Document:

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                                                                    EXHIBIT 10.7

                         X10 WIRELESS TECHNOLOGY, INC.

                   2000 EMPLOYEE STOCK PURCHASE PLAN OFFERING

                         ADOPTED July 27, 2000

1.   GRANT; OFFERING DATE.

     (a)  The Board of Directors of X10 Wireless Technology, Inc. (the
"Company"), pursuant to the Company's 2000 Employee Stock Purchase Plan (the
"Plan"), hereby authorizes the grant of rights to purchase shares of common
stock of the Company ("Common Stock") to all Eligible Employees (an "Offering").
The first Offering shall begin simultaneously with the effectiveness of the
Company's registration statement under the Securities Act of 1933 with respect
to the initial public offering of the Company's Common Stock and end on October
31, 2002 (the "Initial Offering"). Offerings shall begin on the next following
November 1 and thereafter every year on November 1 and each such Offering shall
end on the day prior to the first anniversary of its Offering Date. For example,
the second Offering under the Plan shall begin on November 1, 2002 and end on
October 31, 2003. The first day of an Offering is that Offering's "Offering
Date." If an Offering Date falls on a day during which the Common Stock is not
actively traded, then the Offering Date shall be the next succeeding day during
which the Common Stock is actively traded.

     (b)  An Offering may consist of one purchase period or divided into shorter
purchase periods ("Purchase Periods"). The first offering will be divided into
four (4) shorter Purchase Periods of approximately six (6) months in duration.
Thereafter, offerings will be divided into two (2) shorter Purchase Periods of
approximately six (6) months in duration.

     (c)  Prior to the commencement of any Offering, the Board of Directors (or
the Committee described in subparagraph 2(c) of the Plan, if any) may change any
or all terms of such Offering and any subsequent Offerings. The granting of
rights pursuant to each Offering hereunder shall occur on each respective
Offering Date unless, prior to such date (a) the Board of Directors (or such
Committee) determines that such Offering shall not occur, or (b) no shares
remain available for issuance under the Plan in connection with the Offering.

2.   ELIGIBLE EMPLOYEES.

     All employees of the Company and each of its Affiliates (as defined in the
Plan) incorporated in the United States shall be granted rights to purchase
Common Stock under each Offering on the Offering Date of such Offering, provided
that each such employee otherwise meets the employment requirements of
subparagraph 5(a) of the Plan (an "Eligible Employee").  Notwithstanding the
foregoing, the following employees shall not be Eligible Employees or be granted
rights under an Offering:  (i) part-time or seasonal employees whose customary
employment is for fewer than twenty (20) hours per week or for fewer than five
(5) months per calendar year, and (ii) 5% stockholders (including ownership
through unexercised options) described in subparagraph 5(c) of the Plan.
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     Each person who first becomes an Eligible Employee during any Offering
shall be granted a right to purchase Common Stock under such Offering on the
next May 1 or November 1 during such Offering, which right shall thereafter be
deemed to be a part of such Offering.  Such right shall have the same
characteristics as any rights originally granted under the Offering except that:

     (a)  the date on which such right is granted shall be the "Offering Date"
of such right for all purposes, including determination of the exercise price of
such right; and

     (b)  the Offering for such right shall begin on its Offering Date and end
coincident with the ongoing Offering.

3.   RIGHTS.

     (a)  Subject to the limitations contained herein and in the Plan, on each
Offering Date each Eligible Employee shall be granted the right to purchase the
number of shares of Common Stock purchasable with up to fifteen percent (15%) of
such Participant's Earnings (as defined in the Plan) paid during the period of
such Offering.

     (b)  The maximum aggregate number of shares available to be purchased by
all Eligible Employees under an Offering shall be the number of shares remaining
available under the Plan on the Offering Date. If the aggregate purchase of
shares of Common Stock upon exercise of rights granted under the Offering would
exceed the maximum aggregate number of shares available, the Board shall make a
pro rata allocation of the shares available in a uniform and equitable manner.

     (c)  Notwithstanding the foregoing, no employee shall be granted an option
under the Plan which permits such employee's right to purchase stock under the
Plan and all other employee stock purchase plans (described in Section 423 of
the Code) of the Company to accrue at a rate that exceeds twenty five thousand
dollars ($25,000) of fair market value of such stock (determined at the time
such option is granted) for each calendar year in which such option is
outstanding at any time.

4.   PURCHASE PRICE.

     The purchase price of the Common Stock under the Offering shall be the
lesser of (a) eighty-five percent (85%) of the fair market value of the Common
Stock on the Offering Date (or eighty-five percent (85%) of the fair market
value of the Common Stock on the first day on which the Company's Common Stock
is actively traded that immediately follows the Offering Date if an Offering
Date falls on a day during which the Company's Common Stock is not actively
traded) or (b) eighty-five percent (85%) of the fair market value of the Common
Stock on the Purchase Date (or eighty-five percent (85%) of the fair market
value of the Common Stock on the first day on which the Company's Common Stock
is actively traded that immediately precedes the Purchase Date if a Purchase
Date falls on a day during which the Company's Common Stock is not actively
traded).

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5.   PARTICIPATION.

     (a)  Except as otherwise provided herein or in the Plan, an Eligible
Employee may elect to begin payroll deductions under an Offering as of the
beginning of the Offering or as of the day after any Purchase Date (i.e., any
May 1 or November 1 except for November 1, 2000). Such an election shall be made
by delivering an agreement authorizing payroll deductions. Such deductions shall
be made each pay period and must be in whole percentages not to exceed fifteen
percent (15%) of Earnings. The agreement shall be made on such enrollment form
as the Company or a designated Affiliate provides and must be delivered to the
Company or designated Affiliate ten (10) days before the Offering Date to be
effective for such Offering, unless a later time for filing the enrollment form
is set by the Company for all Eligible Employees with respect to a given
Offering Date. As to the Initial Offering, the time for filing an enrollment
form and commencing participation for individuals who are Eligible Employees on
the Offering Date for the Initial Offering shall be determined by the Company
and communicated to such Eligible Employees. A participant may not make
additional contributions under the Plan.

