Document:

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                                                                     EXHIBIT 4.2

                            SUBMICRON DESIGN, INC.

                        1996 DIRECTOR STOCK OPTION PLAN

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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     administered by the Board or a Committee.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       10<PAGE>

                                                                     EXHIBIT 4.3

                               ROCKETCHIPS, INC.

                     2000 NON-QUALIFIED STOCK OPTION PLAN

                                   SECTION 1

                                 DEFINED TERMS

     In addition to the other definitions contained herein, the following
definitions shall apply:

     1.1  Award.  The term "Award" shall mean any award or benefit granted in
accordance with the terms of the Plan.  Awards under the Plan may be in the form
of (i) Stock Options; (ii) Restricted Stock; and/or (iii) Tax Offset Payments.

     1.2  Board.  The term "Board" shall mean the Board of Directors of the
Company.
     1.3  Change in Control.  The term "Change in Control" shall mean:

          (a)  the acquisition by any person or group deemed a person under
               Sections 3(a)(9) and 13(d)(3) of the Exchange Act (other than the
               Company and its subsidiaries as determined immediately prior to
               that date) of beneficial ownership, directly or indirectly (with
               beneficial ownership determined as provided in Rule 13d-3, or any
               successor rule, under the Exchange Act), of a majority of the
               total combined voting power of all classes of Stock of the
               Company having the right under ordinary circumstances to vote at
               an election of the Board, if such person or group deemed a person
               prior to such acquisition was not a beneficial owner of at least
               five percent (5%) of such total combined voting power of the
               Company;

          (b)  the date of approval by the stockholders of the Company of an
               agreement providing for the merger or consolidation of the
               Company with another corporation or other entity where (x)
               stockholders of the Company immediately prior to such merger or
               consolidation would not beneficially own following such merger or
               consolidation shares entitling such stockholders to a majority of
               all votes (without consolidation of the rights of any class of
               stock to elect directors by a separate class vote) to which all
               stockholders of the surviving corporation would be entitled in
               the election of directors, or (y) where the members of the Board,
               immediately prior to such merger or consolidation, would not,
               immediately after such merger or consolidation, constitute a
               majority of the board of directors of the surviving corporation;
               or

          (c)  the sale of all or substantially all of the assets of the
               Company.
<PAGE>

     1.4  Code.  The term "Code" shall mean the Internal Revenue Code of 1986,
as amended.  A reference to any provision of the Code shall include reference to
any successor provision of the Code.

     1.5  Committee. The term "Committee" shall mean a committee described in
Section 6.

     1.6  Company.  The term "Company" shall mean RocketChips, Inc.

     1.7  Covered Shares.  The term "Covered Shares" shall mean the number of
shares of Stock that an Eligible Individual may purchase pursuant to an Option.

     1.8  Director.  The term "Director" shall mean a member of the Company's
Board.

     1.9  Eligible Individual.  The term "Eligible Individual" shall mean (a)
any common law employee, prospective employee, or officer of the Company, (b)
members of the Company's Board, (c) consultants and advisors to the Company and
any Related Company.  All Eligible Individuals must be natural persons who
provide bona fide services to the Company or a Related Company.  In addition,
the services provided to the Company or Related Company must not be in
connection with an offer or sale of securities in a capital raising transaction
and must not directly or indirectly promote or maintain a market for the
Company's Stock.  An Award may be granted to an Eligible Individual prior to the
date the Eligible Individual performs services for the Company or Related
Company, provided that such Award shall not become vested prior to the date the
Eligible Individual first performs such services.

     1.10  Exchange Act.  The term "Exchange Act" shall mean the Securities Act
of 1934, as amended.

     1.11  Exercise Price.  The term "Exercise Price" shall mean the exercise
price of each Option granted under Section 3 established by the Board and
determined by any reasonable method established by the Board at the time the
Option is granted.  The Exercise Price shall not be less than 85% of the Fair
Market Value of a share of Stock on the date of grant of such Option.

