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                                                                    EXHIBIT 10.6

                                  PEMSTAR INC.
                        2000 EMPLOYEE STOCK PURCHASE PLAN

                             ARTICLE I. INTRODUCTION

         Section 1.01 Purpose. The purpose of the Pemstar Inc. 2000 Employee
Stock Purchase Plan ("the Plan") is to provide employees of Pemstar, a Minnesota
corporation (the "Company"), with an opportunity to share in the ownership of
the Company by providing them with a convenient means for regular and systematic
purchases of the Company's Common Stock, $.01 par value, and thus, to develop a
stronger incentive to work for the continued success of the Company.

         Section 1.02 Rules of Interpretation. It is intended that the Plan be
an "employee stock purchase plan" as defined in Section 423(b) of the Internal
Revenue Code of 1986, as amended (the "Code"), and Treasury Regulations
promulgated thereunder. Accordingly, the Plan shall be interpreted and
administered in a manner consistent therewith if so approved. All Participants
in the Plan will have the same rights and privileges consistent with the
provisions of the Plan.

         Section 1.03 Definitions. For purposes of the Plan, the following terms
will have the meanings set forth below:

                  (a) "Acceleration Date" means the date of shareholder approval
         or approval by the Company's Board of Directors, if shareholder
         approval is not required, of (i) any consolidation or merger of the
         Company in which the Company is not the continuing or surviving
         corporations or pursuant to which Company Common Shares would be
         converted into cash, securities or other property, other than a merger
         of the Company in which shareholders of the Company immediately prior
         to the merger have the same proportionate share ownership in the
         surviving corporation immediately after the merger; (ii) any sale,
         exchange or other transfer (in one transaction or a series of related
         transactions) of all or substantially all of the assets of the Company;
         or (iii) any plan of liquidation or dissolution of the Company.

                  (b) "Affiliate" means any subsidiary corporation of the
         Company, as defined in Section 424 (f) of the Code, whether now or
         hereafter acquired or established.

                  (c) "Committee" means the committee described in Section
         10.01.

                  (d) "Common Shares" means the Company's Common Stock, $.01 par
         value, as such Shares may be adjusted for changes in the Shares or the
         Company as contemplated by Article XI herein.

                  (e) "Company" means Pemstar Inc., a Minnesota corporation, any
         subsidiary of the Company and any successors to the Company by merger
         or consolidation as contemplated by Article XI herein.

                  (f) "Current Compensation" means all regular wage, salary and
         commission payments paid by the Company to a Participant in accordance
         with the terms of his or her employment, including bonus payments,
         overtime pay and all other forms of special compensation.

                  (g) "Eligible Employee" means an employee of the Company or a
         Participating Affiliate, excluding employees whose customary employment
         is less than an average of 20 hours per week.

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                  (h) "Employee Account" means the account maintained on the
         books and records of the Company recording the amount received from
         each Participant through payroll deductions made under the Plan and any
         additional contributions made pursuant to Section 3.05.

                  (i) "Fair Market Value" as of a given date means the fair
         market value of the Common Shares determined by (i) if the Common
         Shares are then quoted on the NASDAQ National Market System, the
         average of the high and low sales price as reported on the NASDAQ
         National Market System on such date or, if the NASDAQ National Market
         System is not open for trading on such date, on the most recent
         preceding date when it is open for trading, (ii) if the Common Shares
         are then quoted on the National Association of Securities Dealers
         Automated Quotation System ("Nasdaq") on such date, the average of the
         high and low sales prices as reported by Nasdaq on such date or, if
         Nasdaq is not open for trading on such date, on the most recent
         preceding date when it is open for trading, (iii) if the Common Shares
         are then quoted on any national securities exchange, the average of the
         high and low sales price as reported by such national securities
         exchange on such date or, if such national securities exchange is not
         open for trading on such date, on the most recent preceding date when
         it is open for trading, or (iv) if the Common Shares are not traded on
         an established securities market, the Committee shall make a good faith
         attempt to satisfy the requirements of this Section 1.03(i) and in
         connection therewith shall take such action as it deems necessary or
         advisable.