     (b)  Generally, once during any Purchase Period, a participant may increase
or reduce (including to zero) his or her participation level as of the following
May 1 or November 1, except that no change may be made during the ten (10) days
immediately preceding each Purchase Date (or such shorter period of time
determined by the Company and communicated to participants). Any such change in
participation shall be made by delivering a notice to the Company or a
designated Affiliate in such form and at such time as the Company may provide.
Notwithstanding the foregoing, a participant may reduce (including to zero) his
or her participation level once (and only once) during any Purchase Period,
except that no change may be made during the ten (10) days immediately preceding
each Purchase Date (or such shorter period of time determined by the Company and
communicated to participants). Such change shall become effective as soon as
administratively practicable. In addition, a participant may withdraw from an
Offering and receive his or her accumulated payroll deductions from the Offering
(reduced to the extent, if any, such deductions have been used to acquire Common
Stock for the Participant on any prior Purchase Dates), without interest, at any
time prior to the end of the Offering, excluding the ten (10) day period
immediately preceding a Purchase Date (or such shorter period of time determined
by the Company and communicated to participants), by delivering a withdrawal
notice to the Company or designated Affiliate in such form as the Company
provides. A participant who has withdrawn from an Offering shall not again
participate in such Offering but may participate in subsequent Offerings under
the Plan by submitting a new participation agreement in accordance with the
terms thereof.

6.   PURCHASES.

     Subject to the limitations contained herein, on each Purchase Date, each
participant's accumulated payroll deductions (without any increase for interest)
shall be applied to the purchase of whole shares of Common Stock, up to the
maximum number of shares permitted under the Plan and the Offering.  "Purchase
Date" shall be defined as April 30, 2001, and each April 30 and October 31,
thereafter.  If a Purchase Date falls on a day during which the Common Stock is
not actively traded then the Purchase Date shall be the nearest prior day on
which the Common Stock is actively traded.

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7.   NOTICES.

     Any notices or agreements provided for in the Offering or the Plan shall be
given in writing, in a form provided by the Company and, unless specifically
provided for in the Plan or this Offering, shall be deemed effectively given
upon receipt or, in the case of notices and agreements delivered by the Company,
five (5) days after deposit in the United States mail, postage prepaid.

8.   EXERCISE CONTINGENT ON STOCKHOLDER APPROVAL.

     The rights granted under an Offering are subject to the approval of the
Plan by the stockholders of the Company as required for the Plan to obtain
employee stock purchase plan treatment under Section 423 of the Code.

9.   OFFERING SUBJECT TO PLAN.

     Each Offering is subject to all the provisions of the Plan, and its
provisions are hereby made a part of the Offering, and is further subject to all
interpretations, amendments, rules and regulations that may from time to time be
promulgated and adopted pursuant to the Plan.  In the event of any conflict
between the provisions of an Offering and those of the Plan (including
interpretations, amendments, rules and regulations that may from time to time be
promulgated and adopted pursuant to the Plan), the provisions of the Plan shall
control.

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                                                                     Exhibit 4.6

                           CHATHAM TECHNOLOGIES, INC.
                                STOCK OPTION PLAN

I.      PURPOSE AND DEFINITIONS

    A.  PURPOSE OF THE PLAN

        The Plan is intended to encourage ownership of Shares by Eligible
        Employees and Key Non-Employees in order to attract and retain such
        Eligible Employees in the employ of the Company or an Affiliate, or to
        attract such Key Non-Employees to provide services to the Company or an
        Affiliate, and to provide additional incentive for such persons to
        promote the success of the Company or an Affiliate.

    B.  DEFINITIONS

        Unless otherwise specified or unless the context otherwise requires, the
        following terms, as used in this Plan, have the following meanings:

        1.     AFFILIATE means a corporation which, for purposes of Section 424
               of the Code, is a parent or subsidiary of the Company, direct or
               indirect.

        2.     BOARD means the Board of Directors of the Company.

        3.     CODE means the Internal Revenue Code of 1986, as amended.

        4.     COMMITTEE means the committee to which the Board delegates the
               power to act under or pursuant to the provisions of the Plan, or
               the Board if no committee is selected. If the Board delegates
               powers to a committee, and if the Company is or becomes subject
               to Section 16 of the Exchange Act, then, if necessary for
               compliance therewith, such committee shall consist initially of
               not less than two (2) members of the Board, each member of which
               must be a "non-employee director," within the meaning of the
               applicable rules promulgated pursuant to the Exchange Act. If the
               Company is or becomes subject to Section 16 of the Exchange Act,
               no member of the Committee shall receive any Option pursuant to
               the Plan or any similar plan of the Company or any Affiliate
               while serving on the Committee unless the Board determines that
               the grant of such an Option satisfies the then current Rule 16b-3
               requirements under the Exchange Act. Notwithstanding anything
               herein to the contrary, and insofar as the Board determines that
               it is necessary in order for compensation recognized by
               Participants pursuant to the Plan to be fully deductible to the
               Company for federal income tax purposes, each member of the
               Committee also shall be an "outside director" (as defined in
               regulations or

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               other guidance issued by the Internal Revenue Service under Code
               Section 162(m)).

        5.     COMMON STOCK means the common stock, $.01 par value, of the
               Company.

        6.     COMPANY means Chatham Technologies, Inc., a Delaware corporation,
               and includes any successor or assignee corporation or
               corporations into which the Company may be merged, changed, or
               consolidated; any corporation for whose securities the securities
               of the Company shall be exchanged; and any assignee of or
               successor to substantially all of the assets of the Company.

        7.     DISABILITY or DISABLED means permanent and total disability as
               defined in Section 22(e)(3) of the Code.

        8.     ELIGIBLE EMPLOYEE means an employee of the Company or of an
               Affiliate (including, without limitation, an employee who also is
               serving as an officer or director of the Company or of an
               Affiliate), designated by the Board or the Committee as being
               eligible to be granted one or more Options under the Plan.

        9.     EXCHANGE ACT means the Securities Exchange Act of 1934, as
               amended from time to time, or any successor statute thereto.

        10.    INCENTIVE OPTION means an Option which, when granted, is intended
               to be an "incentive stock option," as defined in Section 422 of
               the Code.

        11.    KEY NON-EMPLOYEE means a non-employee director, consultant, or
               independent contractor of the Company or of an Affiliate who is
               designated by the Board or the Committee as being eligible to be
               granted one or more Options under the Plan.

        12.    NONSTATUTORY OPTION means an Option which, when granted, is not
               intended to be an "incentive stock option," as defined in Section
               422 of the Code.

        13.    OPTION means a right or option granted under the Plan.

        14.    OPTION AGREEMENT means an agreement between the Company and a
               Participant executed and delivered pursuant to the Plan.

        15.    PARTICIPANT means an Eligible Employee to whom one or more
               Incentive Options or Nonstatutory Options are granted under the
               Plan, and a Key Non-Employee to whom one or more Nonstatutory
               Options are granted under the Plan.

        16.    PLAN means this Stock Option Plan, as amended from time to time.

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        17.    SHARES means the authorized but unissued shares of the capital
               stock of the Company as to which Options have been or may be
               granted under the Plan.

