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                                   HEARTPORT, INC.
                                1996 STOCK OPTION PLAN
                             (Restated October 21, 1996)

                                     ARTICLE ONE
                                  GENERAL PROVISIONS

I.  PURPOSE OF THE PLAN

         This 1996 Stock Option Plan is intended to promote the interests of
Heartport, Inc., a Delaware corporation, by providing eligible persons with the
opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Corporation as an incentive for them to remain in
the service of the Corporation.

         Capitalized terms shall have the meanings assigned to such terms in
the attached Appendix.

II. STRUCTURE OF THE PLAN

    A.   The Plan shall be divided into two separate equity programs:

                   (i)     the Discretionary Option Grant Program under which
    eligible persons may, at the discretion of the Plan Administrator, be
    granted options to purchase shares of Common Stock, and

                   (ii)    the Automatic Option Grant Program under which
    Eligible Directors shall automatically receive option grants at periodic
    intervals to purchase shares of Common Stock. 

    B.   The provisions of Articles One and Four shall apply to all equity
programs under the Plan and shall accordingly govern the interests of all
persons under the Plan.

III. ADMINISTRATION OF THE PLAN

    A.   The Primary Committee shall have authority to administer the
Discretionary Option Grant Program with respect to Section 16 Insiders. 
Administration of the Discretionary Option Grant Program with respect to all
other persons eligible to participate in that program may, at the Board's
discretion, be vested in the Primary Committee or a Secondary Committee.  In
addition, the Board may retain the power to administer the Plan with respect to
all persons.  The members of the Secondary Committee may be Board members who
are Employees eligible to receive discretionary option grants under the Plan or
any stock option, stock appreciation, stock bonus or other stock plan of the
Corporation (or any Parent or Subsidiary).  

    B.   Members of the Primary Committee or any Secondary Committee shall
serve for such period of time as the Board may determine and shall be subject to
removal by the Board at 

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any time.  The Board may also at any time terminate the functions of any
committee and reassume all powers and authority previously delegated to such
committee.

    C.   The Plan Administrator shall, within the scope of its administrative
functions under the Plan, have full power and authority to establish such rules
and regulations as it may deem appropriate for proper administration of the
Discretionary Option Grant Program and to make such determinations under, and
issue such interpretations of, the provisions of such program and any
outstanding options thereunder as it may deem necessary or advisable.  Decisions
of the Plan Administrator within the scope of its administrative functions under
the Plan shall be final and binding on all parties who have an interest in the
Discretionary Option Grant Program under its jurisdiction or any option
thereunder.

    D.   Service on the Primary Committee or the Secondary Committee shall
constitute service as a Board member, and members of each such committee shall
accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee.  No member of the Primary Committee
or the Secondary Committee shall be liable for any act or omission made in good
faith with respect to the Plan or any option grants made under the Plan.

    E.   Administration of the Automatic Option Grant Program shall be
self-executing in accordance with the terms of that program.  However, the Plan
Administrator (other than the Secondary Committee) shall exercise any
discretionary functions with respect to option grants made thereunder as it
deems advisable.  

IV. ELIGIBILITY

    A.   The persons eligible to participate in the Discretionary Option Grant
Program are as follows:

                   (i)     Employees,

                   (ii)    non-employee members of the Board or of the board of
    directors of any Parent or Subsidiary, and

                   (iii)   consultants and other independent advisors who
    provide services to the Corporation (or any Subsidiary).

    B.   The Plan Administrator shall, within the scope of its administrative
jurisdiction under the Plan, have full authority (subject to the provisions of
the Plan) to determine, with respect to the option grants under the
Discretionary Option Grant Program, which eligible persons are to receive option
grants, the time or times when such option grants are to be made, the number of
shares to be covered by each such grant, the status of the granted option as
either an Incentive Option or a Non-Statutory Option, the time or times at which
each option is to become exercisable and the vesting schedule (if any)
applicable to the option shares and the maximum term for which the option is to
remain outstanding. 


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    C.   The individuals eligible to receive option grants under the Automatic
Option Grant Program shall be (i) those individuals who are serving as
non-employee Board members on the Automatic Option Grant Program Effective Date
or who are first elected or appointed as non-employee Board members after such
date, whether through appointment by the Board or election by the Corporation's
stockholders, and (ii) those individuals who continue to serve as non-employee
Board members after one or more Annual Stockholders Meetings held after the
Automatic Option Grant Program Effective Date.  A non-employee Board member who
has previously been in the employ of the Corporation (or any Parent or
Subsidiary) shall not be eligible to receive an option grant under the Automatic
Option Grant Program on the Automatic Option Grant Program Effective Date or at
the time he or she first becomes a non-employee Board member, but such
individual shall be eligible to receive periodic option grants under the
Automatic Option Grant Program upon his or her continued service as a
non-employee Board member following one or more Annual Stockholders Meetings. 

V.  STOCK SUBJECT TO THE PLAN

    A.   The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock, including shares repurchased by the
Corporation on the open market.  The maximum number of shares of Common Stock
which may be issued over the term of the Plan shall not exceed 5,500,000 shares.

    B.   No one person participating in the Plan may receive options or
separately exercisable stock appreciation rights for more than One Million
(1,000,000) shares of Common Stock over the term of the Plan, exclusive of any
option grants received prior to January 1, 1996.