                  (j) "Participant" means an Eligible Employee who is eligible
         to participate in the Plan under Section 2.01 and who has elected to
         participate in the Plan.

                  (k) "Participating Affiliate" means an Affiliate which has
         been designated by the Committee in advance of the Purchase period in
         question as a corporation whose Eligible Employees may participate in
         the Plan

                  (l) "Plan" means the Pemstar Inc. 2000 Employee Stock Purchase
         Plan, as the same may be amended, the provisions of which are set forth
         herein.

                  (m) "Purchase Period" means a four-week period, the first of
         which shall begin Saturday, December 30, 2000 (with enrollment due by
         Friday, December 15, 2000 for the first Purchase Period) and shall end
         on Friday, January 26, 2001, and each subsequent Purchase Period shall
         be a similar four-week period beginning on the Saturday following the
         end of the preceding Purchase Period and ending on the Friday four
         weeks following.

                    ARTICLE II. ELIGIBILITY AND PARTICIPATION

         Section 2.01 Eligible Employees. All Eligible Employees shall be
eligible to participate in the Plan beginning on the first day of the first
Purchase Period to commence after such person becomes an Eligible Employee.
Subject to the provisions of Article VI, each such employee will continue to be
eligible to participate in the Plan so long as he or she remains an Eligible
Employee.

         Section 2.02 Election to Participate. An Eligible Employee may elect to
participate in the Plan for a given Purchase Period by filing with the Company,
in advance of the Purchase Period and in accordance with such terms and
conditions as the Committee in its sole discretion may impose, a form provided
by the Company for such purpose (which authorizes regular payroll deductions
from Current Compensation beginning with the first payday in the Purchase Period
and continuing until the employee withdraws from the Plan or ceases to be
eligible to participate in the Plan.)

         Section 2.03 Limits on Shares Purchase. No employee shall be granted
any right to purchase Common Shares hereunder if such employee, immediately
after such a right to purchase is granted, would own, directly or indirectly,
within the meaning of Section 423(b)(3) and Section 424(d) of the Code, Common
Shares possessing 5% or more of the total combined voting power or value of all
the classes of the capital shares of the Company or of all Affiliates.

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         Section 2.04 Voluntary Participation. Participation in the Plan on the
part of a Participant is voluntary and such participation is not a condition of
employment nor does participation in the Plan entitle a Participant to be
retained as an employee.

                   ARTICLE III. PAYROLL DEDUCTIONS, ADDITIONAL
                       CONTRIBUTIONS AND EMPLOYEE ACCOUNT

         Section 3.01 Deduction from Pay. The form described in Section 2.02
will permit a Participant to elect payroll deductions of not less than 3% and
not more than 10% of such Participant's Current Compensation for each pay
period, subject to such other limitations as the Committee in its sole
discretion may impose.

         Section 3.02 Interest. No interest will be paid with respect to
contributions to a Participant's Employee Account.

         Section 3.03 Credit to Account. Payroll deductions will be credited to
the Participant's Employee Account on each payday.

         Section 3.04 Nature of Account. The Employee Account is established
solely for accounting purposes, and all amounts credited to the Employee Account
will remain part of the general assets of the Company or the Participating
Affiliate (as the case may be).

         Section 3.05 Additional Contributions. A Participant may make an
additional cash payment of $50.00 to $1000.00 per Purchase Period into the
Employee Account other than the payroll deductions made pursuant to the Plan,
subject to the cash value and share number limitations described in this Plan.

