Document:

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                                                                   Exhibit 10.09

                          CADENCE DESIGN SYSTEMS, INC.

               1996 DEFERRED COMPENSATION VENTURE INVESTMENT PLAN

                              AMENDED AND RESTATED

                            EFFECTIVE JANUARY 1, 2001

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                          CADENCE DESIGN SYSTEMS, INC.
               1996 DEFERRED COMPENSATION VENTURE INVESTMENT PLAN
                              AMENDED AND RESTATED
                            EFFECTIVE JANUARY 1, 2001

        CADENCE DESIGN SYSTEMS, INC. a Delaware corporation (referred to
hereafter as the "Employer") established effective January 1, 1996, and amended
and restated effective January 1, 2000, the Cadence Design Systems, Inc. 1996
Deferred Compensation Venture Investment Plan (the "Plan"), an unfunded plan for
the purpose of providing deferred compensation for a select group of management
and highly compensated executives. The Employer hereby amends and restates the
Plan in its entirety effective January 1, 2001, to reflect prior and new
amendments to the Plan.

                                    RECITALS

        WHEREAS, those employees and directors identified by the Compensation
Committee of the Board of Directors of the Employer or any other committee
designated by the Board of Directors of the Employer to administer this plan in
accordance with Section 8 hereof (hereinafter referred to as the "Committee") as
eligible to participate in this Plan (each of whom is referred to hereafter as
the "Employee" or collectively as the "Employees") are employed by Employer; and

        WHEREAS, Employer adopted, effective January 1, 1996, an unfunded
deferred compensation plan (the "Plan" as defined below) to pay certain deferred
compensation and/or related benefits to or for the benefit of Employees, or a
designated Beneficiary, or both;

        WHEREAS, Employer desires to amend and restate the Plan to clarify the
circumstances surrounding the timing and form of distributions and to
incorporate prior amendments into a single document.

        NOW, THEREFORE, the Employer hereby amends and restates the Plan
effective January 1, 2001.

                                    SECTION 1

                                   DEFINITIONS

        1.1 "ACCOUNT" shall mean the separate account(s) established under this
Plan and the Trust for each participating Employee. Employer shall furnish each
participant with a statement of his or her account balance at least annually.

        1.2 "BENEFICIARY" shall mean a person designated by the Employee to
receive Employee's deferred compensation benefits in the event of his or her
death.

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        1.3 "CHANGE IN CONTROL" shall have the meaning set forth in Section 5.1
of the Plan.

        1.4 "CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations promulgated thereunder.

        1.5 "COMMITTEE" shall mean the Compensation Committee of the Board of
Directors of the Employer or any other committee designated by the Board of
Directors of the Employer, or the Compensation Committee of the Board of
Directors of the Employer, to administer this Plan in accordance with Section 8
hereof.

        1.6 "COMPENSATION" shall mean, for the period beginning on the Effective
Date through March 31, 1998, the base salary and cash bonuses described in
Section 3.1. Effective April 1, 1998, the term shall also include director's
fees described in Section 3.1.

        1.7 "EFFECTIVE DATE" shall mean January 1, 1996. The effective date of
this amendment and restatement of the Plan shall be January 1, 2001.

        1.8 "ELIGIBLE COMPENSATION" shall mean projected annual compensation
from the Employer determined on an annual basis by the Employer at or before the
beginning of the Plan, which may consist of salary, bonus, and, and/or incentive
payments, determined before any deductions under any qualified plan of the
Employer (including a Section 401(k) plan or a Section 125 plan) and excluding
any special or non-recurring compensatory payments such as moving or relocation
bonuses or automobile allowances.

        1.9 "EMPLOYEE" shall mean each employee of Employer who (a) is a U.S.
citizen or is a lawful permanent resident of the U.S., within the meaning of
Code Section 7701(b)(1)(A)(i), (b) earns solely U.S. source income from
Employer, and (c) is exclusively on Employer's U.S. payroll system, or a
Beneficiary of such individual where the context so requires. Effective April 1,
1998, the term shall also include each Non-Employee Director or a Beneficiary of
a Non-Employee Director where the context so requires.

        1.10 "EMPLOYER" shall mean Cadence Design Systems, Inc., a Delaware
corporation, and any successor organization thereto. This term shall also
include any subsidiaries or affiliates of the Employer.