     1.12  Fair Market Value.  The term "Fair Market Value" of a share of Stock
on a given date shall mean the closing price of the share of Stock as reported
on the Nasdaq Stock Market on such date, if the share of Stock is then quoted on
the Nasdaq Stock Market or, if the market is closed on that date, the closing
price of the share of Stock on the previous trading day. If the Stock is not
listed on the Nasdaq Stock Market, Fair Market Value shall be determined in good
faith by the Board.

     1.13  Non-Employee Director. The term "Non-Employee Director" shall mean a
"non-employee director" as defined in Rule 16b-3(b)(3)(i) of the Exchange Act.

     1.14  Non-Qualified Stock Option Agreement. The term "Non-Qualified Stock
Option Agreement" or "Agreement" shall mean any written agreement evidencing the
terms and conditions of an NSO granted under the Plan. The Agreement shall be
subject to the terms and conditions of the Plan.

                                       2
<PAGE>

     1.15  Non-Qualified Stock Option.  The term "Non-Qualified Stock Option" or
"NSO" shall mean an Option that is not intended to satisfy the requirements
applicable to an "incentive stock option" described in Section 422(b) of the
Code. NSO grants may be awarded to any Eligible Individual.

     1.16  Option.  The term "Option" or "Stock Option" shall mean an NSO
granted pursuant to the Plan. The grant of an Option entitles the Eligible
Individual to purchase shares of Stock at an Exercise Price established by the
Committee.

     1.17  Performance Award.  A "Performance Award" shall mean an award or
grant of shares based upon the achievement of performance objectives, as
contemplated by Section 3.8.

     1.18  Plan.  The term "Plan" shall mean this 2000 Non-Qualified Stock
Option Plan.

     1.19  Related Company.  The term "Related Company" shall mean any
corporation other than the Company and any partnership, joint venture or other
entity in which the Company owns, directly or indirectly, at least a 20%
beneficial ownership interest.  A Related Company includes a subsidiary of the
Company and an unbroken chain of corporations beginning with the Company if each
of the corporations other than the last corporation in the unbroken chain owns
50% or more of the voting stock in one of the other corporations in such chain.

     1.20  Stock. The term "stock" shall mean shares of common stock, $.01 par
value, of the Company.

                                   SECTION 2

                                    PURPOSE

     The RocketChips, Inc. 2000 Non-Qualified  Stock Option Plan has been
established by RocketChips, Inc. to (i) attract and retain individuals eligible
to participate in the Plan; (ii) motivate Eligible Individuals, by means of
appropriate incentives, to achieve long-range goals; (iii) provide incentive
compensation opportunities that are competitive with those of other similar
companies; and (iv) further identify Eligible Individuals' interests with those
of the Company's other shareholders through compensation that is based on the
Company's common stock; and thereby promote the long-term financial interest of
the Company and any Related Company, including the growth in value of the
Company's equity and enhancement of long-term shareholder return.

                                   SECTION 3

                                GRANT OF AWARDS

     3.1  Participation.   Subject to the terms and conditions of the Plan,
the Board may determine and designate, from time to time, Eligible Individuals
who will be granted one or more

                                       3
<PAGE>

Awards under the Plan at the Exercise Price. In its sole discretion and without
shareholder approval, the Board may grant to an Eligible Individual any Award or
Awards permitted under the provisions of the Plan. The Exercise Price of an
Option granted under this Section 3 shall be established by the Board or shall
be determined by a method established by the Board at the time the Option is
granted, except that the Exercise Price shall not be less than 85% of the Fair
Market Value of a share of Stock on the date of grant. Awards may be granted as
alternatives to or replacement of Awards outstanding under the Plan, or any
other plan or arrangement of the Company or Related Company (including a plan or
arrangement of a business or entity, all or a portion of which is acquired by
the Company or a Related Company).

     3.2  Exercise of an Option.  An Option shall be exercisable in accordance
with such terms and conditions and during such periods as may be established by
the Board.  In no event shall any fraction of a share of Stock be issued upon
the exercise of an Option.  An Option shall be deemed exercised when the Company
receives (a) written notice of exercise from the person entitled to exercise the
Option and (b) full payment of the Exercise Price for the Covered Shares and all
applicable withholding taxes due upon such exercise.