    C.   Shares of Common Stock subject to outstanding options shall be
available for subsequent issuance under the Plan to the extent (i) the options 
(including any options incorporated from the Predecessor Plan) expire or
terminate for any reason prior to exercise in full or (ii) the options are
canceled in accordance with the cancellation-regrant provisions of Article Two. 
All shares issued under the Plan (including shares issued upon exercise of
options incorporated from the Predecessor Plan), whether or not those shares are
subsequently repurchased by the Corporation pursuant to its repurchase rights
under the Plan, shall reduce on a share-for-share basis the number of shares of
Common Stock available for subsequent issuance under the Plan.  In addition,
should the exercise price of an option under the Plan (including any option
incorporated from the Predecessor Plan) be paid with shares of Common Stock or
should shares of Common Stock otherwise issuable under the Plan be withheld by
the Corporation in satisfaction of the withholding taxes incurred in connection
with the exercise of an option under the Plan, then the number of shares of
Common Stock available for issuance under the Plan shall be reduced by the gross
number of shares for which the option is exercised, and not by the net number of
shares of Common Stock issued to the holder of such option. 

    D.   Should any change be made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration, appropriate adjustments shall be
made to (i) the maximum number and/or class of 


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securities issuable under the Plan, (ii) the number and/or class of securities
for which any one person may be granted options and separately exercisable stock
appreciation rights per calendar year or over the term of the Plan, (iii) the
number and/or class of securities for which automatic option grants are to be
subsequently made per Eligible Director under the Automatic Option Grant Program
and (iv) the number and/or class of securities and the exercise price per share
in effect under each outstanding option (including any option incorporated from
the Predecessor Plan) in order to prevent the dilution or enlargement of
benefits thereunder.  The adjustments determined by the Plan Administrator shall
be final, binding and conclusive.


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                                     ARTICLE TWO
                          DISCRETIONARY OPTION GRANT PROGRAM

I.  OPTION TERMS

         Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; PROVIDED, however, that each such document
shall comply with the terms specified below.  Each document evidencing an
Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.

    A.   EXERCISE PRICE.

         1.   The exercise price per share shall be fixed by the Plan
Administrator but shall not be less than eighty-five percent (85%) of the Fair
Market Value per share of  Common Stock on the option grant date. 

         2.   The exercise price shall become immediately due upon exercise of
the option and shall, subject to the provisions of Section I of Article Four and
the documents evidencing the option, be payable in one or more of the forms
specified below:

                    (i)       cash or check made payable to the Corporation,

                    (ii)      shares of Common Stock held for the requisite
     period necessary to avoid a charge to the Corporation's earnings for
     financial reporting purposes and valued at Fair Market Value on the
     Exercise Date, or

                    (iii)     to the extent the option is exercised for vested
     shares,  through a special sale and remittance procedure pursuant to which
     the Optionee shall concurrently provide irrevocable written instructions to
     (a) a Corporation-designated brokerage firm to effect the immediate sale of
     the purchased shares and remit to the Corporation, out of the sale proceeds
     available on the settlement date, sufficient funds to cover the aggregate
     exercise price payable for the purchased shares plus all applicable
     Federal, state and local income and employment taxes required to be
     withheld by the Corporation by reason of such exercise and (b) the
     Corporation to deliver the certificates for the purchased shares directly
     to such brokerage firm in order to complete the sale.  

         Except to the extent such sale and remittance procedure is utilized, 
payment of the exercise price for the purchased shares must be made on the 
Exercise Date.

     B.   EXERCISE AND TERM OF OPTIONS.  Each option shall be exercisable at
such time or times, during such period and for such number of shares as shall be
determined by the Plan Administrator and set forth in the documents evidencing
the option.  However, no option shall have a term in excess of ten (10) years
measured from the option grant date.  


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     C.   EFFECT OF TERMINATION OF SERVICE.

          1.   The following provisions shall govern the exercise of any options
held by the Optionee at the time of cessation of Service or death:

                    (i)       Any option outstanding at the time of the      
     Optionee's cessation of Service for any reason shall remain exercisable 
     for such period of time thereafter as shall be determined by the Plan 
     Administrator and set forth in the documents evidencing the option, but 
     no such option shall be exercisable after the expiration of the option 
     term.

                    (ii)      Any option exercisable in whole or in part by 
     the Optionee at the time of death may be subsequently exercised by 
     the personal representative of the Optionee's estate or by the person or 
     persons to whom the option is transferred pursuant to the Optionee's 
     will or in accordance with the laws of descent and distribution.  

                    (iii)     During the applicable post-Service exercise
     period, the option may not be exercised in the aggregate for more than the
     number of vested shares for which the option is exercisable on the date of
     the Optionee's cessation of Service.  Upon the expiration of the applicable
     exercise period or (if earlier) upon the expiration of the option term, the
     option shall terminate and cease to be outstanding for any vested shares
     for which the option has not been exercised.  However, the option shall,
     immediately upon the Optionee's cessation of Service, terminate and cease
     to be outstanding to the extent it is not exercisable for vested shares on
     the date of such cessation of Service.

                    (iv)      Should the Optionee's Service be terminated for
     Misconduct, then all outstanding options held by the Optionee shall
     terminate immediately and cease to be outstanding.

                    (v)       In the event of a Corporate Transaction, the
     provisions of Section III of this Article Two shall govern the period for
     which the outstanding options are to remain exercisable following the
     Optionee's cessation of Service and shall supersede any provisions to the
     contrary in this section.