        1.11 "EMPLOYER CONTRIBUTIONS" shall mean the Employer's discretionary
contribution, if any, pursuant to Section 3.1(b) of the Plan.

        1.12 "NON-EMPLOYEE DIRECTOR" shall mean, effective April 1, 1998, a
director of the Employer who is not otherwise an employee of the Employer.

        1.13 "PLAN YEAR" shall mean the calendar year beginning each January 1
and ending December 31.

        1.14 "PLAN" shall mean the Cadence Design Systems, Inc. 1996 Deferred
Compensation Venture Investment Plan.

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        1.15 "PERMANENT DISABILITY" shall mean that the Employee is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or otherwise meets the definition of "Permanent Disability" as set forth
in the Employer's Long Term Disability Plan. An Employee will not be considered
to have a Permanent Disability unless he or she furnishes proof of such
condition sufficient to satisfy the Employer, in its sole discretion.

        1.16 "SUBSIDIARY" shall mean any corporation (other than the Employer)
in an unbroken chain of corporations or other entities beginning with the
Employer, if each of the entities other than the last entity in the unbroken
chain owns stock, partnership rights or other ownership interest possessing
fifty (50) percent or more of the total combined voting power of all classes of
stock, partnership rights or other ownership interest in one of the other
entities in such chain.

        1.17 "TALITY" shall mean the entity formed to own and operate Cadence
Design Systems, Inc.'s electronics design services group business under the name
"Tality Corporation" or any other name.

        1.18 "TRUST" or TRUST AGREEMENT" shall mean the Cadence Design Systems,
Inc. 1996 Deferred Compensation Venture Investment Trust Agreement, including
any amendments thereto, entered into between the Employer and the Trustee to
carry out the provisions of the Plan.

        1.19 "TRUST FUND" shall mean the cash and other assets and/or properties
held and administered by Trustee pursuant to the Trust to carry out the
provisions of the Plan.

        1.20 "TRUSTEE" shall mean the designated Trustee acting at any time
under the Trust.

                                    SECTION 2

                                   ELIGIBILITY

        2.1 ELIGIBILITY. Eligibility to participate in the Plan shall be limited
to Employees of the Employer who (a) have Eligible Compensation of at least
$150,000 for the Plan Year, (b) are classified as officers, vice-presidents,
directors, or an equivalent title, and (c) have been selected by the Committee
to participate in the Plan. Participation in the Plan shall commence as of the
effective date of the Employee's enrollment form, which shall be completed and
submitted to the Employer in accordance with the provisions of Section 3.3.
Nothing in the Plan or in any administrative form used to administer the Plan or
Trust shall be construed to require any contributions to the Plan on behalf of
the Employee by Employer. The Committee has the discretion to end the
eligibility of one or more participating Employees at any time in the sole
discretion of the Committee.

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        Notwithstanding the foregoing and effective April 1, 1998, Non-Employee
Directors shall be eligible to participate in the Plan and a Non-Employee
Director shall commence participation in the Plan as of the later of April 1,
1998 or the date the Non-Employee Director first becomes a Non-Employee
Director, provided that deferral of Compensation under the Plan shall not
commence until the Non-Employee Director has complied with the election
procedures set forth in Section 3.3.