     3.3  Payment of Option Exercise Price.  The payment of the Exercise Price
of an Option granted under this Section 3 shall be subject to the following:

          (a)  Subject to the following provisions of this Subsection 3.3(a),
               the full Exercise Price for shares of Stock purchased upon the
               exercise of any Option shall be paid at the time of such exercise
               (except that, in the case of an exercise arrangement approved by
               the Board and described in Subsection 3.3(c), payment may be made
               as soon as practicable after the exercise).

          (b)  Payment of the Exercise Price shall be made in such manner as the
               Board may provide in the Award, which may include cash (including
               cash equivalents), delivery of shares of Stock already owned by
               the Eligible Individual or subject to Awards hereunder (so-called
               "cashless" or "immaculate" exercise methods), and any other
               manner permitted by law and approved by the Board, or any
               combination of the foregoing.  If the Company determines that a
               Stock Option may be exercised using shares of Restricted Stock,
               then unless the Board provides otherwise, the shares received
               upon the exercise of a Stock Option which are paid for using
               Restricted Stock shall be restricted in accordance with the
               original terms of the Restricted Stock Award.

          (c)  An Eligible Individual may elect to pay the Exercise Price upon
               the exercise of an Option by irrevocably authorizing a third
               party to sell shares of Stock (or a sufficient portion of the
               shares) acquired upon exercise of the Option and remit to the
               Company a sufficient portion of the sale proceeds to pay the
               entire Exercise Price and any tax withholding resulting from such
               exercise.

     3.4  Settlement of Option.  Shares of Stock delivered pursuant to the
exercise of an Option shall be subject to such conditions, restrictions and
contingencies as the Board, in its discretion,  may establish in addition to
such conditions, restrictions, and contingencies set forth in the Agreement.

                                       4
<PAGE>

     3.5  Reload Options. The Board may grant "reload" options, pursuant to
the terms and conditions established by the Board and any applicable
requirements of Rule 16b-3 of the Exchange Act ("Rule 16b-3") or any other
applicable law.  The Eligible Individual would be granted a new Option when the
payment of the Exercise Price of a previously granted Option is made by the
delivery of shares of the Company's Stock owned by the Eligible Individual
pursuant to Section 3.3(b) hereof and/or when shares of the Company's Stock are
tendered or forfeited as payment of the amount to be withheld under applicable
income tax laws in connection with the exercise of an Option.  The new Option
would be an Option to purchase the number of shares not exceeding the sum of (i)
the number of shares of the Company's Stock provided as consideration upon the
exercise of the previously granted Option to which such "reload" option relates
and (ii) the number of shares of the Company's Stock tendered or forfeited as
payment of the amount to be withheld under applicable income tax laws in
connection with the exercise of the Option to which such "reload" option
relates.  "Reload" options may be granted with respect to Options granted under
this Plan.  Such "reload" options shall have a per share exercise price equal to
the Fair Market Value as of the date of grant of the new Option.

     3.6  Vesting. Eligible Individuals shall vest in all Options in accordance
with the terms and conditions of the Agreement entered into by and between the
Eligible Individual and the Company.

     3.7  Option Term.  The term of each Option shall be fixed by the Board. In
the event that the Plan is terminated pursuant to terms and conditions of
Section 7, the Plan shall remain in effect as long as any Awards under it are
outstanding.

     3.8  Performance Awards. The Board shall have the right to designate Awards
as "Performance Awards." The grant or vesting of a Performance Award shall be
subject to the achievement of performance objectives established by the Board
based on one or more of the following criteria, in each case applied to the
Company on a consolidated basis and/or to a business unit and which the Board
may use as an absolute measure, as a measure of improvement relative to prior
performance, or as a measure of comparable performance relative to a peer group
of companies: sales, operating profits, operating profits before interest
expenses and taxes, net earnings, earnings per share, return on equity, return
on assets, return on invested capital, total shareholder return, cash flow, debt
to equity ratio, market share, stock price, economic value added, and market
value added.

