Exhibit 10.20

ALTERA CORPORATION

2005 EQUITY INCENTIVE PLAN

(as amended and restated May 13, 2008)

1. PURPOSE. The purpose of the Altera Corporation 2005 Equity Incentive Plan
(the “Plan”) is to provide incentives to attract, retain and motivate eligible
persons whose present and potential contributions are important to the success
of the Company and its Subsidiaries by offering them an opportunity to
participate in the Company’s future performance through awards of Options,
Restricted Stock, Stock Bonuses, Stock Appreciation Rights (“SARs”) and
Restricted Stock Units (“RSUs”). Capitalized terms not defined in the text are
defined in Section 26.

2. SHARES SUBJECT TO THE PLAN.

2.1 Number of Shares Available. Subject to Sections 2.2 and 21, 18,000,000
Shares are available for grant and issuance under the Plan plus any Shares
remaining available for grant under the Company’s (i) 1998 Director Stock Option
Plan and its (ii) 1996 Stock Option Plan (collectively, the “Prior Plans”) on
the Effective Date (as defined below). Shares subject to Awards that are
cancelled, forfeited, settled in cash or that expire by their terms, including
Shares subject to Awards granted under the Prior Plans that are outstanding on
the Effective Date, will be returned to the pool of Shares available for grant
and issuance under the Plan. Any Award other than an Option or a SAR shall
reduce the number of Shares available for issuance by 2.25 Shares. Awards issued
as an Option or a SAR shall reduce the number of Shares available for issuance
by the number of Shares underlying the Award, regardless of the number of Shares
actually issued upon exercise of the Award. No more than 3,000,000 Shares shall
be issued as ISOs. The Company may issue Shares that are authorized but unissued
shares pursuant to the Awards granted under the Plan. The Company will reserve
and keep available a sufficient number of Shares to satisfy the requirements of
all outstanding Awards granted under the Plan.

2.2 Adjustment of Shares. If the number of outstanding Shares is changed by a
stock dividend, recapitalization, stock split, reverse stock split, subdivision,
combination, reclassification or similar change in the capital structure of the
Company, without consideration, then (a) the number of Shares reserved for
issuance and future grant under the Plan set forth in Section 2.1; (b) the
Exercise Prices of and number of Shares subject to outstanding Options and SARs;
(c) the number of Shares subject to other outstanding Awards; (d) the maximum
number of shares that may be issued as ISOs set forth in Section 2.1; and
(e) the maximum number of shares that may be issued to an individual or to a new
employee in any one fiscal year set forth in Section 3, will be proportionately
adjusted, subject to any required action by the Board or the stockholders of the
Company and compliance with applicable securities laws; provided that fractions
of a Share will not be issued but will either be replaced by a cash payment
equal to the Fair Market Value of such fraction of a Share or will be rounded up
to the nearest whole Share, as determined by the Committee; and provided further
that the Exercise Price of any Option or SAR may not be decreased to below the
par value of the Shares.

3. ELIGIBILITY. ISOs may be granted only to employees (including officers and
directors who are also employees) of the Company or Subsidiary. All other Awards
may be granted to employees, officers, directors, consultants, independent
contractors and advisors of the Company or Subsidiary. The Committee (or its
designee under 4.1(c)) will from time to time determine in its sole discretion
and designate the eligible persons who will be granted Awards under the Plan.
The Plan is discretionary in nature, and the grant of Awards by the Committee is
voluntary and occasional. A person may be granted more than one Award under the
Plan. However, no person will be eligible to receive more than 2,000,000 Shares
issuable as Awards granted in any fiscal year, other than new employees of the
Company or Subsidiary (including new employees who are also officers and
directors of the Company or Subsidiary), who are eligible to receive up to a
maximum of an additional 2,000,000 Shares issuable as Awards granted in the
calendar year in which they commence their employment.

 

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4. ADMINISTRATION.

4.1 Committee Authority. The Plan shall be administered by the Committee.
Subject to the general purposes, terms and conditions of the Plan, the Committee
will have full power to implement and carry out the Plan. Without limiting the
previous sentence, the Committee will have the authority to:

 

  (a) construe and interpret the Plan, any Award Agreement and any other
agreement or document executed pursuant to the Plan;

 

  (b) prescribe, amend and rescind rules and regulations relating to the Plan or
any Award, including determining the forms and agreements used in connection
with the Plan; provided that the Committee may delegate to the Company’s legal
department the authority to approve revisions to the forms and agreements used
in connection with the Plan that are designed to facilitate Plan administration,
and that are not inconsistent with the Plan or with any resolutions of the
Committee relating to the Plan;

 

  (c) select persons to receive Awards; provided that the Committee may delegate
to one or more Executive Officers (who would also be considered “officers” under
Delaware law) the authority to grant an Award under the Plan to Participants who
are not Insiders;

 

  (d) determine the terms of Awards;

 

  (e) determine the number of Shares or other consideration subject to Awards;

 

  (f) determine whether Awards will be granted singly, in combination, or in
tandem with, in replacement of, or as alternatives to, other Awards under the
Plan or any other incentive or compensation plan of the Company or any
Subsidiary;

 

  (g) grant waivers of Plan or Award conditions;

 

  (h) determine the vesting, exercisability, transferability, and payment of
Awards;

 

  (i) correct any defect, supply any omission, or reconcile any inconsistency in
the Plan, any Award or any Award Agreement;

 

  (j) determine whether an Award has been earned;

 

  (k) amend the Plan;

 

  (l) to take any action consistent with the terms of the Plan, either before or
after an Award has been granted, which it deems necessary or advisable to comply
with any governmental laws or regulatory requirement of a foreign country,
including, but not limited to, modifying or amending the terms and conditions
governing any Awards or establishing any local country plans as sub-plans to
this Plan; or

 

  (m) make all other determinations necessary or advisable for the
administration of the Plan.