                                    SECTION 3

                              DEFERRED COMPENSATION

        3.1 DEFERRED COMPENSATION. (a) Each participating Employee may elect, in
accordance with Section 3.3 of this Plan, to defer annually the receipt of a
portion of the Compensation for active service otherwise payable to him or her
by Employer during each Plan Year or portion of a Plan Year that the Employee
shall be employed by the Employer. Any Compensation deferred by Employee
pursuant to Section 3.3 shall be recorded by the Employer in an Account,
maintained in the name of the Employee, which Account shall be credited with a
dollar amount equal to the total amount of Compensation deferred during each
Plan Year under the Plan, together with earnings thereon credited in accordance
with Section 3.7 and expenses allocated thereto in accordance with Section 3.8.
The amount or percentage of Compensation that Employee elects to defer under
Section 3.3 will remain constant for the year of the election and shall not be
subject to change during such year. Effective April 1, 1998, each such deferral
election as to "base salary" or "director's fees" or discontinuance of a
deferral election as to "base salary" or "director's fees" will continue in
force for each successive year until or unless suspended or modified by the
filing of a subsequent election with the Employer by the Employee or
Non-Employee Director in accordance with Section 3.3 of the Plan. Each deferral
election as to an Employee's "cash bonus" shall continue in force only for the
single year with respect to which it was made and shall not apply to any
successive years. Any deferral election with respect to a "cash bonus" must be
made prior to the time the amount of the bonus is determined, prior to the end
of the period of time as to which the bonus is awarded, and at a time that the
amount of any such bonus remains substantially uncertain. All deferrals pursuant
to this Section 3.1 shall be fully vested at all times. Effective April 1, 1998,
deferral elections shall be subject to a minimum dollar and maximum percentage
amounts as follows: (i) the minimum annual deferral amount is $10,000 which
shall be withheld from the Employee's or Non-Employee Director's Compensation,
and (ii) the maximum deferral percentage amount is 80% of the Employee's "base
salary," 100% of the Employee's "cash bonus," and 100% of the Non-Employee
Director's "director's fees." For purposes of the Plan, "base salary" for a
given Plan Year means an Employee's regular annual compensation payable during
the Plan Year, excluding bonuses, commissions, overtime, incentive payments,
non-monetary awards, compensation deferred pursuant to all Section 125
(cafeteria) or Section 401(k) (savings) plans of the Employer and other special
compensation, and reduced by the tax withholding obligations imposed on the
Employer and any other withholding requirements imposed by law with respect to
such amounts. For purposes of the Plan, "cash bonus" shall mean amounts (if any)
awarded

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under the bonus policies maintained by the Employer and any commissions earned
on sales. Effective April 1, 1998, for purposes of the Plan, "director's fees"
for a given Plan Year means the annual retainer, meeting fees, committee meeting
fees, and consulting fees payable during the Plan Year.

               (b) Employer shall not be obligated to make any other
contribution to the Plan on behalf of any Employee at any time. Employer may
make Employer Contributions to the Plan on behalf of one or more Employees.
Employer Contributions, if any, made to Accounts of Employees shall be
determined in the sole and absolute discretion of the Employer, and may be made
without regard to whether the Employee to whose account such contribution is
credited has made, or is making, contributions pursuant to Section 3.1(a). The
Employer shall not be bound or obligated to apply any specific formula or basis
for calculating the amount of any Employer Contributions and Employer shall have
sole and absolute discretion as to the allocation of Employer Contributions
among participating Employee Accounts. The use of any particular formula or
basis for making an Employer Contribution in one Plan Year shall not bind or
obligate the Employer to use such formula or basis in any other Plan Year.
Employer Contributions may be subject to a substantial risk of forfeiture in
accordance with the terms of a vesting schedule, which may be selected by the
Employer in its sole and absolute discretion.

               (c) Amounts deferred under the Plan shall be calculated and
withheld from the Employee's base salary and/or cash bonus after such
compensation has been reduced to reflect any tax withholding obligations imposed
on the Employer, any other withholding requirements imposed by law, salary
reduction contributions to the Employer's Code Section 125 (cafeteria) and Code
Section 401(k) (savings) plans, but before any reductions for contributions to
the Employer's Code Section 423 (employee stock purchase) plan or the Cadence
Design Systems, Inc. 1994 Deferred Compensation Plan.

        3.2 PAYMENT OF ACCOUNT BALANCES. (a) The Employee shall elect whether he
or she will receive distribution of his or her entire Account, subject to tax
withholding requirements, (i) upon reaching a specified age, (ii) upon passage
of a specified number of years, (iii) upon termination of employment of Employee
with Employer, (iv) upon the earlier to occur of (A) termination of employment
of Employee with Employer or (B) passage of a specified number of years or
attainment of a specified age, or (v) upon the later to occur of (A) termination
of employment of Employee with Employer or (B) passage of a specified number of
years or attainment of a specified age, as elected by Employee in accordance
with the form established by the Committee. Such form may permit an election
among some or all of the alternatives listed in this Section 3.2, as determined
in the Committee's sole discretion. A designation of the time of distribution
shall be required as a condition of participation under this Plan. The Employee
shall also elect to receive all amounts payable to him or her in a lump sum or
in equal monthly installments over a designated period of five or ten years,
pursuant to the provisions of Section 3.2(e). These elections shall be made in
accordance with Section 3.4 of this Plan. References to "termination of
employment" in this Section 3.2 shall include references to "termination of
service as a Non-Employee Director of the Employer (except in the event such
termination is due to becoming an Employee)" where the context so requires. All
payments shall be made in the form of cash.