          2.   The Plan Administrator shall have the discretion, exercisable
either at the time an option is granted or at any time while the option remains
outstanding, to:

                    (i)       extend the period of time for which the option is
     to remain exercisable following the Optionee's cessation of Service from
     the period otherwise in effect for that option to such greater period of
     time as the Plan Administrator shall deem appropriate, but in no event
     beyond the expiration of the option term, and/or

                    (ii)      permit the option to be exercised, during the
     applicable post-Service exercise period, not only with respect to the
     number of vested shares of Common Stock for which such option is
     exercisable at the time of the Optionee's 


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     cessation of Service but also with respect to one or more additional
     installments in which the Optionee would have vested under the option had
     the Optionee continued in Service.

     D.   STOCKHOLDER RIGHTS.  The holder of an option shall have no stockholder
rights with respect to the shares subject to the option until such person shall
have exercised the option, paid the exercise price and become a holder of record
of the purchased shares.

     E.   REPURCHASE RIGHTS.  The Plan Administrator shall have the discretion
to grant options which are exercisable for unvested shares of Common Stock. 
Should the Optionee cease Service while holding such unvested shares, the
Corporation shall have the right to repurchase, at the exercise price paid per
share, any or all of those unvested shares.  The terms upon which such
repurchase right shall be exercisable (including the period and procedure for
exercise and the appropriate vesting schedule for the purchased shares) shall be
established by the Plan Administrator and set forth in the document evidencing
such repurchase right.  

     F.   LIMITED TRANSFERABILITY OF OPTIONS.  During the lifetime of the
Optionee, the option shall be exercisable only by the Optionee and shall not be
assignable or transferable other than by will or by the laws of descent and
distribution following the Optionee's death.  However, a Non-Statutory Option
may be assigned (i) to a member of the immediate family of the optionee or to a
trust established for the benefit of one or more members of the immediate family
of the optionee, provided that the assignment shall not be effective until
written notice of the assignment is received by the Plan Administrator, or (ii)
in accordance with terms approved in advance by the Plan Administrator.  The
terms applicable to the assigned option (or portion thereof) shall be the same
as those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate.

II.  INCENTIVE OPTIONS

          The terms specified below shall be applicable to all Incentive
Options.  Except as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Four shall be applicable to Incentive
Options. Options which are specifically designated as Non-Statutory Options when
issued under the Plan shall NOT be subject to the terms of this Section II.

     A.   ELIGIBILITY.  Incentive Options may only be granted to Employees.  

     B.   EXERCISE PRICE.  The exercise price per share shall not be less than
one hundred percent (100%) of the Fair Market Value per share of Common Stock on
the option grant date.

     C.   DOLLAR LIMITATION.  To the extent required by Code Section 422, the
aggregate Fair Market Value of the shares of Common Stock (determined as of the
respective date or dates of grant) for which one or more options granted to any
Employee under the Plan (or any other option plan of the Corporation or any
Parent or Subsidiary) may for the first time become exercisable as Incentive
Options during any one (1) calendar year shall not exceed the sum of One Hundred
Thousand Dollars ($100,000).  To the extent the Employee holds two (2) or more
such options which become exercisable for the first time in the same calendar
year, the foregoing 


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limitation on the exercisability of such options as Incentive Options shall be
applied on the basis of the order in which such options are granted.

     D.   10% STOCKHOLDER.  If any Employee to whom an Incentive Option is
granted is a 10% Stockholder, to the extent required by Code Section 422, then
the exercise price per share shall not be less than one hundred ten percent
(110%) of the Fair Market Value per share of Common Stock on the option grant
date, and the option term shall not exceed five (5) years measured from the
option grant date.

III. CORPORATE TRANSACTION/CHANGE IN CONTROL

     A.   In the event of any Corporate Transaction, each outstanding option
shall automatically accelerate so that each such option shall, immediately prior
to the effective date of the Corporate Transaction, become fully exercisable for
all of the shares of Common Stock at the time subject to such option and may be
exercised for any or all of those shares as fully-vested shares of Common Stock.
However, an outstanding option shall NOT so accelerate if and to the extent: 
(i) such option is, in connection with the Corporate Transaction, either to be
assumed by the successor corporation (or parent thereof) or to be replaced with
a comparable option to purchase shares of the capital stock of the successor
corporation (or parent thereof), (ii) such option is to be replaced with a cash
incentive program of the successor corporation which preserves the spread
existing on the unvested option shares at the time of the Corporate Transaction
and provides for subsequent payout in accordance with the same vesting schedule
applicable to such option or (iii) the acceleration of such option is subject to
other limitations imposed by the Plan Administrator at the time of the option
grant.  The determination of option comparability under clause (i) above shall
be made by the Plan Administrator, and its determination shall be final, binding
and conclusive.

     B.   All outstanding repurchase rights shall also terminate automatically,
and the shares of Common Stock subject to those terminated rights shall
immediately vest in full, in the event of any Corporate Transaction, except to
the extent: (i) those repurchase rights are to be assigned to the successor
corporation (or parent thereof) in connection with such Corporate Transaction or
(ii) such accelerated vesting is precluded by other limitations imposed by the
Plan Administrator at the time the repurchase right is issued.  

     C.   The Plan Administrator shall have the discretion, exercisable either
at the time the option is granted or at any time while the option remains
outstanding, to provide for the automatic acceleration of one or more
outstanding options (and the automatic termination of one or more outstanding
repurchase rights with the immediate vesting of the shares of Common Stock
subject to those rights) upon the occurrence of a Corporate Transaction, whether
or not those options are to be assumed or replaced (or those repurchase rights
are to be assigned) in the Corporate Transaction.

     D.   Immediately following the consummation of the Corporate Transaction,
all outstanding options shall terminate and cease to be outstanding, except to
the extent assumed by the successor corporation (or parent thereof).