                      ARTICLE IV. RIGHT TO PURCHASE SHARES

         Section 4.01 Number of Shares. Each Participant will have the right to
purchase on the last business day of the Purchase Period all, but not less than
all, of the largest number of whole and/or fractional Common Shares that can be
purchased at the price specified in Section 4.02 with the entire credit balance
in the Participant's Employee Account, subject to the limitations that:

                  (a) in accordance with Section 423 of the Code, no more than
         10,000 Common Shares may be purchased under the Plan by any one
         Participant for a given Purchase Period; and

                  (b) in accordance with Section 423(b)(8) of the Code, no more
         than $25,000 in Fair Market Value (determined at the beginning of each
         Purchase Period) of Common Shares and other shares may be purchased
         under the Plan and all other employee share purchase plans (if any) of
         the Company and the Affiliates by any one Participant for any calendar
         year.

         Section 4.02 Purchase Price. The purchase price for any Purchase Period
shall be as follows:

                  (a) for shares purchased with payroll deductions made pursuant
         to Section 3.01, the purchase price shall be 85% of the Fair Market
         Value of the Common Shares on the last business day of each Purchase
         Period, in each case rounded up to the next higher full cent.

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                  (b) for shares purchased with additional contributions made
         pursuant to Section 3.05, the purchase price shall be the Fair Market
         Value of the Common Shares on the last business day of the Purchase
         Period, in each case rounded up to the next higher full cent.

                          ARTICLE V. EXERCISE OF RIGHT

         Section 5.01 Purchase of Shares. On the last day of a Purchase Period,
the entire credit balance in each Participant's Employee Account will be used to
purchase the largest number of whole and/or fractional Common Shares purchasable
with such amount (subject to the limitations of Section 4.01), unless the
Participant has filed with the Company, in advance of that date and subject to
such terms and conditions as the Committee in its sole discretion may impose, a
form provided by the Company which requests the distribution of the entire
credit balance in cash.

         Section 5.02 Notice of Acceleration Date. The Company shall use its
best efforts to notify each Participant in writing at least ten days prior to
any Acceleration Date that the then current Purchase Period will end on such
Acceleration Date.

           ARTICLE VI. WITHDRAWAL FROM PLAN; TERMINATION OF EMPLOYMENT

         Section 6.01 Voluntary Withdrawal. A Participant may, in accordance
with such terms and conditions as the Committee in its sole discretion may
impose, withdraw from the Plan and cease making payroll deductions by filing
with the Company a form provided for this purpose. In such event, the entire
credit balance in the Participant's Employee Account will be paid to the
Participant in cash within 30 days. A Participant who withdraws from the Plan
will not be eligible to reenter the Plan until the beginning of the next
Purchase Period following the date of such withdrawal.

         Section 6.02 Death. Subject to such terms and conditions as the
Committee in its sole discretion may impose, upon the death of a Participant, no
further amounts shall be credited to the Participant's Employee Account.
Thereafter, on the last business day of the Purchase Period during which such
Participant's death occurred and in accordance with Section 5.01, the entire
credit balance in such Participant's Employee Account will be used to purchase
Common Shares, unless such Participant's estate has filed with the Company, in
advance of that day and subject to such terms and conditions as the Committee in
its sole discretion may impose, a form provided by the Company which elects to
have the entire credit balance in such Participant's Employee Account
distributed in cash within 30 days after the end of the Purchase Period or at
such earlier time as the Committee in its sole discretion may decide.

         Section 6.03 Termination of Employment.

                  (a) Subject to such terms and conditions as the Committee in
         its sole discretion may impose, upon a Participant's normal or early
         retirement with the consent of the Company under any pension or
         retirement plan of the Company or Participating Affiliate, no further
         amounts shall be credited to the Participant's Employee Account.
         Thereafter, on the last business day of the Purchase Period during
         which such Participant's approved retirement occurred and in accordance
         with Section 5.01, the entire credit balance in such Participant's
         Employee Account will be used to purchase Common Shares, unless such
         Participant has filed with the Company, in advance of that day and
         subject to such terms and conditions as the Committee in its sole
         discretion may impose, a form provided by the Company which elects to
         receive the entire credit balance in such Participant's Employee
         Account in cash within 30 days after the end of the Purchase Period,
         provided that such Participant shall have no right to purchase Common
         Shares in the event that the last day of such a Purchase Period occurs
         more than one month following the termination of such Participant's
         employment with the Company by reason of such an approved retirement.