     3.9  Restricted Stock.  Subject to the following provisions, the Board may
grant Awards of Restricted Stock to an Eligible Individual in such form and on
such terms and conditions as the Board may determine:

          (a)  The Restricted Stock Award shall specify the number of shares of
               Restricted Stock to be awarded, the price, if any, to be paid by
               the Eligible Individual and the date or dates on which, or the
               conditions upon the satisfaction of which, the Restricted Stock
               will vest.  The grant and/or the vesting of Restricted Stock may
               be conditioned upon the completion of a specified period of
               service with the Company or a Related Company, upon the

                                       5
<PAGE>

               attainment of specified performance objectives or upon such other
               criteria as the Board may determine.

          (b)  Stock certificates representing the Restricted Stock awarded to
               an Eligible Individual shall be registered in the Eligible
               Individual's name, but the Board may direct that such
               certificates be held by the Company or its designee on behalf of
               the Eligible Individual.  Except as may be permitted by the
               Board, no share of Restricted Stock may be sold, transferred,
               assigned, pledged or otherwise encumbered by an Eligible
               Individual until such share has vested in accordance with the
               terms of the Restricted Stock Award.  At the time the Restricted
               Stock vests, a certificate for such vested shares shall be
               delivered to the Eligible Individual (or his or her designated
               beneficiary in the event of death), free of all restrictions.

          (c)  The Board may provide that the Eligible Individual shall have the
               right to vote or receive dividends on Restricted Stock.  Unless
               the Board provides otherwise, Stock received as a dividend on, or
               in connection with a stock split of, Restricted Stock shall be
               subject to the same restrictions as the Restricted Stock.

          (d)  Except as may be provided by the Board, in the event of an
               Eligible Individual's  termination of employment or relationship
               with the Company prior to all of his or her Restricted Stock
               becoming vested, or in the event any conditions to the vesting of
               Restricted Stock have not been satisfied prior to any deadline
               for the satisfaction of such conditions as set forth in the
               Restricted Stock Award, the shares of Restricted Stock which have
               not vested shall be forfeited, and the Board may provide that (i)
               any purchase price paid by the Eligible Individual be returned to
               the Eligible Individual or (ii) a cash payment equal to the
               Restricted Stock's fair market value on the date of forfeiture,
               if lower, be paid to the Eligible Individual.

          (e)  The Board may waive, in whole or in part, any or all of the
               conditions to receipt of, or restrictions with respect to, any or
               all of the Eligible Individual's Restricted Stock.

     3.10  Tax Offset Payments.  The Board may provide for a Tax Offset Payment
to be made by the Company to an Eligible Individual with respect to one or more
Awards granted under the Plan.  The Tax Offset Payment shall be in an amount
specified by the Board, which shall not exceed the amount necessary to pay the
federal, state, local and other taxes payable with respect to the applicable
Award, assuming that the Eligible Individual is taxed at the maximum tax rate
applicable to such income.  The Tax Offset Payment shall be paid solely in cash.

                                   SECTION 4

                         OPERATION AND ADMINISTRATION

                                       6
<PAGE>

     4.1  General.  The operation and administration of this Plan, including any
Awards granted under this Plan, shall be subject to the provisions of Section 4.

     4.2  Effective Date.  The Plan shall be effective as of March 6, 2000 (the
 "Effective Date").

     4.3  Shares Subject to Plan. The shares of Stock for which Awards may be
granted under this Plan shall be subject to the following:

          (a)  Subject to the following provisions of this Subsection 4.3, the
               maximum aggregate number of shares of Stock that may be issued
               and sold under the Plan shall be 1,000,000 shares of Stock.  The
               number of shares of Stock so reserved for issuance shall be
               subject to adjustment pursuant to Sections  4.3(b) and 4.3(d).
               The shares of Stock may be authorized, but unissued, or
               reacquired Stock.

          (b)  On January 1st of each year, commencing with year 2001, the
               aggregate number of shares of Stock that may be awarded under the
               Plan shall automatically increase by the lesser of (a) 300,000
               shares of Stock, (b) 3.5% of the outstanding shares of Stock on
               such date, or (c) a lesser amount determined by the Committee.