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     E.   Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction. 
Appropriate adjustments shall also be made to (i) the number and class of
securities available for issuance under the Plan on both an aggregate and per
Optionee basis following the consummation of such Corporate Transaction and (ii)
the exercise price payable per share under each outstanding option, PROVIDED the
aggregate exercise price payable for such securities shall remain the same.  

     F.   Any options which are assumed or replaced in the Corporate Transaction
and do not otherwise accelerate at that time, shall automatically accelerate
(and any of the Corporation's outstanding repurchase rights which do not
otherwise terminate at the time of the Corporate Transaction shall automatically
terminate and the shares of Common Stock subject to those terminated rights
shall vest) in the event the Optionee's Service should subsequently terminate by
reason of an Involuntary Termination within twelve (12) months following the
effective date of such Corporate Transaction.  Any options so accelerated (and
any of the Corporation's outstanding repurchase rights so terminated) shall
vest, as if the Optionee's Service continued for an additional twelve (12)
months following the Involuntary Termination and shall remain exercisable for
all of the shares which are then exercisable and/or vested until the EARLIER of
(i) the expiration of the option term or (ii) the expiration of the one (1)-year
period measured from the effective date of the Involuntary Termination.

     G.   The Plan Administrator shall have the discretion, exercisable either
at the time the option is granted or at any time while the option remains
outstanding, to (i) provide for the automatic acceleration of one or more
outstanding options (and the automatic termination of one or more outstanding
repurchase rights with the immediate vesting of the shares of Common Stock
subject to those rights) upon the occurrence of a Change in Control or (ii)
condition any such option acceleration (and the termination of any outstanding
repurchase rights) upon the subsequent Involuntary Termination of the Optionee's
Service within a specified period following the effective date of such Change in
Control.  Any options accelerated in connection with a Change in Control shall
remain fully exercisable until the expiration or sooner termination of the
option term.

     H.   The portion of any Incentive Option accelerated in connection with a
Corporate Transaction or Change in Control shall remain exercisable as an
Incentive Option only to the extent the applicable One Hundred Thousand Dollar
limitation is not exceeded.  To the extent such dollar limitation is exceeded,
the accelerated portion of such option shall be exercisable as a Non-Statutory
Option under the Federal tax laws.

     I.   The grant of options under the Discretionary Option Grant Program
shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.


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IV.  STOCK APPRECIATION RIGHTS

     A.   The Plan Administrator shall have full power and authority to grant to
selected Optionees tandem stock appreciation rights.

     B.   The following terms shall govern the grant and exercise of tandem
stock appreciation rights:

                    (i)       One or more Optionees may be granted the right,
     exercisable upon such terms as the Plan Administrator may establish, to
     elect between the exercise of the underlying option for shares of Common
     Stock and the surrender of that option in exchange for a distribution from
     the Corporation in an amount equal to the excess of (A) the Fair Market
     Value (on the option surrender date) of the number of shares in which the
     Optionee is at the time vested under the surrendered option (or surrendered
     portion thereof) over (B) the aggregate exercise price payable for such
     shares.

                    (ii)      No such option surrender shall be effective unless
     it is approved by the Plan Administrator.  If the surrender is so approved,
     then the distribution to which the Optionee shall  be entitled may be made
     in shares of Common Stock valued at Fair Market Value on the option
     surrender date, in cash, or partly in shares and partly in cash, as the
     Plan Administrator shall in its sole discretion deem appropriate.

                    (iii)     If the surrender of an option is rejected by the
     Plan Administrator, then the Optionee shall retain whatever rights the
     Optionee had under the surrendered option (or surrendered portion thereof)
     on the option surrender date and may exercise such rights at any time prior
     to the LATER of (A) five (5) business days after the receipt of the
     rejection notice or (B) the last day on which the option is otherwise
     exercisable in accordance with the terms of the documents evidencing such
     option, but in no event may such rights be exercised more than ten (10)
     years after the  option grant date.


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                                    ARTICLE THREE 
                            AUTOMATIC OPTION GRANT PROGRAM

I.   OPTION TERMS 

     A.   GRANT DATES.  Option grants shall be made on the dates specified
below:

          1.   Each Eligible Director who is first elected or appointed as a
non-employee Board member after the Automatic Option Grant Program Effective
Date shall automatically be granted on the date of such initial election or
appointment (as the case may be), a Non-Statutory Option to purchase thirty-two
thousand (32,000) shares of Common Stock.

          2.   On the date of each Annual Stockholders Meeting, beginning with
the first Annual Meeting after the Corporation's initial public offering, each
individual who was an Eligible Director on the Automatic Option Grant Program
Effective Date and continues to serve as an Eligible Director after such
meeting, shall automatically be granted, whether or not such individual is
standing for re-election as a Board member at that Annual Meeting, a
Non-Statutory Option to purchase an additional six thousand four hundred (6,400)
shares of Common Stock.  On the date of each Annual Stockholders Meeting, each
Eligible Director who is elected or appointed as a non-employee Board member
after the Automatic Option Grant Program Effective Date and continues to serve
as an Eligible Director after such meeting, shall automatically be granted,
whether or not such individual is standing for re-election as a Board member at
that Annual Meeting, a Non-Statutory Option to purchase an additional six
thousand four hundred (6,400) shares of Common Stock, beginning on the first
anniversary of the grant date of such Eligible Director's initial automatic
option grant.  There shall be no limit on the number of such 6,400-share option
grants any one Eligible Director may receive over his or her period of Board
service.