4.2 Committee Interpretation and Discretion. Any determination made by the
Committee with respect to any Award shall be made in its sole discretion at the
time of grant of the Award or, unless in contravention of any express term of
the Plan or Award, at any later time, and such determination shall be final and
binding on the Company and all persons having an interest in any Award under the
Plan. Any dispute regarding the interpretation of the Plan or any Award
Agreement shall be submitted by the Participant or Company to the Committee for
review. The resolution of such a dispute by the Committee shall be final and
binding on the Company and the Participant. The Committee may delegate to one or
more Executive Officers the authority to review and resolve disputes with
respect to Awards held by Participants who are not Insiders, and such resolution
shall be final and binding on the Company and the Participant.

 

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5. OPTIONS.

5.1 Grant of Options. The Committee may grant Options to Participants and will
determine (a) whether the Options will be ISOs or NSOs; (b) the number of Shares
subject to the Option, (c) the Exercise Price of the Option, (d) the period
during which the Option may be exercised, (e) the vesting and exercisability of
the Option and (f) all other terms and conditions of the Option, subject to the
provisions of this Section 5 and the Plan. Options granted to Non-Employee
Directors pursuant to Section 10 hereof shall be governed by that Section. Each
Option granted under the Plan will be evidenced by an Award Agreement, which
shall expressly identify the Option as an ISO or NSO. The date of grant of an
Option will be the date on which the Committee makes the determination to grant
the Option, unless the Committee otherwise specifies a later date.

5.2 Exercise Period; Expiration Date and Exercise. An Option will be exercisable
within the times or upon the occurrence of events determined by the Committee
and set forth in the Award Agreement governing such Option and subject to
Company policies established by the Committee (or by individuals to whom the
Committee has delegated responsibility) from time to time. The Committee may
provide for Options to become exercisable at one time or from time to time,
periodically or otherwise (including, without limitation, upon the attainment
during a Performance Period of performance goals based on Performance Factors),
in such number of Shares or percentage of Shares subject to the Option as the
Committee determines. The Award Agreement shall set forth the Expiration Date;
provided that no Option will be exercisable after the expiration of ten years
from the date the Option is granted; and provided further that no ISO granted to
a Ten Percent Stockholder will be exercisable after the expiration of five years
from the date the Option is granted.

5.3 Exercise Price. The Exercise Price of an Option will be determined by the
Committee when the Option is granted and may not be less than the Fair Market
Value on the date of grant; provided that the Exercise Price of any ISO granted
to a Ten Percent Stockholder will not be less than 110% of the Fair Market Value
of the Shares on the date of grant.

5.4 Vesting and Termination.

(a) Vesting. Except as set forth in the Participant’s Award Agreement, any
Option granted to a Participant will cease to vest on the Participant’s
Termination Date. If the Participant does not exercise his or her Option within
the time specified by the Committee or as set forth in the Award Agreement, the
Option shall terminate.

(b) Post-Termination Exercise Period. Subject to Section 22.4, following a
Participant’s Termination, the Participant’s Option may be exercised to the
extent vested and exercisable as set forth below:

(i) no later than 60 days after the Termination Date if a Participant is
Terminated for any reason except death or Disability, unless a different period
of time period is specifically set forth in the Participant’s Award Agreement;
provided that no Option may be exercised after the Expiration Date of the
Option; or

(ii) no later than twelve months after the Termination Date in the case of
Termination due to Disability or death or if a Participant dies within 30 days
of the Termination Date, unless a different time period is specifically set
forth in the Participant’s Award Agreement; provided that no Option may be
exercised after the Expiration Date of the Option.

5.5 Limitations on ISOs. The aggregate Fair Market Value (determined as of the
date of grant) of Shares with respect to which ISOs are exercisable for the
first time by a Participant during any calendar year (under the Plan or under
any other incentive stock option plan of the Company or any Subsidiary) shall
not exceed $100,000. If the Fair Market Value of Shares on the date of grant
with respect to which ISOs are exercisable for the first time by a Participant
during any calendar year exceeds $100,000, the Options for the first $100,000
worth of Shares to become exercisable in that calendar year will be ISOs, and
the Options for the Shares with a Fair Market Value in excess of $100,000 that
become exercisable in

 

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that calendar year will be NSOs. If the Code is amended to provide for a
different limit on the Fair Market Value of Shares permitted to be subject to
ISOs, such different limit shall be automatically incorporated into the Plan and
will apply to any Options granted after the effective date of the Code’s
amendment.

5.6 Notice of Disqualifying Dispositions of Shares Acquired on Exercise of an
ISO. If a Participant sells or otherwise disposes of any Shares acquired
pursuant to the exercise of an ISO on or before the later of (a) the date two
years after the Date of Grant, and (b) the date one year after the exercise of
the ISO (in either case, a “Disqualifying Disposition”), the Company may require
the Participant to immediately notify the Company in writing of such
Disqualifying Disposition.

