or you)
                        control the management of assets, and any other entity
                        in which these persons (or you) own more than fifty
                        percent of the voting interests. A Family Member
                        transferee is hereafter referred to as a "Permitted
                        Transferee." Before any such transfer of this Option is
                        effectuated, however, the Company must be notified in
                        advance in writing of the terms and conditions of the
                        proposed transfer and the Company must determine that
                        the proposed transfer complies with applicable law and
                        the requirements of the Plan and this Option. Any
                        purported assignment, alienation, pledge, attachment,
                        sale, transfer or encumbrance that does not qualify
                        hereunder shall be void and unenforceable against the
                        Company.

                        The terms of this Option (including the post-termination
                        of Service exercise periods) shall apply to your
                        beneficiaries, executors, administrators and Permitted
                        Transferees (including the beneficiaries, executors and
                        administrators of the Permitted Transferees), including
                        the right to agree to any amendment of this Option,
                        except that Permitted Transferees shall not transfer
                        this Option other than by will or by the laws of descent
                        and distribution. The Company is under no obligation to
                        provide notice to a Permitted Transferee of your

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                        termination of Service.

                        This Option shall be exercised only by you (including,
                        in the case of a transferred Option, by a Permitted
                        Transferee), or, in the case of your death, by your
                        executor or administrator (including, in the case of a
                        transferred Option, by the executor or administrator of
                        the Permitted Transferee). Before a Permitted Transferee
                        will be allowed to exercise this option, you must make
                        acceptable arrangements to pay any withholding or other
                        taxes that may be due as a result of exercising this
                        option.

                        Regardless of any marital property settlement agreement,
                        the Company is not obligated to honor a notice of
                        exercise from your spouse, nor is the Company obligated
                        to recognize your spouse's interest in your Option in
                        any other way.

RETENTION RIGHTS        Your Option or this Agreement does not give you the
                        right to be retained by the Company (or any Parent or
                        any Subsidiaries or Affiliates) in any capacity. The
                        Company (or any Parent and any Subsidiaries or
                        Affiliates) reserve the right to terminate your Service
                        at any time.

STOCKHOLDER RIGHTS      You, or your estate or heirs, have no rights as a
                        stockholder of the Company until a certificate for your
                        Option's Shares has been issued. No adjustments are made
                        for dividends or other rights if the applicable record
                        date occurs before your stock certificate is issued,
                        except as described in the Plan.

ADJUSTMENTS             In the event of a stock split, a stock dividend or a
                        similar change in the Company stock, the number of
                        Shares covered by this Option and the exercise price per
                        Share may be adjusted (and rounded down to the nearest
                        whole number) pursuant to the Plan. Your Option shall be
                        subject to the terms of the agreement of merger,
                        liquidation or reorganization in the event the Company
                        is subject to such corporate activity.

APPLICABLE LAW          This Agreement will be interpreted and enforced under
                        the laws of the State of Maine.

              BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF
              THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

                                       7<PAGE>   1

                                                                   Exhibit 10.07

                   FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC.

                             2000 STOCK OPTION PLAN

1.   TITLE OF PLAN

     The title of this plan is the Fairchild Semiconductor International, Inc.
2000 Stock Option Plan, hereinafter referred to as the "Plan."

2.   PURPOSE

     The Plan is intended to align the interests of eligible key employees of
Fairchild Semiconductor International, Inc. (hereinafter called the "Company")
and its subsidiaries (as hereinafter defined) and of the non-employee directors
of the Company with the interests of the stockholders of the Company and to
provide incentives for such employees and non-employee directors to exert
maximum efforts for the success of the Company. By extending to key employees
and non-employee directors the opportunity to acquire proprietary interests in
the Company and to participate in its success, the Plan may be expected to
benefit the Company and its stockholders by making it possible for the Company
to attract and retain the best available talent and by rewarding key management
and technical personnel for their part in increasing the value of the Company's
shares. It is further intended that options granted pursuant to this Plan may be
incentive stock options under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), or may be options which are not incentive stock options
(hereinafter called "non-qualified stock options").

     The total number of shares of the Company's Class A Common Stock, par value
$.01 per share ("Stock"), available under the Plan is 5,178,623.