     B.   EXERCISE PRICE. 

          1.   The exercise price per share shall be equal to one hundred
percent (100%) of the Fair Market Value per share of Common Stock on the option
grant date.

          2.   The exercise price shall be payable in one or more of the
alternative forms authorized under the Discretionary Option Grant Program. 
Except to the extent the sale and remittance procedure specified thereunder is
utilized, payment of the exercise price for the purchased shares must be made on
the Exercise Date.

     C.   OPTION TERM.  Each option shall have a term of ten (10) years measured
from the option grant date.

     D.   EXERCISE AND VESTING OF OPTIONS.  Each initial option granted after
October 21, 1996 shall become exercisable in a series of five (5) equal and
successive annual installments over the Optionee's period of continued service
as a Board member, with the first such installment to become exercisable upon
the Optionee's completion of one (1) year of Board service measured from the
option grant date.  Each subsequent annual automatic option grant


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shall become fully exercisable on the fifth anniversary of the date on which 
such annual grant was made.

     E.   EFFECT OF TERMINATION OF BOARD SERVICE.  The following provisions
shall govern the exercise of any options held by the Optionee at the time the
Optionee ceases to serve as a Board member:

                    (i)       The Optionee (or, in the event of Optionee's
     death, the personal representative of the Optionee's estate or the person
     or persons to whom the option is transferred pursuant to the Optionee's
     will or in accordance with the laws of descent and distribution) shall have
     a twelve (12)-month period following the date of such cessation of Board
     service in which to exercise each such option.  

                    (ii)      During the twelve (12)-month exercise period, the
     option may not be exercised in the aggregate for more than the number of
     vested shares of Common Stock for which the option is exercisable at the
     time of the Optionee's cessation of Board service. 

                    (iii)     Should the Optionee cease to serve as a Board
     member by reason of death or Permanent Disability, then the option shall
     become exercisable and shares at the time subject to the option shall
     immediately vest as if the Optionee had continued to serve as a Board
     member for an additional twelve (12) month period following the Optionee's
     cessation of Board service, so that such option may, during the twelve
     (12)-month exercise period following such cessation of Board service, be
     exercised for all or any portion of such shares of Common Stock to the
     extent so vested and exercisable. 

                    (iv)      In no event shall the option remain exercisable
     after the expiration of the option term.  Upon the expiration of the twelve
     (12)-month exercise period or (if earlier) upon the expiration of the
     option term, the option shall terminate and cease to be outstanding for any
     vested shares for which the option has not been exercised.  However, the
     option shall, immediately upon the Optionee's cessation of Board service,
     terminate and cease to be outstanding to the extent it is not exercisable
     for vested shares on the date of such cessation of Board service. 

II.  CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER

     A.   In the event of any Corporate Transaction, the shares of Common Stock
at the time subject to each outstanding option but not otherwise vested shall
automatically vest so that each such option shall, immediately prior to the
effective date of the Corporate Transaction, be exercisable for an additional
number of vested shares of Common Stock subject to such option as if the Board
member continued to serve as a Board member for an additional twelve (12) months
and may be exercised for all or any portion of such shares of Common Stock to
the extent so vested.  Immediately following the consummation of the Corporate
Transaction, each automatic 


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option grant shall terminate and cease to be outstanding, except to the extent
assumed by the successor corporation (or parent thereof).

     B.   In connection with any Change in Control, the shares of Common Stock
at the time subject to each outstanding option but not otherwise vested shall
automatically vest so that each such option shall, immediately prior to the
effective date of the Change in Control, be exercisable for an additional number
of vested shares of Common Stock as if the Board member continued to serve as a
Board member for an additional twelve (12) months and may be exercised for all
or any portion of such shares of Common Stock to the extent so vested.  Each
such option shall remain exercisable for such option shares so vested until the
expiration or sooner termination of the option term or the surrender of the
option in connection with a Hostile Take-Over. 

     C.   Upon the occurrence of a Hostile Take-Over, each automatic option
granted before October 21, 1996 and held by the Optionee for a period of at
least six (6) months shall be automatically canceled.  The Optionee shall in
return be entitled to a cash distribution from the Corporation in an amount
equal to the excess of (i) the Take-Over Price of the shares of Common Stock at
the time subject to the canceled option (to the extent such option is vested)
over (ii) the aggregate exercise price payable for such shares.  Such cash
distribution shall be paid within five (5) days following the cancellation of
the option by the Corporation.  No approval or consent of the Board shall be
required in connection with such option cancellation and cash distribution. 

     D.   The grant of options under the Automatic Option Grant Program shall in
no way affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets. 

III. REMAINING TERMS  

          The remaining terms of each option granted under the Automatic Option
Grant Program shall be the same as the terms in effect for option grants made
under the Discretionary Option Grant Program. 


                                          13


<PAGE>

                                     ARTICLE FOUR
                                    MISCELLANEOUS
I.   FINANCING

     A.   The Plan Administrator may permit any Optionee to pay the option
exercise price under the Plan by delivering a promissory note payable in one or
more installments.  The terms of any such promissory note (including the
interest rate and the terms of repayment) shall be established by the Plan
Administrator in its sole discretion.  Promissory notes may be authorized with
or without security or collateral.  In all events, the maximum credit available
to the Optionee may not exceed the sum of (i) the aggregate option exercise
price payable for the purchased shares plus (ii) any Federal, state and local
income and employment tax liability incurred by the Optionee in connection with
the option exercise. 

     B.   The Plan Administrator may, in its discretion, determine that one or
more such promissory notes shall be subject to forgiveness by the Corporation in
whole or in part upon such terms as the Plan Administrator may deem appropriate.