5.7 No Disqualification. Notwithstanding any other provision in the Plan, no
term of the Plan relating to ISOs will be interpreted, amended or altered, and
no discretion or authority granted under the Plan will be exercised, so as to
disqualify the Plan under Section 422 of the Code or, without the consent of the
Participant affected, to disqualify any ISO under Section 422 of the Code. Any
outstanding ISO that is modified, extended, renewed or otherwise altered shall
be treated in accordance with Section 424(h) of the Code and the regulations
thereunder.

6. RESTRICTED STOCK AWARDS.

6.1 Awards of Restricted Stock. A Restricted Stock Award is an offer by the
Company to sell to a Participant Shares that are subject to restrictions. The
Committee will determine to whom an offer will be made, the number of Shares the
person may purchase, the Purchase Price, the restrictions under which the Shares
will be subject and all other terms and conditions of the Restricted Stock
Award. A Participant accepts a Restricted Stock Award by signing and delivering
to the Company an Award Agreement with full payment of the Purchase Price within
30 days from the date the Award Agreement was delivered to the Participant. If
the Participant does not accept the Restricted Stock Award within 30 days, then
the offer of the Restricted Stock Award will terminate, unless the Committee
determines otherwise. Restricted Stock Awards will vest over a minimum of three
years as measured from the date of grant.

6.2 Purchase Price. The Purchase Price for a Restricted Stock Award will be
determined by the Committee and may be less than Fair Market Value (but not less
than the par value of the Shares) on the date the Restricted Stock Award is
granted. Payment of the Purchase Price must be made in accordance with
Section 11 of the Plan and the Award Agreement, and in accordance with any
procedures established by the Company.

6.3 Termination. Except as set forth in the Participant’s Award Agreement, any
Restricted Stock Award will cease to vest on the Participant’s Termination Date.

7. STOCK BONUS AWARDS.

7.1 Awards of Stock Bonuses. A Stock Bonus Award is an award to a Participant of
Shares (which may consist of Restricted Stock or Restricted Stock Units) for
services to be rendered or for past services already rendered to the Company or
any Subsidiary. No payment will be required for Shares awarded pursuant to a
Stock Bonus Award.

7.2 Form of Payment to Participant. The Stock Bonus Award shall be paid
currently. Payment may be made in the form of cash, whole Shares, or a
combination thereof, based on the Fair Market Value of the Shares earned under a
Stock Bonus Award on the date of payment, and in either a lump sum payment or in
installments, all as the Committee determines.

7.3 Termination of Participant. Except as set forth in the Participant’s Award
Agreement, any Bonus Stock Award will cease to vest on the Participant’s
Termination Date.

8. STOCK APPRECIATION RIGHTS.

8.1 Awards of SARs. A Stock Appreciation Right (“SAR”) is an award to a
Participant that may be settled in cash, or Shares (which may consist of
Restricted Stock or RSUs), having a value equal to the value determined by
multiplying the difference between the Fair Market Value on the date of exercise
over the Exercise Price and the number of Shares with respect to which the SAR
is being settled. The SAR may be granted for services to be rendered or for past
services already rendered to the Company, or any Subsidiary.

 

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8.2 Exercise Period and Expiration Date. A SAR will be exercisable within the
times or upon the occurrence of events determined by the Committee and set forth
in the Award Agreement governing such SAR. The Award Agreement shall set forth
the Expiration Date; provided that no SAR will be exercisable after the
expiration of ten years from the date the SAR is granted.

8.3 Exercise Price. The Committee will determine the Exercise Price of the SAR
when the SAR is granted, and which may not be less than the Fair Market Value on
the date of grant and may be settled only in Shares.

8.4 Termination.

(a) Vesting. Any SAR granted to a Participant will cease to vest on the
Participant’s Termination Date. In the event a Participant is Terminated as a
result of such Participant’s Retirement, such Participant’s SARs shall, in the
sole discretion of the Committee, accelerate vesting or continue to vest,
continue to become exercisable, and may be exercised during such period of time
as is determined by the Committee and as provided in the Award Agreement (but in
no event may the SAR be exercised after the expiration date of the term of such
SAR as set forth in the Award Agreement); if the Participant does not exercise
his or her SAR within the time specified by the Committee or as set forth in the
Award Agreement, the SAR shall terminate.

(b) Post-Termination Exercise Period. Subject to Section 22.4, following a
Participant’s Termination, the Participant’s SAR may be exercised to the extent
vested and exercisable as set forth below:

(i) no later than 60 days after the Termination Date if a Participant is
Terminated for any reason except death or Disability, unless a different period
of time period is specifically set forth in the Participant’s Award Agreement;
provided that no SAR may be exercised after the Expiration Date of the SAR; or

(ii) no later than twelve months after the Termination Date in the case of
Termination due to Disability or death or if a Participant dies within 30 days
of the Termination Date, unless a different time period is specifically set
forth in the Participant’s Award Agreement; provided that no SAR may be
exercised after the Expiration Date of the SAR.