          (c)  To the extent an Award terminates without having been exercised,
               or shares awarded are forfeited, such shares shall again be
               available for issue under the Plan.  Shares of Stock equal in
               number to the shares surrendered in payment of the Exercise
               Price, and shares of Stock which are withheld in order to satisfy
               federal, state or local tax liability, shall not count against
               the maximum aggregate number of shares authorized to be issued
               pursuant to this Plan, and shall again be available for issuance.

          (d)  In the event of any merger, reorganization, consolidation, sale
               of substantially all assets, recapitalization, stock dividend,
               stock split, combination or reverse stock split, spin-off, split-
               up, split-off, distribution of assets or other change in
               corporate structure affecting the Stock, a substitution or
               adjustment, as may be determined to be appropriate by the Board
               in its sole discretion, shall be made in the aggregate number of
               shares reserved for issuance under the Plan, the number of shares
               as to which Awards may be granted to any individual in any fiscal
               year, the number of shares subject to outstanding awards and the
               amounts to be paid by Award holders or the Company, as the case
               may be, with respect to outstanding Awards; provided, however,
               that no such adjustment shall exceed the aggregate value of any
               outstanding Award prior to such substitution or adjustment.  The
               Board may make such other adjustments as it deems appropriate.

          (e)  No Eligible Individual shall be granted Options, Restricted
               Stock, or any combination thereof with respect to more than
               _____________ shares of

                                       7
<PAGE>

               Stock in any fiscal year (subject to adjustment as provided in
               Section 4.3(d).

     4.4  Securities Laws Restrictions.  Issuance of shares of Stock or other
amounts under the Plan shall be subject to the following:

          (a)  If at any time the Board determines that the issuance of Stock
               under the Plan is or may be unlawful under the laws of any
               applicable jurisdiction, the right to exercise any Stock Option
               or receive any Restricted Stock shall be suspended until the
               Board determines that such issuance is lawful.  The Company shall
               have no obligation to effect any registration of qualification of
               the Stock under federal or state laws.

          (b)  Any person exercising a Stock Option or receiving Restricted
               Stock shall make such representations (including representations
               to the effect that such person will not dispose of the Stock so
               acquired in violation of federal and state securities laws) and
               furnish such information as may, in the opinion of counsel for
               the Company, be appropriate to permit the Company to issue the
               Stock in compliance with applicable federal and state securities
               laws.  The Board may refuse to permit the exercise of a Stock
               Option or issuance of such Restricted Stock until such
               representations and information have been provided.

          (c)  The Company may place an appropriate legend evidencing any
               transfer restrictions on all shares of Stock issued under the
               Plan and may issue stop transfer instructions in respect thereof.

          (d)  To the extent that the Plan provides for issuance of stock
               certificates to reflect the issuance of shares of Stock, the
               issuance may be effected on a non-certificated basis, to the
               extent not prohibited by applicable law or the applicable rules
               of any stock exchange.

     4.5  Tax Withholding.  Each Eligible Individual shall, no later than the
date as of which the value of an Award first becomes includible in such person's
gross income for applicable tax purposes, pay, pursuant to such arrangements as
the Company may establish from time to time, any federal, state, local or other
taxes of any kind required by law to be withheld with respect to the Award.  The
obligations of the Company under the Plan shall be conditional on such payment,
and the Company (and, where applicable, any Related Company), shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Eligible Individual.

     4.6  Payments.  Awards may be settled in any of the methods described in
Section 3.4.  Any Award settlement, including payment deferrals, may be subject
to such conditions, restrictions and contingencies as the Board shall determine.
The Board may permit or require the deferral of any Award payment, subject to
such rules and procedures as it may establish, which may include provisions for
the payment or crediting of interest, or dividend equivalents, including
converting such credits into deferred Stock equivalents.  Each Related Company
shall be liable for payment of

                                       8
<PAGE>

cash due under the Plan with respect to any Eligible Individual to the extent
that such benefits are attributable to the services rendered for that Related
Company by the Eligible Individual. Any disputes relating to liability of a
Related Company for cash payments shall be resolved by the Board.

     4.7  Transferability.  Except as otherwise provided by the Board, Awards
under the Plan may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by beneficiary designation, will or by the
laws of descent and distribution.  If the Board makes an Award transferrable,
the Award Agreement shall set forth such additional terms and conditions
regarding transferability as the Board deems appropriate.