3.   STOCK SUBJECT TO THE PLAN

     There will be reserved for issue upon the exercise of options granted under
the Plan 5,178,623 shares of Stock, subject to adjustment as provided in
Paragraph 8, which may be unissued shares, reacquired shares, or shares bought
on the market. If any option that has been granted expires or terminates for any
reason without having been exercised in full, the unpurchased shares shall again
become available for the purposes of the Plan (unless the Plan shall have been
terminated).

4.   ADMINISTRATION

     The Plan shall be administered by a committee of the board of directors of
the Company (the "Committee"), consisting of two or more members of the board of
directors. The Committee shall be constituted to permit the Plan to comply with
(i) Rule l6b-3 promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"), and any successor rule and (ii) United States Treasury
regulations issued under Section 162(m) of the Code.

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     (a)  The Committee shall have the plenary power, subject to and within the
limits of the express provisions of the Plan:

          (i)  To determine from time to time which of the eligible persons
shall be granted options under the Plan; the time or times (during the term of
the option) within which all or portions of each option may be exercised and the
number of shares for which an option or options shall be granted to each of
them.

          (ii) To construe and interpret the Plan and options granted under it,
and to establish, amend and revoke rules and regulations for its administration.
The Committee, in the exercise of this power, shall generally determine all
questions of policy and expediency that may arise, may correct any defect, or
supply any omission or reconcile any inconsistency in the Plan or in any option
agreement in a manner and to the extent it shall deem necessary or expedient to
make the Plan fully effective.

          (iii) To prescribe the terms and provisions of each option granted
(which need not be identical).

          (iv) To determine whether options granted shall be incentive stock
options or non-qualified stock options.

          (v)  To establish sub-plans under the Plan pursuant to which specified
options shall be governed.

          (vi) To determine whether options granted shall be transferable
without consideration to immediate family members or family trusts for the
benefit of an optionee's immediate family members. As used herein, "immediate
family" means parents, spouses and children.

     (b)  The Committee shall not have the authority to grant new options in
exchange for the cancellation of stock options previously granted under the Plan
or under any other stock option plan of the Company.

5.   ELIGIBILITY

     Options may be granted only to regular salaried officers and key employees
of the Company and its subsidiaries and to members of the board of directors of
the Company who are not also employees of the Company. However, only employees
of the Company shall be eligible to receive incentive stock options. The term
"subsidiary" shall mean any company in which the Company controls, directly or
indirectly, 50% or more of the combined voting power of all classes of capital
stock.

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     The maximum number of shares of Stock that may be covered by an option to
any one eligible person shall be 200,000 shares during any calendar year,
subject to adjustment as provided in Paragraph 8.

6.   TERMS OF OPTION AND OPTION AGREEMENTS

     Each option shall be evidenced by a written Stock Option Agreement which
shall expressly identify the options as incentive stock options or as
non-qualified stock options, and be in such form and contain such provisions as
the Committee shall from time to time deem appropriate; provided, however, that
the grant of a non-qualified option pursuant to this Plan shall in no way be
construed to be an alternative to the right of an employee to purchase stock
pursuant to any incentive stock option heretofore or hereafter granted to an
employee pursuant to any stock option plans now in existence or hereafter
adopted by the Company. The terms of the option agreements need not be
identical, but each option agreement shall include, by appropriate language, or
be subject to, the substance of all of the applicable following provisions:

     (a)  The purchase price under each option granted shall be as determined by
the Committee but, in the case of incentive stock options, shall in no instance
be less than 100% of fair market value on the date of grant. The fair market
value on the date of grant shall not be less than the last sale price reported
for the Stock on the New York Stock Exchange ("NYSE") on such date or if there
was no sale on such date, the last date preceding such date on which a sale was
reported. The maximum term of any incentive stock option shall be ten years from
the date it was granted.

     (b)  The maximum term of any non-qualified stock option shall be ten years
and one day from the date it was granted.

     (c)  An option may not be exercised to any extent, either by the person to
whom it was granted or by the grantee's transferee, or by any person after the
grantee's death, unless the person to whom the option was granted has remained
in the continuous employ of the Company, or of a subsidiary, for not less than
six months from the date when the option was granted. Otherwise, each option
shall be exercisable as determined by the Committee.

     (d)  The Company, during the terms of options granted under the Plan, at
all times will keep available the number of shares of stock required to satisfy
such options.