9. RESTRICTED STOCK UNITS.

9.1 Awards of Restricted Stock Units. An RSU is an award to a Participant
covering a number of Shares that may be settled in cash, or by issuance of those
Shares for services to be rendered or for past services already rendered to the
Company or any Subsidiary. RSUs will vest over a minimum of three years as
measured from the date of grant.

9.2 Form and Timing of Settlement. To the extent permissible under applicable
law, the Committee may permit a Participant to defer payment under a RSU to a
date or dates after the RSU is earned, provided that the terms of the RSU and
any deferral satisfy the requirements of Section 409A of the Code (or any
successor) and any regulations or rulings promulgated thereunder. Payment may be
made in the form of cash or whole Shares or a combination thereof in a lump sum
payment, all as the Committee determines.

10. AWARD GRANTS TO NON-EMPLOYEE DIRECTORS.

10.1 Eligibility. Non-Employee Directors are eligible to receive annual grants
of any type of Award, except ISOs, offered under this Plan pursuant to this
Section 10. Notwithstanding the limitations set forth below in Section 10.2,
Non-Employee Directors are also eligible to receive Awards pursuant to Sections
5, 6, 7, 8 and 9 hereof.

 

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10.2 Initial Grant. Each Non-Employee Director upon first becoming a member of
the Board may be granted, as determined by the Committee (i) up to a maximum
number of Shares subject to an RSU and/or Restricted Stock grant having an
aggregate Fair Market Value equal to $300,000, as measured on the date of grant,
or (ii) up to a maximum aggregate number of 40,000 Shares subject to an Option
and/or SAR.

10.3 Succeeding Grant. Each Non-Employee Director may be granted on an annual
basis, as determined by the Committee (i) up to a maximum number of Shares
subject to an RSU and/or Restricted Stock grant having an aggregate Fair Market
Value equal to $150,000, as measured on the date of grant, or (ii) up to a
maximum aggregate number of 20,000 Shares subject to an Option and/or SAR.

10.4 Form and Timing of Settlement of RSUs. To the extent permissible under
applicable law, the Committee may permit a Non-Employee Director to defer
payment under a RSU to a date or dates after the RSU is earned, provided that
the terms of the RSU and any deferral satisfy the requirements of Section 409A
of the Code (or any successor) and any regulations or rulings promulgated
thereunder. Payment may be made in the form of cash or whole Shares or a
combination thereof in a lump sum payment, all as the Committee determines.

10.5 Vesting and Exercisability. In the event of a Corporate Transaction, the
vesting of all Awards granted to Non-Employee Directors pursuant to this
Section 10 will accelerate and such Awards will become exercisable (to the
extent applicable) in full prior to the consummation of such event at such time
and on such conditions as the Committee determines, and if such Awards are not
exercised (to the extent applicable) on or prior to the consummation of the
Corporate Transaction, they shall terminate.

10.5 Post-Termination Exercise Period. Except as provided in Section 10.5 or
this Section 10.5, each Option granted under this Section 10 shall expire ten
years after its date of grant. The date on which the Non-Employee Director
ceases to be a member of the Board or a consultant of the Company shall be
referred to as the “Non-Employee Director Termination Date” for purposes of this
Section 10.5. An Option may be exercised after the Non-Employee Director
Termination Date only as set forth below:

(a) Termination Generally. If the Non-Employee Director ceases to be a member of
the Board or consultant of the Company for any reason except death, Disability
or Non-Employee Director Retirement, then each Option, to the extent then vested
and exercisable pursuant to Section 10.4 above, then held by such Non-Employee
Director may be exercised by the Non-Employee Director within 60 days after the
Non-Employee Director Termination Date, unless a different period of time is
specifically set forth in the Non-Employee Director’s Award Agreement; provided
that no Option may be exercised after its Expiration Date.

(b) Death or Disability. If the Non-Employee Director ceases to be a member of
the Board or consultant of the Company because of his or her Disability or
death, then each Option granted hereunder, to the extent then vested and
exercisable, may be exercised no later than twelve months after the Termination
Date in the case of Termination due to Disability or death or if a Participant
dies within 30 days of the Termination Date, unless a longer time period is
specifically set forth in the Participant’s Award Agreement; provided that no
Option may be exercised after the Expiration Date of the Option.

11. PAYMENT FOR SHARE PURCHASES.

11.1 Payment. Payment for Shares purchased pursuant to the Plan may be made by
any of the following methods (or any combination of such methods) that are
described in the applicable Award Agreement and that are permitted by law:

 

  (a) in cash or cash equivalent (including by check);

 

  (b) in the case of exercise by the Participant, a Participant’s guardian or
legal representative or the authorized legal representative of a Participant’s
heirs or legatees after a Participant’s death, by cancellation of indebtedness
of the Company to the Participant;

 

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  (c) by surrender of shares of the Company’s Common Stock that either: (1) were
obtained by the Participant or Authorized Transferee in the public market; or
(2) if the shares were not obtained in the public market, they have been owned
by the Participant or Authorized Transferee for more than six months and have
been paid for within the meaning of SEC Rule 144;

 

  (d) in the case of exercise by the Participant, Participant’s guardian or
legal representative or the authorized legal representative of a Participant’s
heirs or legatees after a Participant’s death, by waiver of compensation due or
accrued to the Participant for services rendered;

 

  (e) with respect only to purchases upon exercise of an Option, and provided
that a public market for the Shares exists:

 

  (1) through a “same day sale” commitment from the Participant or Authorized
Transferee and an NASD Dealer meeting the requirements of the Company’s “same
day sale” procedures and in accordance with law; or

 

  (2) through a “margin” commitment from the Participant or Authorized
Transferee and an NASD Dealer meeting the requirements of the Company’s “margin”
procedures and in accordance with law.