     4.8  Form and Time of Elections.  Unless otherwise specified herein, each
election required or permitted to be made by any Eligible Individual or other
person entitled to benefits under the Plan, and any permitted modification, or
revocation thereof, shall be in writing filed with the Board at such times, in
such form, and subject to such restrictions and limitations, not inconsistent
with the terms of the Plan, as the Board shall require.

     4.9  Agreement With Company.  An Award under the Plan shall be subject to
such terms and conditions, not inconsistent with the Plan, as the Board shall,
in its sole discretion, prescribe.  The terms and conditions of any Award to any
Eligible Individual shall be reflected in an Award Agreement executed by the
parties, a copy of which shall be provided to the Eligible Individual.

     4.10 Limitation of Implied Rights.

          (a)  Neither an Eligible Individual nor any other person shall, by
               reason of participation in the Plan, acquire any right in or
               title to any assets, funds or property of the Company or any
               Related Company whatsoever, including, without limitation, any
               specific funds, assets, or other property which the Company or
               any Related Company, in its sole discretion, may set aside in
               anticipation of a liability under the Plan.  An Eligible
               Individual  shall have only a contractual right to the Stock or
               amounts, if any, payable under the Plan, unsecured by any assets
               of the Company or any Related Company, and nothing contained in
               the Plan shall constitute a guarantee that the assets of the
               Company or any Related Company shall be sufficient to pay any
               benefits to any Eligible Individual.

          (b)  This Plan does not constitute a contract of employment, and
               selection as a Eligible Individual will not give the Eligible
               Individual the right to be retained in the employ of the Company
               or any Related Company, nor any right or claim to any future
               grants or to any benefit under the Plan, unless such right or
               claim has specifically accrued under the terms of the Plan.
               Except as otherwise provided in the Plan, no Award under the Plan
               shall confer upon an Eligible Individual any rights of a
               shareholder of the Company prior to the date on which the
               Eligible Individual fulfills all conditions for receipt of such
               rights.

                                       9
<PAGE>

     4.11 Evidence.  Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.

     4.12 Termination for Cause.  If the employment of an Eligible Individual
is terminated by the Company or a Related Company for "cause," then the Board
shall have the right to cancel any Options granted to the Eligible Individual
under the Plan.  The term "cause" shall mean (1) the Eligible Individual's
violation of any provision of any non-competition agreement or confidentiality
agreement with the Company; (2) an illegal or negligent action by the Eligible
Individual that materially and adversely affects the Company; (3) the Eligible
Individual's failure or refusal to perform his/her duties (except when prevented
by reason of illness or disability); or (4) conviction of the Eligible
Individual of a felony involving moral turpitude.

                                   SECTION 5

                               CHANGE IN CONTROL

     In the event of a Change in Control, if so determined by the Board and
specifically documented in either a special form of Award Agreement at the time
of grant or amendment to an existing Award Agreement, in each case on an
individual-by-individual basis:

          (a)  all or a portion (as determined by the Board) of outstanding
               Stock Options awarded to such individual under the Plan shall
               become fully exercisable and vested; and

          (b)  the restrictions applicable to all or a portion (as determined by
               the Board) of any outstanding Restricted Stock awards under the
               Plan held by an Eligible Individual shall lapse and such shares
               shall be deemed fully vested.

Notwithstanding the foregoing, no acceleration of vesting or termination of
restrictions on Restricted Stock shall occur if (a) all Awards are assumed by a
surviving corporation or its parent or (b) the surviving corporation or its
parent substitutes Awards with substantially the same terms for such Awards.
The Board shall have the right to cancel Awards in the event of a Change in
Control, provided that in exchange for such cancellation, the Eligible
Individual shall receive a cash payment equal to the Change in Control
consideration less the exercise price of the Awards.