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               (b) Distribution shall be made to the maximum extent allowable
under the election made by Employee, except that no distribution shall be made
to the extent that the receipt of such distribution, when combined with the
receipt of all other "applicable employee remuneration" (as defined in Code
Section 162(m)(4)), would cause any remuneration received by the Employee to be
nondeductible by the Employer under Code Section 162(m)(1). The portion of any
distributable amount that is not distributed by operation of this Section 3.2(b)
shall be distributed in subsequent years in the manner elected by the Employee
until the Employee's Account has been fully liquidated. For Employees who have
elected to receive payment in a lump sum or over five or ten years, the
commencement date of the lump sum payment or the five or ten-year period
(whichever is applicable) shall be automatically extended, when necessary to
satisfy the requirements of this subsection, for one-year periods until all
Account balances have been distributed in the manner elected by the Employee.

               (c) Upon termination of Employee's employment with Employer by
reason of death or Permanent Disability prior to the time when payment of
Account balances otherwise would commence under the provisions of Section
3.2(a), Employee or Employee's designated Beneficiary will be entitled to
receive all amounts credited to the Account of Employee as of the date of his or
her death or Permanent Disability (notwithstanding any contrary election to
receive distributions under the first sentence of Section 3.2(a)). Upon
termination of Employee's employment with Employer by reason other than death or
Permanent Disability prior to the date when payment of Account balances
otherwise would commence under the provisions of Section 3.2(a), the Employer
may, in the sole discretion of the Committee, distribute to Employee or
Employee's designated Beneficiary all amounts credited to the Employee's Account
as of the date of such termination (notwithstanding any contrary election to
receive distributions under the first sentence of Section 3.2(a)). Said amounts
shall be payable in the form determined pursuant to the provisions of Section
3.2(e).

               (d) Upon the death of Employee prior to complete distribution to
him or her of the entire balance of his or her Account (and after the date of
termination of employment with Employer), the balance of his or her Account on
the date of death shall be payable to Employee's designated Beneficiary pursuant
to Section 3.2(e). Notwithstanding any other provision of the Plan to the
contrary, except for Section 3.2(f), the Employee's designated Beneficiary may
receive the distribution of the remaining portion of such deceased Employee's
Account in the form of a lump sum if the Beneficiary requests such a
distribution and the Committee, in its sole discretion, consents to such a
distribution.

               (e) The Employer shall distribute or direct distribution of the
balance of amounts previously credited to Employee's Account, in a lump sum, or
in monthly installments over a period of five (5) years or ten (10) years, as
Employee shall designate pursuant to a distribution election. The Employee's
distribution election shall be in the form established by the Committee in
accordance with the terms of the Plan. A designation of the form of distribution
shall be required as a condition of participation under this Plan. Subject to
the other provisions of this Section 3.2, distribution of the lump sum or the
first installment generally shall be made or commence within ninety (90) days
following the date specified in the first sentence of Section 3.2(a). Subsequent
installments, if any, shall be made on the first day of each month

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following the first installment as determined by Employer. The amount of each
installment shall be calculated by dividing the Account balance as of the date
of the distribution by the number of installments remaining pursuant to the
Employee's distribution election. Each such installment, if any, shall take into
account earnings (or losses) allocated to the balance of the Account remaining
unpaid. If at the time for a distribution of an installment payment, the balance
in an Employee's Account that may be distributed is less than the amount of the
distribution calculated in accordance with the prior two sentences, then at such
time only that lesser amount that may be distributed shall be distributed to the
Employee. The remaining amount (subject to any necessary adjustments as
determined by the Committee) that should have been distributed with such
installment shall be distributed at the earliest administratively convenient
time following the time that additional assets that may be distributed have been
allocated to the Employee's Account. If the balance in an Employee's Account
cannot be distributed in its entirety on the date for final distribution of the
Employee's Account under such Employee's last effective distribution election,
then as that balance becomes distributable, it shall be distributed to such
Employee as soon as reasonably administratively convenient.