     (e)  The Company will seek to obtain from each regulatory commission or
agency having jurisdiction such authority as may be required to issue and sell
shares of stock to satisfy such options. Inability of the Company to obtain from
any such regulatory commission or agency authority which counsel for the Company
deems necessary for the lawful issuance and sale of its stock to satisfy such
options shall relieve the Company from any liability for failure to issue and
sell stock to satisfy such options pending the time when such authority is
obtained or is obtainable.

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     (f)  Neither a person to whom an option is granted nor his or her
transferee, legal representative, heir, legatee or distributee, shall be deemed
to be the holder of, or to have any of the rights of a holder with respect to,
any shares subject to such option unless and until he or she has exercised his
or her option pursuant to the terms thereof.

     (g)  No incentive stock option may be transferable except by will or by the
laws of descent or distribution. During the lifetime of the person to whom an
incentive stock option is granted, he or she alone may exercise such option.

     (h)  Unless otherwise specified by the Committee in the terms and
conditions of a particular option grant, an option shall terminate and may not
be exercised if the person to whom it is granted ceases to be continuously
employed by the Company, or by a subsidiary of the Company, or to serve as a
director of the Company, except (subject nevertheless to the second-to-last
sentence of this paragraph): (1) if the grantee's continuous employment or other
service is terminated for any reason other than (i) retirement, (ii) permanent
disability or (iii) death, the grantee may exercise the option to the extent
that the grantee was entitled to exercise such option at the date of such
termination at any time within a period of 90 days following the date of such
termination; (2) if the grantee's continuous employment or other service is
terminated by (i) retirement, (ii) permanent disability or (iii) death, the
option may be exercised in accordance with its terms and conditions at any time
within a period of five years following the date of such termination by the
grantee, or, in the event of the grantee's death, by the persons to whom the
grantee's rights under the option shall pass by will or by the laws of descent
or distribution, provided that, in all cases under clauses (1) and (2) an option
shall only be exercisable to the extent the grantee was entitled to exercise
such option at the date of such termination; (3) if the grantee's continuous
employment is terminated and within a period of 90 days thereafter the grantee
is recalled to the active payroll, the Committee may reinstate any portion of
the option previously granted but not exercised. Nothing contained in this
subparagraph (h) is intended to extend the stated term of the option and in no
event may an option be exercised by anyone after the expiration of its stated
term. With respect to non-qualified stock options, termination of employment or
service as an employee or director shall not be treated as a termination of
employment or service for purposes of this Section 6(h) if the grantee continues
without interruption to serve thereafter in another such capacity for the
Company.

     (i)  Option agreements evidencing incentive stock options shall contain
such terms and provisions as may be necessary to render them incentive stock
options pursuant to Section 422 of the Code and the income tax regulations
thereunder, as the same or any successor statute or regulations may at the time
be in effect.

     (j)  In order to facilitate the making of any grant of options under the
Plan, the Committee may provide for such modifications and additional terms and
conditions ("special terms") in grants to grantees who are employed by the
Company or any subsidiary of the Company outside the United States (or who are
foreign nationals temporarily within the United States) as the Committee may
consider necessary or appropriate to accommodate differences in local law,
policy or custom or to facilitate administration of the Plan. The special terms
may provide that the grant of an option is subject to (i) applicable
governmental or regulatory approval or other compliance with local legal
requirements and/or (ii) execution by the grantee

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and return to the Company of a written instrument in the form specified by the
Plan Administrator. In the event such conditions are not satisfied, the grant
shall be void. The special terms may also provide that a grant shall become
exercisable if a grantee's employment with the Company or subsidiary of the
Company ends as a result of workforce reduction, realignment or similar measure
and the Committee may designate a person or persons to make such determination
for a location. The Committee may approve such appendices or supplements to or
amendments, restatements, sub-plans or alternative versions of the Plan as it
may consider necessary or appropriate for purposes of implementing any special
terms, without thereby affecting the terms of the Plan as in effect for any
other purpose.

     (k)  Nothing in this Plan or in any option granted hereunder shall confer
on any optionee any right to continue in the employ or other service of the
Company or any of its subsidiaries, or to interfere in any way with the right of
the Company or any of its subsidiaries to terminate his or her employment or
other service at any time.