II.  CANCELLATION AND REGRANT OF OPTIONS

          The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Plan (including
outstanding options incorporated from the Predecessor Plan) and to grant in
substitution new options covering the same or different number of shares of
Common Stock but with an exercise price per share based on the Fair Market Value
per share of Common Stock on the new option grant date. 

III. TAX WITHHOLDING

     A.   The Corporation's obligation to deliver shares of Common Stock upon
the exercise of options or stock appreciation rights under the Plan shall be
subject to the satisfaction of all applicable Federal, state and local income
and employment tax withholding requirements. 

     B.   The Plan Administrator may, in its discretion, provide any or all
holders of Non-Statutory Options under the Plan with the right to use shares of
Common Stock in satisfaction of all or part of the Taxes incurred by such
holders in connection with the exercise of their options.  Such right may be
provided to any such holder in either or both of the following formats: 

                    (i)       STOCK WITHHOLDING:  The election to have the
     Corporation withhold, from the shares of Common Stock otherwise issuable
     upon the exercise of such Non-Statutory Option, a portion of those shares
     with an aggregate Fair Market Value equal to the percentage of the Taxes
     (not to exceed one hundred percent (100%)) designated by the holder. 

                    (ii)      STOCK DELIVERY:  The election to deliver to the
     Corporation, at the time the Non-Statutory Option is exercised, one or more
     shares of Common Stock 


                                          14


<PAGE>

     previously acquired by such holder (other than in connection with the
     option exercise triggering the Taxes) with an aggregate Fair Market Value
     equal to the percentage of the Taxes (not to exceed one hundred percent
     (100%)) designated by the holder. 

IV.  EFFECTIVE DATE AND TERM OF THE PLAN

     A.   The Discretionary Option Grant Program became effective on April 25,
1996, the Plan Effective Date and options may be granted under the Discretionary
Option Grant Program from and after the Plan Effective Date.  The Automatic
Option Grant Program became effective on April 25, 1996, the Automatic Option
Grant Program Effective Date and the initial option grants under the Automatic
Option Grant Program shall be made to the Eligible Directors at that time.  On
October 21, 1996, the Plan was amended to increase the number of shares issuable
thereunder to 5,500,000 shares and to make certain other amendments and to
delete provisions no longer required by Section 16 of the 1934 Act as a result
of the SEC's revision of Rule 16b-3.  However, no options granted under the Plan
on the basis of such increase may be exercised until the Plan amendment is
approved by the Corporation's stockholders.  If such stockholder approval is not
obtained within twelve (12) months after the date of Board approval of the
amendment, then all options previously granted under this Plan on the basis of
such increase shall terminate and cease to be outstanding, and no further
options shall be granted and no shares shall be issued under the Plan on the
basis of such increase. 

     B.   The Plan shall serve as the successor to the Predecessor Plan, and no
further option grants shall be made under the Predecessor Plan after the Plan
Effective Date.  All options outstanding under the Predecessor Plan as of such
date shall, immediately upon approval of the Plan by the Corporation's
stockholders, be incorporated into the Plan and treated as outstanding options
under the Plan.  However, each outstanding option so incorporated shall continue
to be governed solely by the terms of the documents evidencing such option, and
no provision of the Plan shall be deemed to affect or otherwise modify the
rights or obligations of the holders of such incorporated options with respect
to their acquisition of shares of Common Stock. 

     C.   The option/vesting acceleration provisions of Article Two relating to
Corporate Transactions and Changes in Control may, in the Plan Administrator's
discretion, be extended to one or more options incorporated from the Predecessor
Plan which do not otherwise provide for such acceleration. 

     D.   The Plan shall terminate upon the EARLIEST of (i) February 28, 2006,
(ii) the date on which all shares available for issuance under the Plan shall
have been issued pursuant to the exercise of the options under the Plan or (iii)
the termination of all outstanding options in connection with a Corporate
Transaction.  Upon such Plan termination, all options outstanding on such date
shall thereafter continue to have force and effect in accordance with the
provisions of the documents evidencing such options. 

V.   AMENDMENT OF THE PLAN 

     A.   The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects.  However, no such amendment or
modification shall 


                                          15


<PAGE>

adversely affect the rights and obligations with respect to options or stock
appreciation rights at the time outstanding under the Plan unless the Optionee
consents to such amendment or modification.  Notwithstanding the foregoing
clause, the Plan Administrator may amend an outstanding option to reduce the
number of option shares previously granted to an optionee provided the reduction
applies solely to unvested shares or shares which have not yet become
exercisable as of the date of the amendment.  In addition, the Board shall not,
without the approval of the Corporation's stockholders, (i) materially increase
the maximum number of shares issuable under the Plan, the number of shares for
which options may be granted under the Automatic Option Grant Program or the
maximum number of shares for which any one person may be granted options or
separately exercisable stock appreciation rights in the aggregate over the term
of the Plan, except for permissible adjustments in the event of certain changes
in the Corporation's capitalization, or (ii) materially modify the eligibility
requirements for Plan participation. 

     B.   Options to purchase shares of Common Stock may be granted under the
Plan that are in excess of the number of shares then available for issuance
under the Plan, provided any excess shares actually issued under the Plan are
held in escrow until there is obtained stockholder approval of an amendment
sufficiently increasing the number of shares of Common Stock available for
issuance under the Plan.  If such stockholder approval is not obtained within
twelve (12) months after the date the first such excess issuances are made, then
(i) any unexercised options granted on the basis of such excess shares shall
terminate and cease to be outstanding and (ii) the Corporation shall promptly
refund to the Optionees the exercise price paid for any excess shares issued
under the Plan and held in escrow, together with interest (at the applicable
Short Term Federal Rate) for the period the shares were held in escrow, and such
shares shall thereupon be automatically canceled and cease to be outstanding. 