                                   SECTION 6

                                   COMMITTEE

     6.1  Administration.  The Plan shall be administered by the Compensation
Committee of the Board or such other committee of Directors as the Board may
designate, which shall consist of not less than two Non-Employee Directors, and
the Committee may administer the Plan and exercise all of the rights and powers
granted to the Board hereunder, including, without limitation, the right to
grant Options pursuant to the Plan and to establish the Exercise Price as
provided in the Plan.  The

                                       10
<PAGE>

members of the Committee shall serve at the pleasure of the Board. To the extent
that the Board determines it to be desirable to qualify Awards granted hereunder
as "performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code. To the extent that
the Board determines it to be desirable to qualify Awards as exempt under Rule
16b-3, the Award transactions contemplated hereunder shall be structured to
satisfy the requirements for exemption under Rule 16b-3. All determinations made
by the Board pursuant to the provisions of the Plan shall be final and binding
on all persons, including the Company and Eligible Individuals. The Board may
administer the Plan or exercise any or all of the administration duties of the
Board at any time when a Committee meeting the requirements of this Section has
not been appointed or serving, and the Board may exempt Awards pursuant to Rule
16b-3(d)(1) of the Exchange Act.

     6.2  Powers of Board.  The Board shall have the following authority with
respect to Awards under the Plan:  to grant Awards; to adopt, alter and repeal
such administrative rules, guidelines and practices governing the Plan as it
shall deem advisable; to interpret the terms and provisions of the Plan and any
Award granted under the Plan; and to otherwise supervise the administration of
the Plan.  In particular, and without limiting its authority and powers, the
Board shall have the authority:

          (a)  to determine whether and to what extent any Award or combination
               of Awards will be granted hereunder;

          (b)  to select the Eligible Individuals to whom Awards will be
               granted;

          (c)  to determine the number of shares of Stock to be covered by each
               Award granted hereunder subject to the limitations contained
               herein;

          (d)  to determine the terms and conditions of any Award granted
               hereunder, including, but not limited to, any vesting or other
               restrictions based on such performance objectives and such other
               factors as the Board may establish, and to determine whether the
               performance objectives and other terms and conditions of the
               Award are satisfied;

          (e)  to determine the treatment of Awards upon the Eligible
               Individual's retirement, disability, death, termination for cause
               or other termination of employment or service;

          (f)  to determine that amounts equal to the amount of any dividends
               declared with respect to the number of shares covered by an Award
               (i) will be paid to the Eligible Individual currently or (ii)
               will be deferred and deemed to be reinvested or (iii) will
               otherwise be credited to the Eligible Individual or that the
               Eligible Individual has no rights with respect to such dividends;

                                       11
<PAGE>

          (g)  to amend the terms of any Award, prospectively or retroactively;
               provided, however, that no amendment shall impair the rights of
               the Eligible Individual without his or her written consent; and

          (h)  to substitute new Stock Options for previously granted Stock
               Options, or for options granted under other plans or agreements,
               in each case including previously granted options having higher
               option prices.

Determinations by the Board under the Plan relating to the form, amount, and
terms and conditions of Awards need not be uniform, and may be made selectively
among Eligible Individuals who receive Awards under the Plan, whether or not
such Eligible Individuals are similarly situated.

     6.3  Delegation by Board.  Except to the extent prohibited by applicable
law or the applicable rules of a stock exchange, the Board may allocate all or
any portion of its responsibilities and powers to any one or more of its members
and may delegate all or any part of its responsibilities and powers to any
person or persons selected by it.  Any such allocation or delegation may be
revoked by the Board at any time.

     6.4  Information to be Furnished to Board.  The Company and any Related
Company shall furnish the Board with such data and information as it determines
may be required for it to discharge its duties.  The records of the Company and
any Related Company as to an Eligible Individual's employment, termination of
employment, leave of absence, reemployment and compensation shall be conclusive
on all persons unless determined to be incorrect.  Eligible Individuals and
other persons entitled to benefits under the Plan must furnish the Board such
evidence, data or information as the Board considers desirable to carry out the
terms of the Plan.

     6.5  Non-Liability of Board and Committee.  No member of the Board or the
Committee, nor any officer or employee of the Company acting on behalf of the
Board or the Committee, shall be personally liable for any action, determination
or interpretation taken or made with respect to the Plan, and all members of the
Board or the Committee and all officers or employees of the Company acting on
their behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Company with respect to any such action, determination or
interpretation.