II.     SHARES SUBJECT TO THE PLAN

        The aggregate number of Shares as to which Options may be granted from
        time to time shall be ____________________________________________
        (__________) Shares (subject to adjustment for stock splits, stock
        dividends, and other adjustments described in Article VI hereof);
        provided, however, that if the Company is or becomes a publicly held
        corporation, as such term is defined under Section 162(m) of the Code,
        the aggregate number of Shares as to which Options may be granted in any
        calendar year to any one Eligible Employee shall not exceed
        ______________ (subject to adjustment for stock splits, stock dividends,
        and other adjustments described in Article VI hereof).

        Shares subject to Options that are forfeited, terminated, expire
        unexercised, canceled by agreement of the Company and the Participant,
        settled in cash in lieu of Common Stock or in such manner that all or
        some of the Shares covered by such Options are not issued to a
        Participant, or are exchanged for Options that do not involve Common
        Stock, shall immediately become available for Options.

        Subject to the provisions of Article VI, the aggregate number of Shares
        as to which Incentive Options may be granted shall be subject to change
        only by means of an amendment of the Plan duly adopted by the Company
        and approved by the stockholders of the Company within one year before
        or after the date of the adoption of any such amendment.

III.    ADMINISTRATION OF THE PLAN

        The Plan shall be administered by the Committee. A majority of the
        Committee shall constitute a quorum at any meeting thereof (including by
        telephone conference) and the acts of a majority of the members present,
        or acts approved in writing by a majority of the entire Committee
        without a meeting, shall be the acts of the Committee for purposes of
        this Plan. The Committee may authorize one or more of its members or an
        officer of the Company to execute and deliver documents on behalf of the
        Committee. A member of the Committee shall not exercise any discretion
        respecting himself or herself under the Plan. The Board shall have the
        authority to remove, replace or fill any vacancy of any member of the
        Committee upon notice to the Committee and the affected member. Any
        member of the Committee may resign upon notice to the Board. The
        Committee may allocate among one or more of its

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        members, or may delegate to one or more of its agents, such duties and
        responsibilities as it determines.

        Subject to the provisions of the Plan, the Committee is authorized to:

        A.     interpret the provisions of the Plan or of any Option or Option
               Agreement and to make all rules and determinations which it deems
               necessary or advisable for the administration of the Plan;

        B.     determine which employees of the Company or of an Affiliate shall
               be designated as Eligible Employees and which of the Eligible
               Employees shall be granted Options;

        C.     determine the Key Non-Employees to whom Nonstatutory Options
               shall be granted;

        D.     determine whether the Option to be granted shall be an Incentive
               Option or Nonstatutory Option;

        E.     determine the number of Shares for which an Option or Options
               shall be granted;

        F.     provide for the acceleration of the right to exercise an Option
               (or portion thereof); and

        G.     specify the terms and conditions upon which Options may be
               granted;

        provided, however, that with respect to Incentive Options, all such
        interpretations, rules, determinations, terms, and conditions shall be
        made and prescribed in the context of preserving the tax status of the
        Incentive Options as incentive stock options within the meaning of
        Section 422 of the Code.

        The Committee may delegate to the chief executive officer and to other
        senior officers of the Company or its Affiliates its duties under the
        Plan pursuant to such conditions or limitations as the Committee may
        establish, except that only the Committee may select, and grant Options
        to, Participants who are subject to Section 16 of the Exchange Act. All
        determinations of the Committee shall be made by a majority of its
        members. No member of the Committee shall be liable for any action or
        determination made in good faith with respect to the Plan or any Option.

IV.     ELIGIBILITY FOR PARTICIPATION

        The Committee may at any time and from time to time grant one or more
        Options to one or more Eligible Employees or Key Non-Employees and may
        designate the number of Shares to be subject to each Option so granted,
        provided, however, that (i) each Participant receiving an Incentive
        Option must be an Eligible Employee of the Company or of an Affiliate at
        the time an Incentive Option is granted; (ii) no Incentive Options shall
        be granted after the expiration of ten (10) years from the earlier of
        the date of the adoption of the Plan by the Company or

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        the approval of the Plan by the stockholders of the Company; (iii) the
        fair market value of the Shares (determined at the time the Option is
        granted) as to which Incentive Options are exercisable for the first
        time by any Eligible Employee during any single calendar year (under the
        Plan and under any other incentive option plan of the Company or an
        Affiliate) shall not exceed $100,000 and (iv) in no event, may any Key
        Non-Employee participate in the Plan if such participation is (a)
        prohibited, or (b) restricted (either absolutely or subject to various
        securities requirements, whether, legal or administrative, being
        complied with), in the jurisdiction in which such Key Non-Employee is
        resident under the relevant securities laws of that jurisdiction.
        Provided Always That in the case of (b) above, the relevant Key
        Non-Employee's participation in the Plan may be effected at the absolute
        discretion of the Committee if compliance with the relevant securities
        requirements of the jurisdiction in which such Key Non-Employee is
        resident is not impractical (having regard to the nature of those
        requirements) and would not involve undue expense.

        Notwithstanding the foregoing, if the Company is or becomes subject to
        Section 16 of the Exchange Act, then no individual who is a member of
        the Committee shall be eligible to receive an Option, unless the Board
        determines that the grant of the Option satisfies the then current Rule
        16b-3 requirements under the Exchange Act. If the Company is not subject
        to Section 16 of the Exchange Act, then no individual who is a member of
        the Committee shall be eligible to receive an Option under the Plan
        unless the granting of such Option shall be approved by the Committee,
        with all of the members voting thereon being disinterested members. For
        the purpose of this Article IV, a "disinterested member" shall be any
        member who shall not then be, or at any time within the year prior
        thereto have been, granted an Option under the Plan or any other plan of
        the Company or an Affiliate, other than an Option granted under a
        formula plan established by the Company or an Affiliate.

        Notwithstanding any of the foregoing provisions, the Committee may
        authorize the grant of an Option to a person not then in the employ of
        or serving as a director, consultant, or independent contractor of the
        Company or of an Affiliate, conditioned upon such person becoming
        eligible to become a Participant at or prior to the execution of the
        Option Agreement evidencing the actual grant of such option.