VI.  USE OF PROCEEDS

          Any cash proceeds received by the Corporation from the sale of shares
of Common Stock under the Plan shall be used for general corporate purposes.

VII. REGULATORY APPROVALS

     A.   The implementation of the Plan, the granting of any option or stock
appreciation right under the Plan and the issuance of any shares of Common Stock
upon the exercise of any option or stock appreciation right shall be subject to
the Corporation's procurement of all approvals and permits required by
regulatory authorities having jurisdiction over the Plan, the options and stock
appreciation rights granted under it and the shares of Common Stock issued
pursuant to it. 

     B.   No shares of Common Stock or other assets shall be issued or delivered
under the Plan unless and until there shall have been compliance with all
applicable requirements of Federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any stock exchange (or the Nasdaq National Market, if applicable) on which
Common Stock is then listed for trading. 


                                          16


<PAGE>


VIII. NO EMPLOYMENT/SERVICE RIGHTS

          Nothing in the Plan shall confer upon the Optionee any right to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining such person) or of the Optionee, which rights
are hereby expressly reserved by each, to terminate such person's Service at any
time for any reason, with or without cause.


                                          17


<PAGE>



                                       APPENDIX

          The following definitions shall be in effect under the Plan:

     A.   AUTOMATIC OPTION GRANT PROGRAM shall mean the automatic option grant
program in effect under the Plan. 

     B.   AUTOMATIC OPTION GRANT PROGRAM EFFECTIVE DATE shall mean the Section
12(g) Registration Date. 

     C.   BOARD shall mean the Corporation's Board of Directors. 

     D.   CHANGE IN CONTROL shall mean a change in ownership or control of the
Corporation effected through either of the following transactions: 

                    (i)       the acquisition, directly or indirectly, by any
     person or related group of persons (other than the Corporation or a person
     that directly or indirectly controls, is controlled by, or is under common
     control with, the Corporation), of beneficial ownership (within the meaning
     of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty
     percent (50%) of the total combined voting power of the Corporation's
     outstanding securities pursuant to a tender or exchange offer made directly
     to the Corporation's stockholders which the Board does not recommend such
     stockholders to accept, or

                    (ii)      a change in the composition of the Board over a
     period of thirty-six (36) consecutive months or less such that a majority
     of the Board members ceases, by reason of one or more contested elections
     for Board membership, to be comprised of individuals who either (A) have
     been Board members continuously since the beginning of such period or (B)
     have been elected or nominated for election as Board members during such
     period by at least a majority of the Board members described in clause (A)
     who were still in office at the time the Board approved such election or
     nomination.

     E.   CODE shall mean the Internal Revenue Code of 1986, as amended. 

     F.   COMMON STOCK shall mean the Corporation's common stock. 

     G.   CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party: 

                    (i)       a merger or consolidation in which securities
     possessing more than fifty percent (50%) of the total combined voting power
     of the Corporation's outstanding securities are transferred to a person or
     persons different from the persons holding those securities immediately
     prior to such transaction; or 


                                         A-1


<PAGE>


                    (ii)      the sale, transfer or other disposition of all or
     substantially all of the Corporation's assets in complete liquidation or
     dissolution of the Corporation. 

     H.   CORPORATION shall mean Heartport, Inc., a Delaware corporation.

     I.   DISCRETIONARY OPTION GRANT PROGRAM shall mean the discretionary option
grant program in effect under the Plan.

     J.   ELIGIBLE DIRECTOR shall mean a non-employee Board member eligible to
participate in the Automatic Option Grant Program in accordance with the
eligibility provisions of Article One.

     K.   EMPLOYEE shall mean an individual who is in the employ of the 
Corporation (or any Parent or Subsidiary), subject to the control and 
direction of the employer entity as to both the work to be performed and the 
manner and method of performance. 

     L.   EXERCISE DATE shall mean the date on which the Corporation shall 
have received written notice of the option exercise. 

     M.   FAIR MARKET VALUE per share of Common Stock on any relevant date 
shall be determined in accordance with the following provisions: 

                    (i)       If the Common Stock is at the time traded on the
     Nasdaq National Market, then the Fair Market Value shall be the closing
     selling price per share of Common Stock on the date in question, as such
     price is reported by the National Association of Securities Dealers on the
     Nasdaq National Market or any successor system.  If there is no closing
     selling price for the Common Stock on the date in question, then the Fair
     Market Value shall be the closing selling price on the last preceding date
     for which such quotation exists. 

                    (ii)      If the Common Stock is at the time listed on any
     Stock Exchange, then the Fair Market Value shall be the closing selling
     price per share of Common Stock on the date in question on the Stock
     Exchange determined by the Plan Administrator to be the primary market for
     the Common Stock, as such price is officially quoted in the composite tape
     of transactions on such exchange.  If there is no closing selling price for
     the Common Stock on the date in question, then the Fair Market Value shall
     be the closing selling price  on the last preceding date for which such
     quotation exists. 

                    (iii)     For purposes of option grants made on the date the
     Underwriting Agreement is executed and the initial public offering price of
     the Common Stock is established, the Fair Market Value shall be deemed to
     be equal to the established initial offering price per share.  For purposes
     of option grants made prior to such date, the Fair Market Value shall be
     determined by the Plan Administrator after taking into account such factors
     as the Plan Administrator shall deem appropriate. 