7.   TIME OF GRANTING OPTION

     The Committee shall determine the date on which options are granted under
the Plan. All options granted must be approved at a meeting of the Committee by
a majority of the members of the Committee. If an option agreement is not
executed by an employee and returned to the Company on or prior to 90 days after
the date the option agreement is received by the employee (or such earlier date
as the Committee may specify), such option shall terminate.

8.   ADJUSTMENT IN NUMBER OF SHARES AND IN OPTION PRICE

     In the event there is any change in the shares of the Company through the
declaration of stock dividends or a stock split-up, or through recapitalization
resulting in share split-ups, or combinations or exchanges of shares, or
otherwise, the number of shares available for option, as well as the shares
subject to any option and the option price thereof, shall be appropriately
adjusted by the Committee, in its sole discretion. Any such determination by the
Committee shall be final and binding.

9.   PAYMENT OF PURCHASE PRICE AND WITHHOLDING TAXES

     (a)  The purchase price for all shares purchased pursuant to options
exercised must be either paid in full in cash, or paid in full, with the consent
of the Committee, in Common Stock of the Company valued at fair market value on
the date of exercise or a combination of cash and Common Stock. Fair market
value on the date of exercise shall be determined in the same manner as provided
in Section 6(a) hereof.

     (b)  The Committee may permit the payment of all or part of the applicable
withholding taxes due upon exercise of an option, up to the highest marginal
rates then in effect, by the withholding of shares otherwise issuable upon
exercise of the option. Option shares withheld in payment of such taxes shall be
valued at the fair market value of the Company's

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Common Stock on the date of exercise as provided in Section 6(a) hereof.

     (c)  The Committee may require, as a condition of exercise, that the
optionee pay to the Company any required withholding taxes.

     (d)  The Committee may permit same day sale or "cashless exercise" methods
of exercising the option.

10.  CHANGE IN CONTROL

     In the event the Company is merged into or acquired by another entity in a
transaction involving a change in control, the Committee shall have the complete
authority and discretion, but not the obligation, to accelerate the vesting of
any outstanding options granted hereunder. The Committee may also ask the board
of directors to negotiate, as part of any agreement involving a sale or merger
of the Company, a sale of substantially all the Company's assets or similar
transaction, terms providing protection for employees holding options under the
Plan.

     Any options not exercised or assumed as part of the transaction or
otherwise provided for shall terminate as of the effective date of the
transaction.

11.  NON-U.S. ELIGIBLE PERSONS

     Notwithstanding any provision of the Plan to the contrary, in order to
foster and promote achievement of the purposes of the Plan or to comply with
provisions of laws in other countries in which the Company or any subsidiary
operates or has key employees or non-employee directors, the Committee, in its
discretion, shall have the power and authority to (i) determine which (if any)
eligible persons rendering services or employed outside the United States are
eligible to participate in the Plan; (ii) determine which non-United
States-based subsidiaries or operations (e.g., branches, representative offices)
participate in the Plan or any type of options hereunder; (iii) modify the terms
and conditions of any options made to such eligible persons, or with respect to
such non-United States-based subsidiaries or operations; and (iv) establish
sub-plans, modified exercise, payment and other terms and procedures to the
extent deemed necessary or desirable by the Committee.

12.  AMENDMENT, SUSPENSION, OR TERMINATION OF THE PLAN

     (a)  The board of directors of the Company may amend, modify, suspend or
terminate the Plan for the purpose of meeting or addressing any changes in legal
requirements or for any other purpose permitted by law. The board may seek
stockholder approval of an amendment if determined to be required by or
advisable under regulations of the Securities and Exchange Commission or the
Department of Treasury, the rules of any stock exchange on which the Company's
stock is listed, or other applicable law or regulation.

<PAGE>   7

     (b)  The Plan shall continue in effect until all shares available for
issuance under the Plan have been issued. An option may not be granted while the
Plan is suspended or after it is terminated.

     (c)  The rights and obligations under any options granted while the Plan is
in effect shall not be altered or impaired by amendment, suspension or
termination of the Plan, except with the consent of the person to whom the
option was granted or the grantee's transferee or the person to whom rights
under an option shall have passed by will or by the laws of descent and
distribution.

13.  EFFECTIVE DATE

     This Plan is effective as of July 1, 2000, and applies to any option grant
made on or after such date.

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