V.      TERMS AND CONDITIONS OF OPTIONS

        Each Option shall be set forth in an Option Agreement, duly executed on
        behalf of the Company and by the Participant to whom such Option is
        granted. Except for the setting of the Option price under Paragraph A,
        no Option shall be granted and no purported grant of any Option shall be
        effective until such Option Agreement shall have been duly executed on
        behalf of the Company and by the Participant. Each such Option Agreement
        shall be subject to at least the following terms and conditions:

    A.  OPTION PRICE

               The exercise price of the Shares covered by each Option granted
               under the Plan shall be determined by the Committee. In the case
               of an Incentive Option, if the optionee owns directly or by
               reason of the applicable attribution rules ten percent (10%) or
               less of the total combined voting power of all classes of share
               capital of the Company, the Option price (per share) of the
               Shares covered by each Incentive Option shall be not less than
               the "fair market value" of the Shares on the date of the grant of
               the Incentive Option. In all other cases of Incentive Options,
               the Option price shall be not less than one hundred ten percent
               (110%) of the said fair market value on the date of grant. If the
               Shares are listed on any national securities exchange, the fair
               market value shall be

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               the closing sales price, if any, on the largest such exchange on
               the date of the grant of the Option, or, if none, on the most
               recent trade date thirty (30) days or less prior to the date of
               the grant of the Option. If the Shares are not then listed on any
               such exchange, the fair market value of such Shares shall be the
               closing sales price if such is reported or otherwise the mean
               average of the closing "Bid" and the closing "Ask" prices, if
               any, as reported on the National Association of Securities
               Dealers Automated Quotation System ("NASDAQ") for the date of the
               grant of the Option, or if none, on the most recent trade date
               thirty (30) days or less prior to the date of the grant of the
               Option for which such quotations are reported. If the Shares are
               not then either listed on any such exchange or quoted on NASDAQ,
               the fair market value shall be the mean between the average of
               the "Bid" and the average of the "Ask" prices, if any, as
               reported in the National Daily Quotation Service for the date of
               the grant of the Option, or, if none, for the most recent trade
               date thirty (30) days or less prior to the date of the grant of
               the Option for which such quotations are reported. If the fair
               market value cannot be determined under the preceding three
               sentences, it shall be determined in good faith by the
               Committee. In no event may the exercise price be less than the
               par value of a share.

    B.  NUMBER OF SHARES

               Each Option shall state the number of Shares to which it
               pertains.

    C.  TERM OF OPTION

               Each Incentive Option shall terminate not more than ten (10)
               years from the date of the grant thereof, or at such earlier time
               as the Option Agreement may provide, and shall be subject to
               earlier termination as herein provided, except that if the Option
               price is required under Paragraph A of this Article V to be at
               least one hundred ten percent (110%) of fair market value, each
               such Incentive Option shall terminate not more than five (5)
               years from the date of the grant thereof, and shall be subject to
               earlier termination as herein provided.

    D.  DATE OF EXERCISE

               Upon the authorization of the grant of an Option, or at any time
               thereafter, the Committee may, subject to the provisions of
               Paragraph C of this Article V, prescribe the date or dates on
               which the Option becomes exercisable, and may provide that the
               Option rights become exercisable in installments over a period of
               years, or upon the attainment of stated goals.

    E.  MEDIUM OF PAYMENT

               The Option price shall be paid on the date of purchase specified
               in the notice of exercise, as set forth in Paragraph I. It shall
               be paid in such form (permitted by Section 422 of the Code in the
               case of Incentive Options) as the Committee shall,

<PAGE>   7

               either by rules promulgated pursuant to the provisions of Article
               III of the Plan, or in the particular Option Agreement, provide.

    F.  TERMINATION OF EMPLOYMENT

               1.     A Participant who ceases to be an employee or Key
                      Non-Employee of the Company or of an Affiliate for any
                      reason other than death, Disability, or termination for
                      cause, may exercise any Option granted to such
                      Participant, to the extent that the right to purchase
                      Shares thereunder has become exercisable on the date of
                      such termination, but only within three (3) months after
                      such date, or, if earlier, within the originally
                      prescribed term of the Option, and subject to the
                      condition that no Option shall be exercisable after the
                      expiration of the term of the Option. A Participant's
                      employment shall not be deemed terminated by reason of a
                      transfer to another employer which is the Company or an
                      Affiliate.

               2.     A Participant who ceases to be an employee or Key
                      Non-Employee for cause shall, upon such termination, cease
                      to have any right to exercise any Option. For purposes of
                      this Plan, cause shall mean, in the Committee's
                      discretion, (i) in the case of an employee or Key
                      Non-Employee, if there is a written employment or
                      consulting agreement between the Participant and the
                      Company or any of its Affiliates, cause as defined in such
                      agreement, and (ii) in all other cases, the wrongful
                      appropriation of funds of the Company or an Affiliate,
                      divulging confidential information about the Company or an
                      Affiliate to the public, the commission of a gross
                      misdemeanor or felony, or the performance of any other
                      action that the Board or the Committee, in their sole
                      discretion, may deem to be sufficiently injurious to the
                      interests of the Company or an Affiliate to constitute
                      substantial cause for termination. The determination of
                      the Board or the Committee as to the existence of cause
                      shall be conclusive and binding upon the Participant and
                      the Company.

               3.     A Participant who is absent from work with the Company or
                      an Affiliate because of temporary disability (any
                      disability other than a permanent and total Disability as
                      defined at Paragraph B(6) of Article I hereof), or who is
                      on leave of absence for any purpose permitted by any
                      authoritative interpretation (i.e., regulation, ruling,
                      case law, etc.) of Section 422 of the Code, shall not,
                      during the period of any such absence, be deemed, by
                      virtue of such absence alone, to have terminated his
                      employment or relationship with the Company or with an
                      Affiliate, except as the Committee may otherwise expressly
                      provide or determine.

               4.     Paragraph F(1) shall control and fix the rights of a
                      Participant who ceases to be an employee or Key
                      Non-Employee of the Company or of an Affiliate for any
                      reason other than death, Disability, or termination for
                      cause, and who

<PAGE>   8

                      subsequently becomes Disabled or dies. Nothing in
                      Paragraphs G and H of this Article V shall be applicable
                      in any such case except that, in the event of such a
                      subsequent Disability or death within the three (3) month
                      period after the termination of employment or, if earlier,
                      within the originally prescribed term of the Option, the
                      Participant or the Participant's estate or personal
                      representative may exercise the Option permitted by this
                      Paragraph F, in the event of Disability, within twelve
                      (12) months after the date that the Participant ceased to
                      be an employee or Key Non-Employee of the Company or of an
                      Affiliate or, in the event of death, within twelve (12)
                      months after the date of death of such Participant.

    G.  TOTAL AND PERMANENT DISABILITY

               A Participant who ceases to be an employee or Key Non-Employee of
               the Company or of an Affiliate by reason of Disability may
               exercise any Option granted to such Participant to the extent
               that the right to purchase Shares thereunder has become
               exercisable on or before the date such Participant becomes
               Disabled as determined by the Committee.