               (f) Notwithstanding any other provisions of the Plan or the Trust
to the contrary, no distribution will be made pursuant to the terms of the Plan
if the distribution would require either the transfer of a limited partnership
interest in Telos Venture Partners, L.P. or any other venture capital investment
partnership in which some or all of the assets of the Trust might be invested
(the "Partnership") or a distribution of assets from the Partnership. In
addition, no distribution will be made if the Committee determines in its sole
discretion that the Plan's assets would be insufficient to satisfy any future
capital calls anticipated to be made by the General Partner of the Partnership,
or if the Employee's Account has any amounts relating to unpaid debt or expenses
thereon allocated to such Account. The terms of an Employee's election shall be
followed to the fullest extent possible upon the distribution of assets from the
Partnership to the Trust as determined in accordance with the terms of the
Partnership Agreement. No provision of this Plan or the Trust Agreement (except
for those provisions relating to the Insolvency of the Employer as set forth in
Article 7 of the Trust Agreement) shall have any impact on the operation of the
Partnership.

               (g) Effective April 1, 1998, for purposes of this Section 3.2,
reference to termination of employment shall also include termination of service
as a Non-Employee Director of the Employer (except in the event such termination
is due to becoming an Employee).

        3.3 ELECTION TO DEFER COMPENSATION. Each election of an Employee to
defer Compensation as provided in Section 3.1 of the Plan shall be in writing,
signed by the Employee, and delivered to Employer, together with all other
documents required under the provisions of this Plan, at least twenty (20) days
(or such other period of time determined by the Committee and communicated to
those Employees who are eligible to participate in the Plan) prior to the
beginning of the Plan Year with respect to which the Compensation to be deferred
is otherwise payable to Employee; provided, however, that an Employee who is
hired or promoted during a Plan Year to a position of eligibility for
participation in the Plan or a Non-Employee Director who is elected to become a
Non-Employee Director during a Plan Year shall have thirty (30) days from the
date of notification of eligibility for participation in the Plan in which to
submit

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the required election documents for the then current Plan Year. Any deferral
election made by Employee shall be irrevocable with respect to any Compensation
covered by such election, including Compensation payable in the Plan Year in
which an election suspending or modifying the prior deferral election for the
subsequent Plan Year is delivered to the Employer. The Employer shall withhold
the amount or percentage of base salary specified to be deferred in equal
amounts for each payroll period and shall withhold the amount or percentage of
cash bonus specified to be deferred at the time or times such bonus is or
otherwise would be paid to the Employee. The election to defer Compensation
shall be in the form established by the Committee in accordance with the terms
of the Plan. Effective April 1, 1998, the Employer shall withhold the amount or
percentage of director's fees specified to be deferred at the time or times such
director's fees are or otherwise would be paid to the Non-Employee Director.
Notwithstanding the foregoing and effective April 1, 1998, with respect to
Compensation payable to a Non-Employee Director for the Plan Year ending
December 31, 1998, but which will not be paid to the Non-Employee Director until
after March 31, 1998, the Non-Employee Director may make a deferral election
with respect to such Compensation until March 31, 1998.

        3.4 DISTRIBUTION ELECTION. The initial distribution election of an
Employee as provided in Section 3.2 of this Plan shall be in writing, signed by
the Employee, and delivered to Employer, together with all other documents
required under the provisions of this Plan, at least twenty (20) days (or such
other period of time determined by the Committee and communicated to those
Employees who are eligible to participate in the Plan) prior to the beginning of
the Plan Year with respect to which the distribution election is to apply;
provided however, that an Employee who is hired or promoted during a Plan Year
to a position of eligibility for participation in the Plan or, effective April
1, 1998, a Non-Employee Director who is elected to become a Non-Employee
Director during a Plan Year shall have thirty (30) days from the date of
notification of eligibility for participation in the Plan in which to submit the
required distribution election documents. If permitted by the Committee, an
Employee may change the terms of his or her initial distribution election by
making a new election, and any such new election will be effective as of the
later of the date that is (a) six (6) months following the date the new election
is made or (b) the first day of the Plan Year following the Plan Year in which
the new election is made and will apply to the Employee's entire Account. An
Employee may not make a new election once distributions from the Plan have
commenced or which would first become effective at a time when distributions
from the Plan have commenced. Employee's distribution election shall be in the
form established by the Committee in accordance with the terms of the Plan.