                  (b) In the event of any other termination of employment (other
         than death) with the Company or a Participating Affiliate,
         participation in the Plan will cease on the date the

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         Participant ceases to be an Eligible Employee for any reason. In such
         event, the entire credit balance in such Participant's Employee Account
         will be paid to the Participant in cash within 30 days. For purposes of
         this Section 6.03, a transfer of employment to any Affiliate, or a
         leave of absence which has been approved by the Committee, will not be
         deemed a termination of employment as an Eligible Employee.

                         ARTICLE VII. NONTRANSFERABILITY

         Section 7.01 Nontransferable Right to Purchase. The right to purchase
Common Shares hereunder may not be assigned, transferred, pledged or
hypothecated (whether by operation of law or otherwise), except as provided in
Section 6.02, and will not be subject to execution, attachment or similar
process. Any attempted assignment, transfer, pledge, hypothecation or other
disposition or levy of attachment or similar process upon the right to purchase
will be null and void and without effect.

         Section 7.02 Nontransferable Account. Except as provided in Section
6.02, the amounts credited to an Employee Account may not be assigned,
transferred, pledged or hypothecated in any way, and any attempted assignment,
transfer, pledge, hypothecation or other disposition of such amounts will be
null and void and without effect.

                        ARTICLE VIII. SHARE CERTIFICATES

         Section 8.01 Issuance of Purchased Shares. Promptly after the last day
of each Purchase Period and subject to such terms and conditions as the
Committee in its sole discretion may impose, the Company will cause the Common
Shares then purchased pursuant to Section 5.01 to be issued to or for the
benefit of the Participant and held in the Plan pursuant to Section 8.05.

         Section 8.02 Securities Laws. The Company shall not be required to
issue or deliver any certificate representing Common Shares prior to
registration under the Securities Act of 1933, as amended, or registration or
qualification under any state law if such registration is required. The Company
shall use its best efforts to accomplish such registration (if and to the extent
required) not later than a reasonable time following the Purchase Period, and
delivery of certificates may be deferred until such registration is
accomplished.

         Section 8.03 Completion of Issuance. A Participant shall have no
interest in the Common Shares purchased until a certificate representing the
same is issued to or for the benefit of the Participant.

         Section 8.04 Form of Ownership. The certificates representing Common
Shares issued under the Plan will be registered in the name of the Participant
or jointly in the name of the Participant and another person, as the Participant
may direct on a form provided by the Company.

         Section 8.05 Delivery. Subject to such terms and conditions as the
Committee in its sole discretion may impose, by filing a form provided by the
Company for such purpose, a Participant may elect to have the Company cause to
be delivered to or for the benefit of the Participant, a certificate for the
number of whole Common Shares purchased pursuant to Section 5.01, and cash for
the number of fractional Common Shares. The election notice will be processed as
soon as practicable following receipt.

                    ARTICLE IX. EFFECTIVE DATE, AMENDMENT AND
                               TERMINATION OF PLAN

         Section 9.01 Effective Date. The Plan was approved by the Board of
Directors and shall be approved by the shareholders of the Company within twelve
(months) thereof. In the event that the Plan is not so approved by the
shareholders of the Company, for any reason, it shall then be of no force or
effect

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whatsoever, and no Common Shares shall be purchased hereunder and any and all
amounts credited to an Employee Account for any Purchase Period which commences
prior to such shareholder approval shall be returned.

         Section 9.02 Plan Commencement. The initial Purchase Period under the
Plan will commence on a date designated by the Committee.

         Section 9.03 Powers of Board. The Board of Directors may amend or
discontinue the Plan at any time. No amendment or discontinuation of the Plan,
however, shall without shareholder approval be made that: (i) requires
shareholder approval under any rules or regulations of the National Association
of Securities Dealers, Inc. or any securities exchange that are applicable to
the Company or (ii) permit the issuance of Common Shares before payment therefor
in full.