11.2 Issuance of Shares. Upon payment of the applicable Purchase Price or
Exercise Price and compliance with other conditions and procedures established
by the Company for the purchase of Shares, the Company shall issue the Shares
registered in the name of the Participant or Authorized Transferee and shall
deliver certificates representing the Shares (in physical or electronic form, as
appropriate). The Shares may be subject to legends or other restrictions as
described in Section 15 of the Plan.

 

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12. WITHHOLDING TAXES.

12.1 Withholding Generally. Whenever Shares are to be issued in satisfaction of
Awards granted under the Plan, the Company may require the Participant to remit
to the Company an amount sufficient to satisfy minimum federal, state, local and
foreign income or social security tax withholding requirements prior to the
delivery of any certificate(s) for the Shares. If a payment in satisfaction of
an Award is to be made in cash, the payment will be net of an amount sufficient
to minimum satisfy federal, state, local and foreign income or social security
tax withholding requirements.

12.2 Stock Withholding. When, under applicable tax laws, a Participant incurs
income or social security tax liability in connection with the grant, exercise,
vesting or payment of any Award that is subject to income or social security tax
withholding and the Participant is obligated to pay the Company the amount
required to be withheld, the Committee may, in its sole discretion, allow the
Participant to satisfy the minimum withholding tax obligation by electing to
have the Company withhold from the Shares to be issued that number of whole
Shares having a Fair Market Value equal to the minimum amount required to be
withheld, determined on the date that the amount of tax to be withheld is to be
determined. All elections by a Participant to have Shares withheld for this
purpose shall be made in accordance with the requirements established by the
Committee and be in writing in a form acceptable to the Committee.

13. PRIVILEGES OF STOCK OWNERSHIP. No Participant or Authorized Transferee will
have any rights as a stockholder of the Company with respect to any Shares until
the Shares are issued to the Participant or Authorized Transferee. After Shares
are issued to the Participant or Authorized Transferee, the Participant or
Authorized Transferee will be a stockholder and have all the rights of a
stockholder with respect to the Shares including the right to vote and receive
all dividends or other distributions made or paid with respect to such Shares;
provided, that if the Shares are Restricted Stock, any new, additional or
different securities the Participant or Authorized Transferee may become
entitled to receive with respect to the Shares by virtue of a stock dividend,
stock split or any other change in the corporate or capital structure of the
Company will be subject to the same restrictions as the Restricted Stock;
provided further, that the Participant or Authorized Transferee will have no
right to retain such dividends or distributions with respect to Shares that are
repurchased at the Participant’s original Exercise Price or Purchase Price
pursuant to Section 15.

14. TRANSFERABILITY. As may be permitted by the Committee (and to the extent
permitted by applicable law and the terms of the Award Agreement), a Participant
may transfer an Award to an Authorized Transferee. Absent such permission, no
Award and no interest therein, shall be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or by the laws of
descent and distribution, and no Award may be made subject to execution,
attachment or similar process.

15. RESTRICTIONS ON SHARES. At the discretion of the Committee, the Company may
reserve to itself and/or its assignee(s) in the Award documentation a right to
repurchase all or a portion of a Participant’s Shares that are not “Vested” (as
defined in the Award documentation), following the Participant’s Termination, at
any time within ninety days after the later of (a) the Participant’s Termination
Date or (b) the date the Participant purchases Shares under the Plan, for cash
or cancellation of purchase money indebtedness with respect to Shares, at the
Participant’s original Exercise Price or Purchase Price; provided that upon
assignment of the right to repurchase, the assignee must pay the Company cash
equal to the excess of the Fair Market Value of the Shares over the original
Purchase Price.

16. CERTIFICATES. All certificates for Shares or other securities delivered
under the Plan (whether in physical or electronic form, as appropriate) will be
subject to stock transfer orders, legends and other restrictions that the
Committee deems necessary or advisable, including without limitation
restrictions under any applicable federal, state or foreign securities law, or
any rules, regulations and other requirements of the SEC or any stock exchange
or automated quotation system on which the Shares may be listed.

 

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17. ESCROW. To enforce any restrictions on a Participant’s Shares, the Committee
may require the Participant to deposit all certificates representing Shares,
together with stock powers or other transfer instruments approved by the
Committee, appropriately endorsed in blank, with the Company or an agent
designated by the Company, to hold in escrow until such restrictions have lapsed
or terminated, and the Committee may cause a legend or legends referencing such
restrictions to be placed on the certificates.

18. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award shall not be
effective unless the Award is in compliance with all applicable state, federal
and foreign securities laws, rules and regulations of any governmental body, and
the requirements of any stock exchange or automated quotation system on which
the Shares may then be listed, as they are in effect on the date of grant of the
Award and also on the date of exercise or other issuance. Notwithstanding any
other provision in the Plan, the Company shall have no obligation to issue or
deliver certificates for Shares under the Plan prior to (a) obtaining any
approvals from governmental agencies that the Company determines are necessary
or advisable, and/or (b) completion of any registration or other qualification
of such shares under any state, federal or foreign law or ruling of any
governmental body that the Company determines to be necessary or advisable. The
Company shall be under no obligation to register the Shares with the SEC or to
effect compliance with the registration, qualification or listing requirements
of any state, federal or foreign securities laws, stock exchange or automated
quotation system, and the Company shall have no liability for any inability or
failure to do so.