                                         A-2

<PAGE>

     N.  HOSTILE TAKE-OVER shall mean a change in ownership of the 
Corporation effected through the following transaction:

                    (i)       the acquisition, directly or indirectly, by any
     person or related group of persons (other than the Corporation or a person
     that directly or indirectly controls, is controlled by, or is under common
     control with, the Corporation) of beneficial ownership (within the meaning
     of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty
     percent (50%) of the total combined voting power of the Corporation's
     outstanding securities  pursuant to a tender or exchange offer made
     directly to the Corporation's stockholders which the Board does not
     recommend such stockholders to accept, AND

                    (ii)      more than fifty percent (50%) of the securities so
     acquired are accepted from persons other than Section 16 Insiders. 

     O.  INCENTIVE OPTION shall mean an option which satisfies the requirements
of Code Section 422.

     P.  INVOLUNTARY TERMINATION shall mean the termination of the Service of 
any individual which occurs by reason of: 

                    (i)       such individual's involuntary dismissal or
     discharge by the Corporation for reasons other than Misconduct, or 

                    (ii)      such individual's voluntary resignation following
     (A) a change in his or her position with the Corporation which materially
     reduces his or her level of responsibility, (B) a reduction in his or her
     level of compensation (including base salary, fringe benefits and
     participation in corporate-performance based bonus or incentive programs)
     by more than fifteen percent (15%) or (C) a relocation of such individual's
     place of employment by more than fifty (50) miles, provided and only if
     such change, reduction or relocation is effected by the Corporation without
     the individual's consent.

     Q.  MISCONDUCT shall mean the commission of any act of fraud, 
embezzlement or dishonesty by the Optionee, any unauthorized use or 
disclosure by such person of confidential information or trade secrets of the 
Corporation (or any Parent or Subsidiary), or any other intentional 
misconduct by such person adversely affecting the business or affairs of the 
Corporation (or any Parent or Subsidiary) in a material manner.  The 
foregoing definition shall not be deemed to be inclusive of all the acts or 
omissions which the Corporation (or any Parent or Subsidiary) may consider as 
grounds for the dismissal or discharge of any Optionee or other person in the 
Service of the Corporation (or any Parent or Subsidiary). 

     R.  1934 ACT shall mean the Securities Exchange Act of 1934, as amended. 

     S.  NON-STATUTORY OPTION shall mean an option not intended to satisfy 
the requirements of Code Section 422.


                                         A-3

<PAGE>

     T.   OPTIONEE shall mean any person to whom an option is granted under the
Discretionary Option Grant or Automatic Option Grant Program. 

     U.   PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain. 

     V.   PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the inability
of the Optionee to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment expected to result in death
or to be of continuous duration of twelve (12) months or more. 

     W.   PLAN shall mean the Corporation's 1996 Stock Option Plan, as set forth
in this document. 

     X.   PLAN ADMINISTRATOR shall mean the particular entity, whether the
Primary Committee, the Board or the Secondary Committee, which is authorized to
administer the Discretionary Option Grant Program with respect to one or more
classes of eligible persons, to the extent such entity is carrying out its
administrative functions under those programs with respect to the persons under
its jurisdiction. 

     Y.   PLAN EFFECTIVE DATE shall mean the Section 12(g) Registration Date. 

     Z.   PREDECESSOR PLAN shall mean the Corporation's existing 1993 Stock
Option Plan.

     AA.  PRIMARY COMMITTEE shall mean the committee of two (2) or more
non-employee Board members appointed by the Board to administer the
Discretionary Option Grant Program with respect to Section 16 Insiders. 

     BB.  SECONDARY COMMITTEE shall mean a committee of one (1) or more Board
members appointed by the Board or Primary Committee to administer the
Discretionary Option Grant Program with respect to eligible persons other than
Section 16 Insiders. 

     CC.  SECTION 16 INSIDER shall mean an officer or director of the
Corporation subject to the short-swing profit liabilities of Section 16 of the
1934 Act. 

     DD.  SECTION 12(g) REGISTRATION DATE shall mean the first date on which the
Common Stock is registered under Section 12(g) of the 1934 Act. 

     EE.  SERVICE shall mean the provision of services to the Corporation (or
any Parent or Subsidiary) by a person in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor, except to the extent otherwise specifically provided in the documents
evidencing the option grant. 


                                         A-4

<PAGE>

     FF.  STOCK EXCHANGE shall mean either the American Stock Exchange or the
New York Stock Exchange. 

     GG.  SUBSIDIARY shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. 

     HH.  TAKE-OVER PRICE shall mean the GREATER of (i) the Fair Market Value
per share of Common Stock on the date the option is surrendered to the
Corporation in connection with a Hostile Take-Over or (ii) the highest reported
price per share of Common Stock paid by the tender offeror in effecting such
Hostile Take-Over.  However, if the surrendered option is an Incentive Option,
the Take-Over Price shall not exceed the clause (i) price per share. 

     II.  TAXES shall mean the Federal, state and local income and employment
tax liabilities incurred by the holder of Non-Statutory Options or unvested
shares of Common Stock in connection with the exercise of those options or the
vesting of those shares. 

     JJ.  STOCKHOLDER shall mean the owner of stock (as determined under Code
Section 424(d)) possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Corporation (or any Parent or
Subsidiary). 

     KK.  UNDERWRITING AGREEMENT shall mean the agreement between the
Corporation and the underwriter or underwriters managing the initial public
offering of the Common Stock.


                                         A-5