        3.5 PAYMENT UPON CHANGE IN CONTROL. Notwithstanding any other provisions
of this Plan (including without limitation Section 3.2), the aggregate balance
credited to and held in the Employees' Accounts shall be distributed to
Employees in a lump sum on the thirtieth day following a Change in Control
(except that distribution shall be on the sixtieth day in the case of a Change
in Control under Section 5.1(a)(1)), as defined in Section 5.1, unless the
Committee, the Board of Directors of the Employer, or the 401(k)/NQDC
Administrative Committee of the Employer (as each is composed immediately prior
to such Change in Control), in the sole discretion of any of the foregoing,
decides prior to that date that Employees' Accounts shall remain in the Plan.

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        3.6 EMPLOYEE'S RIGHTS UNSECURED. The right of the Employee or his or her
designated Beneficiary to receive a distribution hereunder shall be an unsecured
claim against the general assets of the Employer, and neither the Employee nor
his or her designated Beneficiary shall have any rights in or against any amount
credited to his or her Account or any specific assets of the Employer, except as
otherwise provided in the Trust. Nothing contained in this Plan, and no action
taken pursuant to its provisions, shall create or be construed to create a trust
of any kind or a fiduciary relationship between the Plan and the Employer or any
other person.

        3.7 INVESTMENT OF CONTRIBUTIONS. (a) The investment options available to
each Employee shall be determined by the Employer and described in a separate
written document, a copy of which shall be attached hereto and by this reference
is incorporated herein. Initially the Employer intends to invest all of the
assets of the Trust to acquire a limited partnership interest in the
Partnership, and investment in the Partnership shall be the sole investment
option available to Employees. In the event that the Employer makes more than
one investment option available to Employees, each Employee shall have the sole
and exclusive right to direct the Trustee as to the investment of the portion of
his or her Account attributable to distributions from the Partnership among
those investment options in accordance with policies and procedures implemented
by the Trustee and the terms and conditions of those investment options. An
Employee whose service with the Employer has terminated also shall be permitted
to direct the Trustee as to the investment of the distributable balance in their
Accounts among those investment options in accordance with policies and
procedures implemented by the Trustee and the terms and conditions of those
investment options. Notwithstanding the preceding sentence, investment in the
Partnership, however, shall only be available to Employees of the Employer.
Employer shall not be liable for any investment decision made by any Employee
while such funds are held by the Trustee. Employer may provide in its sole
discretion for the transfer of some or all of the Plan's assets from the Trust
to another trust established under the terms of a non-qualified deferred
compensation plan sponsored by the Employer in order to provide additional
investment options to Employees; provided, however, that prior to any such
transfer, Employer shall have determined (after consulting with legal counsel
for Employer with respect to the Plan) that such transfer shall not cause any
participating Employee to incur any income tax liability with respect to his or
her benefits under the Plan and shall not impair the rights of any Employee to
accrue and/or receive benefits under the Plan.

               (b) Accounts shall be credited with the actual financial
performance or earnings generated by such investments made by the Trustee in
accordance with the terms of the Plan and Trust, until the Account has been
fully distributed to the Employee or to the Employee's designated Beneficiary.
Notwithstanding the foregoing, Accounts shall be maintained, credited and
debited with respect to an investment in the Partnership as provided under the
terms of the Partnership Agreement. Furthermore, the Trust's limited partnership
interest in the Partnership for a given Plan Year which is acquired with
deferrals of Compensation from participating Employees shall be allocated to the
Accounts of those participating Employees in the same proportion as the deferred
amounts invested in the Partnership for such Plan Year are allocated to those
Accounts. Effective January 1, 1997, gains (losses) generated by the Partnership
for a Plan Year (excluding gains (losses) generated by

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investments in portfolio securities) are to be allocated to participating
Employees' Accounts in the same proportion that the sum of each such Employee's
Account balance at the beginning of the Plan Year plus his or her deferrals of
Compensation for such Plan Year bears to the total sum of the Account balances
of all such Employees at the beginning of the Plan Year plus the deferrals of
Compensation for all such Employees for such Plan Year. Subject to the
provisions of Section 3.8(c) below, the Trust's limited partnership interest in
the Partnership for a given Plan Year which is acquired with loan proceeds shall
be allocated to the Accounts of those participating Employees who remain
employed by the Employer (or a subsidiary or affiliate of the Employer) at the
end of such Plan Year in the same proportion as the deferred amounts invested in
the Partnership for such Plan Year are allocated to the Accounts of those
remaining Employees.