19. NO OBLIGATION TO EMPLOY. Nothing in the Plan or any Award granted under the
Plan shall confer or be deemed to confer on any Participant any right to
continue in the employ of, or to continue any other relationship with, the
Company or any Subsidiary or limit in any way the right of the Company or any
Subsidiary to terminate a Participant’s employment or other relationship at any
time, with or without cause, as applicable laws allow.

20. REPRICING PROHIBITED; EXCHANGE AND BUYOUT OF AWARDS. The repricing of
Options or SARs is prohibited without prior stockholder approval. The Committee
may authorize the Company, with prior stockholder approval and the consent of
the respective Participants, to issue new Option or SAR Awards in exchange for
the surrender and cancellation of any or all outstanding Awards. With prior
stockholder approval, the Committee may at any time buy from a Participant an
Option previously granted with payment in cash, Shares or other consideration,
based on such terms and conditions as the Committee and the Participant shall
agree, provided that if payment is in cash, the Committee may buy only an Option
where the Fair Market Value of the Shares exceeds the Exercise Price.

21. CORPORATE TRANSACTIONS.

21.1 Assumption or Replacement of Awards by Successor. In the event of a
Corporate Transaction any or all outstanding Awards may be assumed or replaced
by the successor corporation, which assumption or replacement shall be binding
on all Participants. In the alternative, the successor corporation may
substitute equivalent Awards or provide substantially similar consideration to
Participants as was provided to stockholders (after taking into account the
existing provisions of the Awards). The successor corporation may also issue, in
place of outstanding Shares of the Company held by the Participant,
substantially similar shares or other property subject to repurchase
restrictions no less favorable to the Participant. In the event such successor
corporation, if any, refuses to assume or replace the Awards, as provided above,
pursuant to a Corporate Transaction or if there is no successor corporation due
to a dissolution or liquidation of the Company, such Awards shall immediately
vest as to 100% of the Shares subject thereto at such time and on such
conditions as the Board shall determine and the Awards shall expire at the
closing of the transaction or at the time of dissolution or liquidation.

21.2 Other Treatment of Awards. Subject to any greater rights granted to
Participants under Section 21.1, in the event of a Corporate Transaction, any
outstanding Awards shall be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation or sale of assets.

21.3 Assumption of Awards by the Company. The Company, from time to time, also
may substitute or assume outstanding awards granted by another company, whether
in connection with an acquisition of such other company or otherwise, by either
(a) granting an Award under the Plan in

 

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substitution of such other company’s award, or (b) assuming such award as if it
had been granted under the Plan if the terms of such assumed award could be
applied to an Award granted under the Plan. Such substitution or assumption
shall be permissible if the holder of the substituted or assumed award would
have been eligible to be granted an Award under the Plan if the other company
had applied the rules of the Plan to such grant. In the event the Company
assumes an award granted by another company, the terms and conditions of such
award shall remain unchanged (except that the exercise price and the number and
nature of Shares issuable upon exercise of any such option will be adjusted
appropriately pursuant to Section 424(a) of the Code). In the event the Company
elects to grant a new Option rather than assuming an existing option, such new
Option may be granted with a similarly adjusted Exercise Price. Shares subject
to Awards granted to substitute or assume outstanding awards granted by another
company in connection with an acquisition shall not reduce the number of Shares
available for issuance under Section 2.1 of the Plan.

22. OTHER PROVISIONS.

22.1 Distribution of Award Agreements and Plan. The Award Agreement, Plan and
other documents may be delivered in any manner (including electronic
distribution or posting) that meets applicable legal requirements.

22.2 Form of Award Agreement(s). Each Award granted under the Plan will be
evidenced by an Award Agreement, which will be in substantially a form (which
need not be the same for each Participant) that the Committee or an officer of
the Company (pursuant to Section 4.1(b)) has from time to time approved, and
will comply with and be subject to the terms and conditions of the Plan.

22.3 Procedures for Exercising or Settling an Award. A Participant or Authorized
Transferee may exercise or settle Awards by following the procedures established
by the Company’s stock administration department, as communicated and made
available to Participants through the Company’s electronic mail system, intranet
site or otherwise.

22.4 Black-out Periods and Post-Termination Exercisability. In the event a
Participant is prevented from exercising an Option or selling Shares or the
Company is unable to settle an Award due to any trading restrictions currently
in effect with respect to the Company’s Shares at the time of such Participant’s
Termination or during any post-termination exercise period, then any
post-termination exercise period shall be paused until such trading restriction
lapses.

22.5 Limitations on Exercise. The Committee may specify a reasonable minimum
number of Shares that may be purchased on any exercise of an Option or SAR;
provided that the minimum number will not prevent a Participant from exercising
an Option or SAR for the full number of Shares for which it is then exercisable.
An Option or a SAR may only be exercised by the personal representative of a
Participant or an Authorized Transferee or by the person or persons to whom a
Participant’s rights under the Option or SAR shall pass by such person’s will or
by the laws of descent and distribution of the state of such person’s domicile
at the time of death, and then only as and to the extent that such person was
entitled to exercise the Option or SAR on the date of death.