               A Disabled Participant, or his estate or personal representative,
               shall exercise such rights, if at all, only within a period of
               not more than twelve (12) months after the date that the
               Participant became Disabled as determined by the Committee
               (notwithstanding that the Participant might have been able to
               exercise the Option as to some or all of the Shares on a later
               date if the Participant had not become Disabled) or, if earlier,
               within the originally prescribed term of the Option.

    H.  DEATH

               In the event that a Participant to whom an Option has been
               granted ceases to be an employee or Key Non-Employee of the
               Company or of an Affiliate by reason of such Participant's death,
               such Option, to the extent that the right is exercisable but not
               exercised on the date of death, may be exercised by the
               Participant's estate or personal representative within twelve
               (12) months after the date of death of such Participant or, if
               earlier, within the originally prescribed term of the Option,
               notwithstanding that the decedent might have been able to
               exercise the Option as to some or all of the Shares on a later
               date if the Participant were alive and had continued to be an
               employee or Key Non-Employee of the Company or of an Affiliate.

    I.  EXERCISE OF OPTION AND ISSUE OF STOCK

               Options shall be exercised by giving written notice to the
               Company. Such written notice shall: (l) be signed by the person
               exercising the Option, (2) state the number of Shares with
               respect to which the Option is being exercised, (3) contain the
               warranty required by paragraph M of this Article V, and (4)
               specify a date (other than a

<PAGE>   9

               Saturday, Sunday or legal holiday) not less than five (5), as
               the date on which the Shares will be purchased. Such tender and
               conveyance shall take place at the principal office of the
               Company during ordinary business hours, or at such other hour and
               place agreed upon by the Company and the person or persons
               exercising the Option. On the date specified in such written
               notice (which date may be extended by the Company in order to
               comply with any law or regulation which requires the Company to
               take any action with respect to the Option Shares prior to the
               issuance thereof, whether pursuant to the provisions of Article
               VI or otherwise), the Company shall accept payment for the Option
               Shares in cash, by bank or certified check, by wire transfer, or
               by such other means as may be approved by the Committee and shall
               deliver to the person or persons exercising the Option in
               exchange therefor an appropriate certificate or certificates for
               fully paid non-assessable Shares.

               If approved in advance by the Committee, payment in full or in
               part also may be made (i) by the execution and delivery of a note
               or other evidence of indebtedness (and any security agreement
               thereunder) satisfactory to the Committee; (ii) by the delivery
               of cash or the extension of credit by a broker-dealer to whom the
               Participant has submitted a notice of exercise or otherwise
               indicated an intent to exercise an Option (in accordance with
               part 220, Chapter II, Title 12 of the Code of Federal
               Regulations, a so-called "cashless" exercise); or (iii) by any
               combination of the foregoing.

    J.  RIGHTS AS A STOCKHOLDER

               No Participant to whom an Option has been granted shall have
               rights as a stockholder with respect to any Shares covered by
               such Option except as to such Shares as have been issued to or
               registered in the Company's share register in the name of such
               Participant upon the due exercise of the Option and tender of the
               full Option price.

    K.  ASSIGNABILITY AND TRANSFERABILITY OF OPTION

               Unless otherwise permitted by the Code and by Rule 16b-3 of the
               Exchange Act, if applicable, and approved in advance by the
               Committee, an Option granted to a Participant shall not be
               transferable by the Participant and shall be exercisable, during
               the Participant's lifetime, only by such Participant or, in the
               event of the Participant's incapacity, his guardian or legal
               representative. Except as otherwise permitted herein, such Option
               shall not be assigned, pledged or hypothecated in any way
               (whether by operation of law or otherwise) and shall not be
               subject to execution, attachment, or

<PAGE>   10

               similar process. Any attempted transfer, assignment, pledge,
               hypothecation or other disposition of any Option or of any rights
               granted thereunder contrary to the provisions of this Paragraph
               K, or the levy of any attachment or similar process upon an
               Option or such rights, shall be null and void.

    L.  OTHER PROVISIONS

               The Option Agreement for an Incentive Option shall contain such
               limitations and restrictions upon the exercise of the Option as
               shall be necessary in order that such Option can be an "incentive
               stock option" within the meaning of Section 422 of the Code.
               Further, the Option Agreements authorized under the Plan shall be
               subject to such other terms and conditions including, without
               limitation, restrictions upon the exercise of the Option, as the
               Committee shall deem advisable and which, in the case of
               Incentive Options, are not inconsistent with the requirements of
               Section 422 of the Code.

    M.  PURCHASE FOR INVESTMENT

               Unless the Shares to be issued upon the particular exercise of an
               Option shall have been effectively registered under the
               Securities Act of 1933, as now in force or hereafter amended, the
               Company shall be under no obligation to issue the Shares covered
               by such exercise unless and until the following conditions have
               been fulfilled. In accordance with the direction of the
               Committee, the persons who exercise such Option shall warrant to
               the Company that, at the time of such exercise, such persons are
               acquiring their Option Shares for investment and not with a view
               to, or for sale in connection with, the distribution of any such
               Shares, and shall make such other representations, warranties,
               acknowledgments and affirmations, if any, as the Committee may
               require. In such event, the persons acquiring such Shares shall
               be bound by the provisions of the following legend (or similar
               legend) which shall be endorsed upon the certificate(s)
               evidencing their Option Shares issued pursuant to such exercise.

                      "The shares represented by this certificate have been
                      acquired for investment and they may not be sold or
                      otherwise transferred by any person, including a pledgee,
                      in the absence of an effective registration statement for
                      the shares under the Securities Act of 1933 or an opinion
                      of counsel satisfactory to the Company that an exemption
                      from registration is then available."

                      "The shares of stock represented by this certificate are
                      subject to the terms and conditions of either a certain
                      Option Agreement dated as of _________, 19__, among the
                      Company and certain of its optionees, or a certain
                      Shareholders' Agreement dated as of _________, 19__, among
                      the Company and certain shareholders. A copy of the
                      applicable Agreement is on file in the office of the
                      Secretary of the Company. The applicable Agreement
                      provides, among

<PAGE>   11

                      other things, for restrictions upon the holder's right to
                      transfer the shares represented hereby; and for certain
                      prior rights to purchase and certain obligations to sell
                      the shares of common stock evidenced by this certificate
                      at a designated purchase price determined in accordance
                      with certain procedures. Any attempted transfer of these
                      shares other than in compliance with the applicable
                      Agreement shall be void and of no effect. By accepting the
                      shares of stock evidenced by this certificate, any
                      permitted transferee agrees to be bound by all of the
                      terms and conditions of said Agreement."