         Section 9.04 Automatic Termination. The Plan shall automatically
terminate when all of the Common Shares provided for in Section 10.03 have been
sold.

                            ARTICLE X. ADMINISTRATION

         Section 10.01 The Committee. The Plan shall be administrated by a
committee (the "Committee") of two or more directors of the Company, none of
whom shall be officers or employees of the Company. The members of the Committee
shall be appointed by and serve at the pleasure of the Board of Directors.

         Section 10.02 Powers of Committee. Subject to the provisions of the
Plan, the Committee shall have full authority to administer the Plan, including
authority to interpret and construe any provision of the Plan, to establish
deadlines by which the various administrative forms must be received in order to
be effective, and to adopt such other rules and regulations for administering
the Plan as it may deem appropriate. The Committee shall have full and complete
authority to determine whether all or any part of the Common Shares acquired
pursuant to the Plan shall be subject to restrictions on the transferability
thereof any other restrictions affecting in any manner a Participant's rights
with respect thereto but any such restrictions shall be contained in the form by
which a Participant elects to participate in the Plan pursuant to Section 2.02.
Decisions of the Committee will be final and binding on all parties who have an
interest in the Plan.

         Section 10.03 Shares to be Sold. The Common Shares to be issued and
sold under the Plan shall be authorized but unissued shares. Except as provided
in Section 11.01, the aggregate number of Common Shares to be sold under the
Plan will not exceed 1,000,000 shares.

         Section 10.04 Notices. Notices to the Committee should be addressed as
follows:

                                  Pemstar Inc.
                            3535 Technology Drive NW
                           Rochester, Minnesota 55901

                       ARTICLE XI. ADJUSTMENT FOR CHANGES
                              IN SHARES OR COMPANY

         Section 11.01 Share Dividend or Reclassification. If the outstanding
Common Shares are increased, decreased, changed into or exchanged for a
different number or kind of securities of the Company, or shares of a different
par value or without par value, through reorganization, recapitalization,
reclassification, share dividend, share split, amendment to the Company's
Articles of Incorporation, reverse share split or otherwise, other than by a
sale of Common Stock by the Company, an appropriate adjustment shall be made in
the maximum numbers and kind of securities to be purchased under the Plan with a
corresponding adjustment in the purchase price to be paid therefor.

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         Section 11.02 Merger or Consolidation. If the Company is merged into or
consolidated with one or more corporations during the term of the Plan,
appropriate adjustments will be made to give effect thereto on an equitable
basis in terms of issuance of shares of the corporation surviving the merger or
of the consolidated corporation, as the case may be.

                           ARTICLE XII. APPLICABLE LAW

         Rights to purchase Common Shares granted under the Plan shall be
construed and shall take effect in accordance with the laws of the State of
Minnesota.

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                                                                    EXHIBIT 10.7

                                  PEMSTAR INC.
                             2002 STOCK OPTION PLAN

1.   Purpose of the Plan.
     -------------------

     This Plan shall be known as the "PEMSTAR INC. 2002 Stock Option Plan" and
is hereinafter referred to as the "Plan." The purpose of the Plan is to aid in
maintaining and developing personnel capable of assuring the future success of
PEMSTAR INC., a Minnesota corporation (the "Company"), to offer such personnel
additional incentives to put forth maximum efforts for the success of the
business, and to afford them an opportunity to acquire a proprietary interest in
the Company through stock options as provided herein. Options granted under this
Plan may be either incentive stock options ("Incentive Stock Options") within
the meaning of section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or options which do not qualify as Incentive Stock Options.