22.6 Terms of Awards. The Committee will determine an Award’s terms, including,
without limitation: (a) the number of Shares deemed subject to the Award;
(b) the time or times during which the Award may be exercised and (c) such other
terms and conditions as the Committee deems appropriate. Awards may be subject
to performance goals based on Performance Factors during any Performance Period
as may be set out in advance in the Participant’s Award Agreement. The Committee
may adjust the performance goals applicable to Awards to take into account
changes in law and accounting and to make such adjustments as the Committee
deems necessary or appropriate to reflect the impact of extraordinary or unusual
items, events or circumstances.

22.7 Treatment of Awards Upon Retirement. Upon a Participant’s Retirement, and
as determined by the Committee (and as evidenced in the Award Agreement), Awards
granted to such Participant may accelerate, continue to vest, provide for an
extended period of time in which to exercise an Award upon Termination or
contain such terms and conditions as the Committee deems appropriate.

 

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23. ADOPTION, STOCKHOLDER APPROVAL AND TERM. The Plan was adopted by the Board
on March 8, 2005. The Plan shall become effective upon approval by stockholders
of the Company, consistent with applicable laws. The Plan will terminate ten
years following the earlier of (i) the date it was adopted by the Board or
(ii) the date it became effective upon approval by stockholders of the Company,
unless sooner terminated by the Board pursuant to Section 24.

24. AMENDMENT OR TERMINATION OF PLAN AND AWARDS. The Board may at any time
terminate, amend or suspend the Plan in any respect, including without
limitation amendment of any form of Award Agreement or instrument to be executed
pursuant to the Plan. Notwithstanding the foregoing, neither the Board nor the
Committee shall, without the approval of the stockholders of the Company, amend
the Plan in any manner that requires such stockholder approval pursuant to the
Code or the regulations promulgated thereunder as such provisions apply to ISO
plans, or pursuant to the Exchange Act or any rule promulgated thereunder. The
Committee may modify, extend or renew outstanding Awards and authorize the grant
of Awards in substitution thereof; provided that any such action (including any
amendment to the Plan) may not, without the written consent of a Participant,
impair any of a Participant’s rights under any Award previously granted.

25. NONEXCLUSIVITY OF THE PLAN; UNFUNDED PLAN. Neither the adoption of the Plan
by the Board, the submission of the Plan to the stockholders of the Company for
approval, nor any provision of the Plan shall be construed as creating any
limitations on the power of the Board to adopt such additional arrangements as
it may deem desirable, including, without limitation, the granting of stock
options and bonuses otherwise than under the Plan, and such arrangements may be
either generally applicable or applicable only in specific cases. The Plan shall
be unfunded. Neither the Company nor the Board shall be required to segregate
any assets that may at any time be represented by Awards made pursuant to the
Plan. Neither the Company, the Committee, nor the Board shall be deemed to be a
trustee of any amounts to be paid under the Plan.

26. DEFINITIONS. As used in the Plan, the following terms shall have the
following meanings:

(a) “Authorized Transferee” means the permissible recipient, as authorized by
this Plan and the Committee, of an NSO that is transferred during the
Participant’s lifetime by the Participant by gift or domestic relations order.
For purposes of this definition a “permissible recipient” is: (i) a child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law of the Participant, including
any such person with such relationship to the Participant by adoption; (ii) any
person (other than a tenant or employee) sharing the Participant’s household;
(iii) a trust in which the persons in (i) or (ii) have more than fifty percent
of the beneficial interest; (iv) a foundation in which the persons in (i) or
(ii) or the Participant control the management of assets; or (v) any other
entity in which the person in (i) or (ii) or the Participant own more than fifty
percent of the voting interest.

(b) “Award” means any award under the Plan, including any Option, Stock
Appreciation Right, Restricted Stock, Restricted Stock Unit or Stock Bonus.

(c) “Award Agreement” means, with respect to each Award, the written agreement
between the Company and the Participant setting forth the terms and conditions
of the Award.

(d) “Board” means the Board of Directors of the Company.

(e) “Code” means the United States Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder.

(f) “Committee” means the Compensation Committee of the Board and such other
committee appointed by the Board to administer the Plan, including, without
limitation, the Stock Option Committee.

(g) “Company” means Altera Corporation, a corporation organized under the laws
of the State of Delaware, or any successor corporation.

(h) “Corporate Transaction” means (a) a merger or consolidation in which the
Company is not the surviving corporation (other than a merger or consolidation
with a wholly-owned subsidiary, a

 

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reincorporation of the Company in a different jurisdiction, or other transaction
in which there is no substantial change in the stockholders of the Company and
the Awards granted under the Plan are assumed or replaced by the successor
corporation, which assumption shall be binding on all Participants), (b) a
dissolution or liquidation of the Company, (c) the sale of substantially all of
the assets of the Company, (d) a merger in which the Company is the surviving
corporation but after which the stockholders of the Company immediately prior to
such merger (other than any stockholder that merges, or which owns or controls
another corporation that merges, with the Company in such merger) cease to own
their shares or other equity interest in the Company; or (e) any other
transaction which qualifies as a “corporate transaction” under Section 424(a) of
the Code wherein the stockholders of the Company give up all of their equity
interest in the Company (except for the acquisition, sale or transfer of all or
substantially all of the outstanding shares of the Company).