                                   SECTION 7

                           AMENDMENT AND TERMINATION

     The Board may, at any time, amend or terminate the Plan, provided that no
amendment or termination may, in the absence of written consent to the change by
the affected Eligible Individual (or, if the Eligible Individual is not then
living, the affected beneficiary), adversely affect the rights of any Eligible
Individual or beneficiary under any Award granted under the Plan prior to the
date such amendment is adopted by the Board; provided that adjustments made
pursuant to Subsection 4.3(d) shall not be subject to the foregoing limitations
of this Section 7.  An amendment shall be subject to approval by the Company's
shareholders only to the extent required by applicable laws, regulations or
rules of a stock exchange or similar entity.

                                       12
<PAGE>

                                   SECTION 8

                              INVESTMENT PURPOSES

     Unless a registration statement under the Securities Act of 1933, as
amended (the "Act") is in effect with respect to Stock to be purchased upon
exercise of Options to be granted under the Plan, the Company shall require that
the Eligible Individual agree with and represent to the Company in writing that
he or she is acquiring such shares of Stock for the purpose of investment and
with no present intention to transfer, sell or otherwise dispose of such shares
of Stock other than by transfers which may occur by will or by the laws of
descent and distribution, and no shares of Stock may be transferred unless, in
the opinion of counsel to the Company, such transfer would be in compliance with
applicable securities laws.  In addition, unless a registration statement under
the Act is in effect with respect to the Stock to be purchased under the Plan,
each certificate representing any shares of Stock issued to the Eligible
Individual hereunder shall have endorsed thereon a legend in substantially the
following form:

     THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED WITHOUT
     REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
     "ACT") AND WITHOUT REGISTRATION UNDER ANY APPLICABLE STATE
     SECURITIES LAWS, IN RELIANCE UPON EXEMPTION(S) CONTAINED THEREIN.
     NO TRANSFER OF THESE SHARES OR ANY INTEREST THEREIN MAY BE MADE
     EXCEPT PURSUANT TO EFFECTIVE REGISTRATION UNDER SAID LAWS UNLESS
     THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO IT
     THAT SUCH TRANSFER OR DISPOSITION DOES NOT REQUIRE REGISTRATION
     UNDER SAID LAWS AND, FOR ANY SALES UNDER RULE 144 OF THE ACT,
     SUCH EVIDENCE AS IT SHALL REQUEST FOR COMPLIANCE WITH THAT RULE,
     OR APPLICABLE STATE SECURITIES LAWS.

                                   SECTION 9

                              GENERAL PROVISIONS

     9.1  Award Agreements.  No Eligible Individual will have rights under an
Award granted to such Eligible Individual unless and until an Agreement has been
duly executed on behalf of the Company and the Eligible Individual.

     9.2  No Limit on Other Compensation Arrangements.  Nothing contained in the
Plan shall prevent the Company or any Related Company from adopting or
continuing in effect other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable only in specific
cases.

                                       13
<PAGE>

     9.3  Headings.  The headings of the sections and subsections of this Plan
are intended for the convenience of the parties only and shall in no way be held
to explain, modify, construe, limit, amplify or aid in the interpretation of the
provisions hereof.

     9.4  Beneficiaries.  An Eligible Individual may, from time to time, name
any beneficiary or beneficiaries (who may be named contingently or successively)
to whom any benefit under the Plan may be paid or transferred in case of death.
Each designation will revoke all prior designations, shall be in a form
prescribed by the Board, and will be effective only when filed by the Eligible
Individual in writing with the Board during his or her lifetime. In the absence
of any such designation, benefits outstanding at the Eligible Individual's death
shall be paid or transferred to his or her estate. There shall be no third party
beneficiaries of or to this Plan. Any beneficiary of the Eligible Individual
shall have only a claim to such benefits as may be determined to be payable
hereunder, if any, and shall not, under any circumstances other than the right
to claim such benefits, be deemed a third party beneficiary of or to this Plan.

     9.5  Governing Law.  The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Minnesota,
except to the extent preempted by federal law, without regard to the principles
of comity or the conflicts of law provisions of any jurisdiction.

                                       14

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