2.   Stock Subject to the Plan.
     -------------------------

     Subject to the provisions of section 12, the shares of stock to be subject
to options under the Plan shall be shares of the Company's authorized common
stock. Such shares may be either authorized but unissued shares, or issued
shares which have been reacquired by the Company. Subject to the adjustment as
provided in section 12, the maximum number of shares on which options may be
exercised under this Plan shall be One Million Five Hundred Thousand Shares
(1,500,000) shares. If an option under the Plan expires, or for any reason is
terminated or unexercised with respect to any shares, such shares shall again be
available for options thereafter granted during the term of the Plan.

3.   Administration of Plan.
     ----------------------

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

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

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the foregoing matters, unless otherwise disapproved by the Board of Directors of
the Company, shall be final and conclusive.

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

4.   Eligibility.
     -----------

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

5.   Price.
     -----

     The option price for all Incentive Stock Options granted under the Plan
shall be determined by the Committee but shall not be less than 100% of the fair
market value of shares of the Company's common stock at the date of granting of
such option. The option price for options granted under the Plan which do not
qualify as Incentive Stock Options shall also be determined by the Committee.
For purposes of the preceding sentence and for all other valuation purposes
under the Plan, the fair market value of the Company's common stock shall be as
reasonably determined by the Committee. If on the date of grant of any option
granted under the Plan, the common stock of the Company is not publicly traded,
the Committee shall make a good faith attempt to satisfy the option price
requirement of this section 5 and in connection therewith shall take such action
as it deems necessary or advisable.

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6.   Term.
     ----

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

7.   Exercise of Option.
     ------------------

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

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

     (c) An optionee electing to exercise an option shall give written notice to
the Company of such election and of the number of shares subject to such
exercise. The full purchase price of such shares shall be tendered with such
notice of exercise. Payment shall be made to the Company either in cash
(including check, bank draft or money order), or, at the discretion of the
Committee, (i) by delivering certificates for shares of the Company's common
stock already owned by the optionee having a fair market value equal to the full
purchase price of the shares, or (ii) a combination of cash and such shares, or
(iii) by delivering the optionee's full recourse promissory note, which shall
provide for interest at a rate not less than the minimum rate required to avoid
imputation of income, original issue discount or a below-market-rate loan
pursuant to sections 483, 1274 or 7872 of the Code or any successor provisions
thereto; provided, however, that an optionee shall not be entitled to tender
shares of the Company's common stock pursuant to successive, substantially
simultaneous exercises of options granted under this or any other stock option
plan of the Company. The fair market value of such shares shall be determined as
provided in section 5. Until such person has been issued a certificate or
certificates for the shares subject to such exercise, he shall possess no rights
as a stockholder with respect to such shares.

8.   Additional Restrictions.
     -----------------------

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

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9.   Effect of Termination of Employment or Death.
     --------------------------------------------

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

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

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

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

10.  Ten Percent Shareholder Rule.
     ----------------------------

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

11.  Non-Transferability.
     -------------------

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

                                       4

<PAGE>

12.  Dilution or Other Adjustments.
     -----------------------------

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

13.  Amendment or Discontinuance of Plan.
     -----------------------------------

     The Board of Directors may amend or discontinue the Plan at any time.
However, no amendment of the Plan shall, without stockholder approval: (i)
increase the maximum number of shares under the Plan as provided in section 2,
(ii) decrease the minimum option price provided in section 5, (iii) extend the
maximum option term under section 6, or (iv) materially modify the eligibility
requirements for participation in the Plan. The Board of Directors shall not
alter or impair any option theretofore granted under the Plan without the
consent of the holder of the option.

14.  Time of Granting.
     ----------------

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

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

16.  Effective Date and Termination of Plan.
     --------------------------------------

     (a) The Plan was approved by the Board of Directors on October 25, 2001,
and shall be approved by the shareholders of the Company within twelve (12)
months thereof.

     (b) Unless the Plan shall have been discontinued as provided in section 13,
the Plan shall terminate October 25, 2011. No option may be granted after such
termination, but termination of the Plan shall not, without the consent of the
optionee, alter or impair any rights or obligations under any option theretofore
granted.

                                       5

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