(i) “Disability” means a disability within the meaning of Section 22(e)(3) of
the Code.

(j) “Effective Date” means the date stockholders approve the Plan pursuant to
Section 22 of the Plan.

(k) “Exchange Act” means the United States Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.

(l) “Executive Officer” means a person who is an “executive officer” of the
Company as defined in Rule 3b-7 promulgated under the Exchange Act.

(m) “Exercise Price” means the price at which a Participant who holds an Option
or SAR may purchase the Shares issuable upon exercise of the Option or SAR.

(n) “Expiration Date” means the last date on which an Option or SAR may be
exercised as determined by the Committee.

(o) “Fair Market Value” means, as of any date, the value of a share of the
Company’s Common Stock determined as follows:

 

  (1) if such Common Stock is then quoted on the NASDAQ National Market, its
closing price on the NASDAQ National Market on such date;

 

  (2) if such Common Stock is publicly traded and is then listed on a national
securities exchange, the last reported sale price on such date or, if no such
reported sale takes place on such date, the average of the closing bid and asked
prices on the principal national securities exchange on which the Common Stock
is listed or admitted to trading;

 

  (3) if such Common Stock is publicly traded but is not quoted on the NASDAQ
National Market nor listed or admitted to trading on a national securities
exchange, the average of the closing bid and asked prices on such date, as
reported by The Wall Street Journal, for the over-the-counter market; or

 

  (4) if none of the foregoing is applicable, by the Board of Directors in good
faith.

(p) “Insider” means an officer or director of the Company or any other person
whose transactions in the Company’s Common Stock are subject to Section 16 of
the Exchange Act.

(q) “ISO” means an Incentive Stock Option within the meaning of the Code.

(r) “NSO” means a nonqualified stock option that does not qualify as an ISO.

(s) “Option” means an Award pursuant to Section 5 or, in the case of a
Non-Employee Director, Section 10 of the Plan.

(t) “Non-Employee Director” means a member of the Company’s Board of Directors
who is not a current employee of the Company or any Subsidiary.

(u) “Participant” means a person who receives an Award under the Plan.

 

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(v) “Performance Factors” include, but are not limited to, some or all of the
factors selected by the Committee from among the measures below to determine
whether performance goals established by the Committee and applicable to Awards
have been satisfied:

 

  (1) Net revenue and/or net revenue growth;

 

  (2) Earnings before income taxes and amortization and/or earnings before
income taxes and amortization growth;

 

  (3) Operating income and/or operating income growth;

 

  (4) Net income and/or net income growth;

 

  (5) Earnings per share and/or earnings per share growth;

 

  (6) Total stockholder return and/or total stockholder return growth;

 

  (7) Return on equity;

 

  (8) Operating cash flow return on income;

 

  (9) Adjusted operating cash flow return on income;

 

  (10) Economic value added; and

 

  (11) Individual business objectives.

(w) “Performance Period” means the period of service determined by the
Committee, not to exceed five years, during which years of service or
performance is to be measured for the Award.

(x) “Purchase Price” means the price to be paid for Shares acquired under the
Plan, other than Shares acquired upon exercise of an Option or SAR.

(y) “Restricted Stock Award” means an award of Shares pursuant to Section 6 or,
in the case of a Non-Employee Director, Section 10 of the Plan.

(z) “Restricted Stock Unit” means an Award granted pursuant to Section 9 or, in
the case of a Non-Employee Director, Section 10 of the Plan.

(aa) “Retirement” means that the Committee has deemed a Participant retired
within the meaning of the applicable retirement policy applicable to Awards as
determined from time to time by the Compensation Committee of the Board.

(bb) “SEC” means the United States Securities and Exchange Commission.

(cc) “Securities Act” means the United States Securities Act of 1933, as
amended, and the regulations promulgated thereunder.

(dd) “Shares” means shares of the Company’s Common Stock $0.01 par value,
reserved for issuance under the Plan, as adjusted pursuant to Sections 2 and 21,
and any successor security.

(ee) “Stock Appreciation Right” means an Award granted pursuant to Section 8 or,
in the case of a Non-Employee Director, Section 10 of the Plan.

(ff) “Stock Bonus” means an Award granted pursuant to Section 7 of the Plan.

(gg) “Subsidiary” means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if, at the time of granting of
the Award, each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

(gg) “Ten Percent Stockholder” means any person who directly or by attribution
owns more than ten percent of the total combined voting power of all classes of
stock of the Company or any Subsidiary.

 

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(ii) “Termination” or “Terminated” means, for purposes of the Plan with respect
to a Participant, that the Participant has ceased to provide services as an
employee, director, consultant, independent contractor or adviser to the Company
or a Subsidiary; provided that a Participant shall not be deemed to be
Terminated if the Participant is on a Company approved leave of absence; and
provided further, that during any Company approved leave of absence, vesting of
Awards shall be suspended or continue in accordance with applicable Company
policies. Subject to the foregoing, the Committee shall have sole discretion to
determine whether a Participant has ceased to provide services and the effective
date on which the Participant ceased to provide services (the
“Termination Date”); further, the Termination Date will not be extended by any
notice period mandated under local law.

 

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