               Without limiting the generality of the foregoing, the Company may
               delay issuance of the Shares until completion of any action or
               obtaining any consent that the Company deems necessary under any
               applicable law (including without limitation state securities or
               "blue sky" laws).

VI.     ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; SALE OF COMPANY

        In the event that the outstanding Shares of the Company are changed into
        or exchanged for a different number or kind of shares or other
        securities of the Company or of another corporation by reason of any
        reorganization, merger, consolidation, recapitalization,
        reclassification, change in par value, stock split-up, combination of
        shares or dividend payable in capital stock, or the like, the Company
        shall make adjustments to such Options (including, by way of example and
        not by way of limitation, the grant of substitute options under the Plan
        or under the plan of such other corporation) as it may determine to be
        appropriate under the circumstances, and, in addition, appropriate
        adjustments shall be made in the number and kind of shares and in the
        option price per share subject to outstanding options under the Plan or
        under the plan of such successor corporation. No such adjustment shall
        be made which shall, within the meaning of Section 424 of the Code,
        constitute such a modification, extension, or renewal of an option as to
        cause the adjustment to be considered as the grant of a new option.

        Notwithstanding anything herein to the contrary, the Company may, in its
        sole discretion, accelerate the timing of the exercise provisions of any
        Option in the event of (i) the adoption of a plan of merger or
        consolidation under which all the Shares of the Company would be
        eliminated, or (ii) a sale of all or substantially all of the Company's
        assets or Shares. Alternatively, the Company may, in its sole
        discretion, cancel any or all Options upon any of the foregoing events
        and provide for the payment to Participants in cash of an amount equal
        to the difference between the Option price and the price of a Share, as
        determined in good faith by the Committee, at the close of business on
        the date of such event, multiplied by the number of Shares subject to
        Option so canceled.

        Upon a business combination by the Company or any of its Affiliates with
        any corporation or other entity through the adoption of a plan of merger
        or consolidation or a share exchange or through the purchase of all or
        substantially all of the capital stock or assets of such other
        corporation or entity, the Board or the Committee may, in its sole
        discretion, grant Options

<PAGE>   12

        pursuant hereto to all or any persons who, on the effective date of such
        transaction, hold outstanding options to purchase securities of such
        other corporation or entity and who, on and after the effective date of
        such transaction, will become employees or directors of, or consultants
        to, the Company or its Affiliates. The number of Shares subject to such
        substitute Options shall be determined in accordance with the terms of
        the transaction by which the business combination is effected.
        Notwithstanding the other provisions of this Plan, the other terms of
        such substitute Options shall be substantially the same as or
        economically equivalent to the terms of the options for which such
        Options are substituted, all as determined by the Board or by the
        Committee, as the case may be. Upon the grant of substitute Options
        pursuant hereto, the options to purchase securities of such other
        corporation or entity for which such Options are substituted shall be
        canceled immediately.

VII.    DISSOLUTION OR LIQUIDATION OF THE COMPANY

        Upon the dissolution or liquidation of the Company other than in
        connection with a transaction to which the preceding Article VI is
        applicable, all Options granted hereunder shall terminate and become
        null and void; provided, however, that if the rights of a Participant
        under the applicable Options have not otherwise terminated and expired,
        the Participant shall have the right immediately prior to such
        dissolution or liquidation to exercise any Option granted hereunder to
        the extent that the right to purchase shares thereunder has become
        exercisable as of the date immediately prior to such dissolution or
        liquidation.

VIII.   TERMINATION OF THE PLAN

        The Plan shall terminate (10) years from the earlier of the date of its
        adoption or the date of its approval by the stockholders. The Plan may
        be terminated at an earlier date by vote of the stockholders or the
        Board; provided, however, that any such earlier termination shall not
        affect any Options granted or Option Agreements executed prior to the
        effective date of such termination. Except as may otherwise be provided
        for under Articles VI and VII, and notwithstanding the termination of
        the Plan, any Options granted prior to the effective date of the Plan's
        termination may be exercised until the earlier of (i) the date set forth
        in the Option Agreement, or (ii) ten (10) years from the date the Option
        is granted, and the provisions of the Plan with respect to the full and
        final authority of the Committee under the Plan shall continue to
        control.

IX.     AMENDMENT OF THE PLAN

        The Plan may be amended by the Board and such amendment shall become
        effective upon adoption by the Board; provided, however, that any
        amendment shall be subject to the approval of the stockholders of the
        Company at or before the next annual meeting of the stockholders of the
        Company if such stockholder approval is required by the Code, any
        federal or state law or regulation, the rules of any stock exchange or
        automated quotation system on which the Shares may be listed or quoted,
        or if the Board, in its discretion, determines to submit such changes to
        the Plan to its stockholders for approval.

<PAGE>   13

X.      EMPLOYMENT RELATIONSHIP

        Nothing herein contained shall be deemed to prevent the Company or an
        Affiliate from terminating the employment of a Participant, nor to
        prevent a Participant from terminating the Participant's employment with
        the Company or an Affiliate.

XI.     INDEMNIFICATION OF COMMITTEE

        In addition to such other rights of indemnification as they may have as
        directors or as members of the Committee, the members of the Committee
        shall, to the extent permitted under Singapore laws, be indemnified by
        the Company against all reasonable expenses, including attorneys' fees,
        actually and reasonably incurred in connection with the defense of any
        action, suit or proceeding, or in connection with any appeal therein, to
        which they or any of them may be a party by reason of any action taken
        by them as members of the Committee and against all amounts paid by them
        in settlement thereof (provided such settlement is approved by
        independent legal counsel selected by the Company) or paid by them in
        satisfaction of a judgment in any such action, suit or proceeding,
        except in relation to matters as to which it shall be adjudged in such
        action, suit or proceeding that the Committee member is liable for gross
        negligence or willful misconduct in the performance of his or her
        duties. To receive such indemnification, a Committee member must first
        offer in writing to the Company the opportunity, at its own expense, to
        defend any such action, suit or proceeding.

XII.    MITIGATION OF EXCISE TAX

        If any payment or right accruing to a Participant under this Plan
        (without the application of this Article XII), either alone or together
        with other payments or rights accruing to the Participant from the
        Company or an Affiliate ("Total Payments"), would constitute a
        "parachute payment" (as defined in Section 280G of the Code and
        regulations thereunder), such payment or right shall be reduced, either
        under this Plan or under any other agreement providing for such other
        payments or rights, to the largest amount or greatest right that will
        result in no portion of the amount payable or right accruing under the
        Plan being subject to an excise tax under Section 4999 of the Code or
        being disallowed as a deduction under Section 280G of the Code. The
        determination of whether any reduction in the rights or payments under
        this Plan is to apply shall be made by the Company. The Participant
        shall cooperate in good faith with the Company in making such
        determination and providing any necessary information for this purpose.