               (c) Notwithstanding any provision in this Section 3.7 to the
contrary, the Committee may determine not to take account of Employee's
designated investments, if any, and determine to have the Employee's Account
invested in any other manner as the Committee shall determine. The Committee may
also designate how the Plan's assets shall be invested for interim short-term
periods of time pending investment in the Partnership or following distribution
from the Partnership but prior to distribution from the Plan or re-investment in
the Plan (or a similar non-qualified deferred compensation plan) in another
investment option.

        3.8    ALLOCATION OF EXPENSES

               (a) Expenses of administering the Plan and the Trust which are
paid out of the Trust Fund shall be allocated to the Accounts of participating
Employees on a periodic basis determined by the Committee using any method which
the Committee determines is fair and equitable to participating Employees. The
selection of a given method of allocating expenses among participating
Employees' Accounts shall not be deemed to restrict the Committee in any manner
whatsoever from selecting a different method for future allocations or to imply
that a different method would not be fair and equitable to participating
Employees.

               (b) From time to time the Trustee may borrow funds to satisfy the
obligations of the Trust, whether to meet capital calls issued by the General
Partner of the Partnership or otherwise. The principal amount of any such loan
shall be allocated to the Accounts of participating Employees in a manner which
the Committee determines is fair and equitable, and for loan principal used to
acquire an interest in the Partnership, is also consistent with the allocation
of interests in the Partnership acquired with loan proceeds as described in
Section 3.7. The costs associated with interest expenses on that principal
amount (and any interest expenses incurred with respect to previously accrued
but unpaid interest), any other expenses incurred with respect to that principal
amount, as well as the costs associated with repayment of principal, shall be
allocated to the same Accounts to which the principal amounts were allocated
initially in proportion to the principal amounts allocated to the Accounts at
such time. Once additional interest or other expenses are allocated to an
Account, such expenses shall be treated as principal with respect to future
allocations of expenses related to that debt. Notwithstanding the foregoing, the
Committee shall have the authority to establish a different method for
allocating costs, expenses, and/or repayment of principal which it concludes is
fair and equitable to

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participating Employees. The selection of a given method of allocating expenses
among participating Employees' Accounts shall not be deemed to restrict the
Committee in any manner whatsoever from selecting a different method for future
allocations or to imply that a different method would not be fair and equitable
to participating Employees.

               (c) Notwithstanding any other provisions in this Plan, effective
January 1, 2000, and subject to the approval of any affected participating
Employee as to such Employee's account, any outstanding loans obtained by the
Trustee from the Employer on or before July 1, 2001, as permitted in the
immediately preceding Section 3.8(b), to cover capital calls issued by the
General Partner of the Partnership or otherwise, shall be repaid in full by the
transfer by the Trustee to the Employer of the limited partnership units in the
Partnership purchased with such loan proceeds. With such repayment, the Accounts
of the affected participating Employees shall not reflect the investment in such
transferred limited partnership units effective as of January 1, 2000.

        3.9 DISTRIBUTIONS OF PARTNERSHIP INTEREST WITH RESPECT TO ACTIVE
EMPLOYEES AND NON-EMPLOYEE DIRECTORS

               The following provisions of this Section 3.9 are effective April
1, 2000.

               (a) In the event of a distribution of partnership assets from the
Partnership (as defined in Section 3.2(f)) for the benefit of an Employee who is
currently in employment with the Employer or a Non-Employee Director who
continues to serve on the Board of Directors of the Employer, then such
distribution of the assets shall at the discretion of the Committee be (i)
liquidated and retained for pending capital calls required under the Partnership
or to satisfy any unpaid debt or expenses thereon allocated to the Employee's or
Non-Employee Director's account, or (ii) at the election of the Employee or
Non-Employee Director be (A) liquidated and retained in this Plan and
re-invested in the Partnership according to the terms of the Plan, the Trust,
and the Partnership, or (B) transferred to the Cadence Design Systems, Inc. 1994
Deferred Compensation Plan ("1994 Plan") for the benefit of the Employee or
Non-Employee Director if such individual is a participant under the 1994 Plan;
provided, however, that such transferred assets shall continue to be subject to
the Employee's or Non-Employee Director's distribution election for such
individual's benefit under this Plan unless such distribution election is
revised as permitted by the plan administrator of the 1994 Plan as authorized
under the 1994 Plan. If the Employee or Non-Employee Director is permitted but
does not make any election as to the disposition of the Partnership assets, then
such Partnership assets shall be transferred to the 1994 Plan as provided above.