XIII.   SAVINGS CLAUSE

        This Plan is intended to comply in all respects with applicable law and
        regulations, including, (i) with respect to those Participants who are
        officers or directors for purposes of Section 16 of the Exchange Act,
        Rule 16b-3 of the Securities and Exchange Commission, if applicable, and
        (ii) with respect to executive officers, Code Section 162(m). In case
        any one or more

<PAGE>   14

        provisions of this Plan shall be held invalid, illegal, or unenforceable
        in any respect under applicable law and regulation (including Rule 16b-3
        and Code Section 162(m)), the validity, legality, and enforceability of
        the remaining provisions shall not in any way be affected or impaired
        thereby and the invalid, illegal, or unenforceable provision shall be
        deemed null and void; however, to the extent permitted by law, any
        provision that could be deemed null and void shall first be construed,
        interpreted, or revised retroactively to permit this Plan to be
        construed in compliance with all applicable law (including Rule 16b-3
        and Code Section 162(m)) so as to foster the intent of this Plan.
        Notwithstanding anything herein to the contrary, with respect to
        Participants who are officers and directors for purposes of Section 16
        of the Exchange Act, no grant of an Option to purchase Shares shall
        permit unrestricted ownership of Shares by the Participant for at least
        six (6) months from the date of the grant of such Option, unless the
        Board determines that the grant of such Option to purchase Shares
        otherwise satisfies the then current Rule 16b-3 requirements.

XIV.    WITHHOLDING

        Except as otherwise provided by the Committee,

        A.     The Company shall have the power and right to deduct or withhold,
               or require a Participant to remit to the Company, an amount
               sufficient to satisfy the minimum federal, state, and local taxes
               required by law to be withheld with respect to any grant,
               exercise, or payment made under or as a result of this Plan; and

        B.     In the case of any taxable event hereunder, a Participant may
               elect, subject to the approval in advance by the Committee, to
               satisfy the withholding requirement, if any, in whole or in part,
               by having the Company withhold Shares of Common Stock that would
               otherwise be transferred to the Participant having a Fair Market
               Value, on the date the tax is to be determined, equal to the
               minimum marginal tax that could be imposed on the transaction.
               All elections shall be made in writing and signed by the
               Participant.

XV.     EFFECTIVE DATE

        This Plan shall become effective upon adoption by the Board, provided
        that within one (1) year before or after such adoption by the Board (or
        within such earlier time period as may be required by the Exchange Act,
        if applicable) the Plan is approved by the stockholders of the Company.
        If such approval is not obtained, then this Plan and all Options granted
        hereunder shall be null and void ab initio.

XVI.    GOVERNING LAW

        This Plan shall be governed by the laws of the State of Delaware and
        construed in accordance therewith.

<PAGE>   15

Adopted this 8th day of November, 1999.

<PAGE>   16

                           CHATHAM TECHNOLOGIES, INC.
                        INCENTIVE STOCK OPTION AGREEMENT

        THIS AGREEMENT is made this ____________ day of _________________
between Chatham Technologies, Inc., a Delaware corporation (the "COMPANY"), and
______________ (the "EMPLOYEE").

        WHEREAS, the Company desires to grant to the Employee an option to
purchase shares of its common capital stock (the "SHARES") under the Company's
Stock Option Plan (the "PLAN") which has been (or will, within one year after
its adoption be) approved by its stockholders; and

        WHEREAS, the Company and the Employee understand and agree that any
terms used herein have the same meanings as in the Plan (the Employee being
referred to in the Plan as a "PARTICIPANT").

        NOW, THEREFORE, in consideration of the following mutual covenants and
for other good and valuable consideration, the parties agree as follows:

1.      GRANT OF INCENTIVE OPTION

        In consideration of the sum of $1 paid by the option holder to the
        Company (the receipt, adequacy and sufficiency of which the Company
        hereby acknowledges), the Company hereby grants to the Employee the
        right and option to purchase all or any part of an aggregate of
        _____________ Shares (the "OPTION") on the terms and conditions and
        subject to all the limitations set forth herein and in the Plan; which
        is incorporated herein--by reference: The Employee acknowledges receipt
        of a copy of the Plan and acknowledges that the definitive records
        pertaining to the grant of this Option, and exercises of rights
        hereunder, shall be retained by the Company. The Option granted herein
        is intended to qualify as an incentive stock option as defined in
        Section 422 of the Internal Revenue Code of 1986, as amended.

2.      PURCHASE PRICE

        The purchase price of the Shares subject to the Option shall be
        _____________________ Dollars ($_____________) per Share, the fair
        market value of the Shares as of the date of grant.

3.      EXERCISE OF OPTION

        Subject to the Plan and this Agreement, the Option shall be exercisable
as follows:

<PAGE>   17

                                                    EXERCISE PERIOD

<TABLE>
<CAPTION>
                                          Commencement                Expiration
        Number of Shares                      Date                       Date
        ----------------                  ------------                ----------
<S>                                       <C>                         <C>
</TABLE>

4.      EXERCISE OF OPTION AND ISSUANCE OF STOCK

        The Option may be exercised in whole or in part (to the extent that it
        is exercisable in accordance with its terms) by giving written notice
        (or any other approved form of notice) to the Company. Such written
        notice shall be signed by the person exercising the Option, shall state
        the number of Shares with respect to which the Option is being
        exercised, shall contain the warranty, if any, required under the Plan
        and shall specify a date (other than a Saturday, Sunday or legal
        holiday) as the date on which the Shares will be purchased, at the
        principal office of the Company during ordinary business hours, or at
        such other hour and place agreed upon by the Company and the person or
        persons exercising the Option, and shall otherwise comply with the terms
        and conditions of this Agreement and the Plan. On the date specified in
        such written notice (which date, may be extended by the Company, if any
        law or regulation requires the Company to take any action with respect
        to the Option Shares prior to the issuance thereof); the Company shall
        accept payment for the Option Shares and shall deliver to the Employee
        an appropriate certificate or certificates for the Shares as to which
        the Option was exercised.

        The Option price of any Shares shall be payable at the time of exercise
        as determined by the Company in its sole discretion either:

               (1)    in cash, by certified check or bank check, or by wire
                      transfer; or

               (2)    in any other manner permitted under Paragraph I of Article
                      V of the Plan; or

               (3)    any combination of (1) or (2) above.

        The Company shall pay all original issue taxes with respect to the
        issuance of Shares pursuant hereto and all other fees and expenses
        necessarily incurred by the Company in connection therewith. The holder
        of this Option shall have the rights of a stockholder only with respect
        to those Shares covered by the Option, which have been registered in the
        holder's name in the share register of the Company upon the due exercise
        of the Option.

5.      NON-ASSIGNABILTTY

        This Option shall not be transferable by the Employee and shall be
        exercisable only by the Employee, except as the Plan may otherwise
        provide.

<PAGE>   18

6.      NOTICES

        Any notices required or permitted by the terms of this Agreement or the
        Plan shall be given by registered or certified mail, return receipt
        requested, addressed as follows:

        To the Company:      Chatham Technologies, Inc.
                             12221 Merit Drive, Suite 400
                             Dallas, Texas 75251

        To the Employee:
                             ___________________________
                             ___________________________
                             ___________________________

        or to such other address or addresses of which notice in the same manner
        has previously been given. Any such notice shall be deemed to have been
        given when mailed in accordance with the foregoing provisions.

7.      GOVERNING LAW

        This Agreement shall be construed and enforced in accordance with the
        laws of the State of Delaware.

8.      BINDING EFFECT

        This Agreement shall (subject to the provisions of Section 5 hereof) be
        binding upon the heirs, executors, administrators, successors and
        assigns of the parties hereto.

IN WITNESS WHEREOF, the Company and Employee have caused this Agreement to be
executed on their behalf, by their duly authorized representatives, all on the
day and year first above written.

                                         CHATHAM TECHNOLOGIES, INC.

                                         By:
                                            ___________________________________
                                         Its:
                                             __________________________________

                                         ______________________________________
                                         Employee

<PAGE>   19

                           CHATHAM TECHNOLOGIES, INC.
                       NONSTATUTORY STOCK OPTION AGREEMENT

        THIS AGREEMENT is made this ____ day of ________________ between Chatham
Technologies, Inc., a Delaware corporation (the "COMPANY"), and
__________________ (the "OPTIONEE").

        WHEREAS, the Company desires to grant to the Optionee an option to
purchase shares of its common capital stock (the "SHARES") under the Company's
Stock Option Plan (the "PLAN"); and

        WHEREAS, the Company and the Optionee understand and agree that any
terms used herein have the same meanings as in the Plan (the Optionee being
referred to in the Plan as a "PARTICIPANT").

        NOW, THEREFORE, in consideration of the following mutual covenants and
for other good and valuable consideration, the parties agree as follows:

1.      GRANT OF OPTION

        In consideration of the sum of $1 paid by the option holder to the
        Company (the receipt, adequacy and sufficiency of which the Company
        hereby acknowledges), the Company hereby grants to the Optionee the
        right and option to purchase all or any part of an aggregate of
        ____________ Shares (the "OPTION") on the terms and conditions and
        subject to all the limitations set forth herein and in the Plan, which
        is incorporated herein by reference. The Optionee acknowledges receipt
        of a copy of the Plan and acknowledges that the definitive records
        pertaining to the grant of this Option, and exercises of rights
        hereunder, shall be retained by the Company. The Option granted herein
        is intended to be a Nonstatutory Option as defined in the Plan.

2.      PURCHASE PRICE

        The purchase price of the Shares subject to the Option shall be
        _____________ Dollars ($_______) per Share.

3.      EXERCISE OF OPTION

        Subject to the Plan and this Agreement, the Option shall be exercisable
as follows:

                                                    EXERCISE PERIOD

<TABLE>
<CAPTION>
                                          Commencement                Expiration
        Number of Shares                      Date                       Date
        ----------------                  ------------                ----------
<S>                                       <C>                         <C>
</TABLE>

<PAGE>   20

4.      EXERCISE OF OPTION AND ISSUANCE OF STOCK

        The Option may be exercised in whole or in part (to the extent that it
        is exercisable in accordance with its terms) by giving written notice
        (or any other approved form of notice) to the Company. Such written
        notice shall be signed by the person exercising the Option, shall state
        the number of Shares with respect to which the Option is being
        exercised, shall contain the warranty, if any, required under the Plan
        and shall specify a date (other than a Saturday, Sunday or legal
        holiday) as the date on which the Shares will be purchased, at the
        principal office of the Company during ordinary business hours, or at
        such other hour and place agreed upon by the Company and the person or
        persons exercising the Option, and shall otherwise comply with the terms
        and conditions of this Agreement and the Plan. On the date specified in
        such written notice (which date may be extended by the Company if any
        law or regulation requires the Company to take any action with respect
        to the Shares prior to the issuance thereof), the Company shall accept
        payment for the Shares and shall deliver to the Optionee an appropriate
        certificate or certificates for the shares as to which the Option was
        exercised.

        The Option price of any Shares shall be payable at the time of exercise
        as determined by the Company in its sole discretion either:

               (1)    in cash, by certified check or bank check, or by wire
                      transfer; or

               (2)    in any other manner permitted under Paragraph I of Article
                      V of the Plan; or

               (3)    any combination of (1) or (2) above.

        The Company shall pay all original issue taxes with respect to the
        issuance of Shares pursuant hereto and all other fees and expenses
        necessarily incurred by the Company in connection therewith. The holder
        of this Option shall have the rights of a stockholder only with respect
        to those Shares covered by the Option which have been registered in the
        holder's name in the share register of the Company upon the due exercise
        of the Option.

5.      NON-ASSIGNABILITY

        This Option shall not be transferable by the Optionee and shall be
        exercisable only by the Optionee, except as the Plan may otherwise
        provide.

6.      NOTICES

        Any notices required or permitted by the terms of this Agreement or the
        Plan shall be given by registered or certified mail, return receipt
        requested, addressed as follows:

<PAGE>   21

        To the Company:      Chatham Technologies, Inc.
                             12221 Merit Drive, Suite 400
                             Dallas, Texas 75251

        To the Optionee:
                             ___________________________
                             ___________________________
                             ___________________________

        or to such other address or addresses of which notice in the same manner
        has previously been given. Any such notice shall be deemed to have been
        given when mailed in accordance with the foregoing provisions.

7.      GOVERNING LAW

        This Agreement shall be construed and enforced in accordance with the
        laws of the State of Delaware.

8.      BINDING EFFECT

        This Agreement shall (subject to the provisions of Section 5 hereof) be
        binding upon the heirs, executors, administrators, successors and
        assigns of the parties hereto.

IN WITNESS WHEREOF, the Company and the Optionee have caused this Agreement to
be executed on their behalf, by their duly authorized representatives, all on
the day and year first above written.

                                    CHATHAM TECHNOLOGIES, INC.

                                    By:
                                       ________________________________________
                                    Its:
                                        _______________________________________

                                    ___________________________________________
                                    Optionee

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