        (b) In the event a distribution of partnership assets is transferred to
the 1994 Plan for the benefit of an Employee or Non-Employee Director as
provided above, then such assets shall be transferred (subject to the approval
of the plan administrator of the 1994 Plan in its sole discretion) to the trust
established under the 1994 Plan ("1994 Plan Trust") for the benefit of such
Employee or Non-Employee Director. Such transferred assets ("Transferred
Assets") shall be subject to the terms and conditions of the 1994 Plan Trust
provided that such Transferred Assets shall continue to be subject to the
Employee's or Non-Employee Director's distribution

                                       11
<PAGE>

election for the Transferred Assets under this Plan unless such distribution
election is revised as permitted by the 1994 Plan. Such amounts transferred from
the Trust to the 1994 Plan Trust may not be returned to this Plan or the Trust.
The transfer of such Transferred Funds shall not cause any of the individual's
rights to a distribution under the 1994 Plan or this Plan (including the
Transferred Funds) to be a secured right to a distribution under either plan.

                                    SECTION 4

                           DESIGNATION OF BENEFICIARY

        4.1 DESIGNATION OF BENEFICIARY. Employee may designate a Beneficiary or
Beneficiaries to receive any amount due hereunder by Employee by written notice
thereof to Employer at any time prior to his or her death and may revoke or
change the Beneficiary designated therein without the Beneficiary's consent by
written notice delivered to Employer at any time and from time to time prior to
Employee's death. If Employee is married and a resident of a community property
state, one half of any amount due hereunder which is the result of an amount
contributed to the Plan during such marriage while residing in a community
property state is the community property of the Employee's spouse and Employee
may designate a Beneficiary or Beneficiaries to receive only the Employee's
one-half interest. If Employee shall have failed to designate a Beneficiary, or
if no such Beneficiary shall survive him or her, then such amount shall be paid
to his or her estate. Designations of Beneficiaries shall be in the form
determined by the Committee.

                                    SECTION 5

                                CHANGE IN CONTROL

        5.1 CHANGE IN CONTROL. For the purposes of this Plan, "Change in
Control" means the happening of any of the following:

               (a) The first public announcement or public acknowledgment
(including without limitation, a report filed pursuant to Section 13(d) of the
Securities Exchange Act of 1934 as amended (the "Exchange Act")) by the Employer
that a "person," as such term is used in Sections 13(d) and 14(d) of the
Exchange Act (other than the Employer, a Subsidiary or an employee benefit plan
of the Employer or a Subsidiary, or other controlled affiliate of the Employer,
including any trustee of such plan acting as trustee), is or has become the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act or
comparable successor rule), directly or indirectly, of securities of the
Employer representing fifty percent (50%) or more of the combined voting power
of the Employer's then outstanding Common Stock entitled to vote in the election
of directors, where such person's beneficial ownership of the Employer's Common
Stock was not initiated by the Employer or approved by the Employer's Board of
Directors;

                                       12
<PAGE>

               (b) The sale, lease or other disposition of all or substantially
all of the assets of the Employer (but, effective September 15, 2000, not
including the formation or any public offering (including but not limited to the
initial or any subsequent public offering) of the common stock of Tality);

               (c) The merger or consolidation of the Employer with or into
another corporation not initiated by the Employer, in which the Employer is not
the surviving corporation and the stockholders of the Employer immediately prior
to the merger or consolidation fail to possess direct or indirect beneficial
ownership of more than eighty percent (80%) of the voting power of the
securities of the surviving corporation (or if the surviving corporation is a
controlled affiliate of another entity, then the required beneficial ownership
shall be determined with respect to the securities of that entity which controls
the surviving corporation and is not itself a controlled affiliate of any other
entity) immediately following such transaction, or a reverse merger not
initiated by the Employer, in which the Employer is the surviving corporation
and the stockholders of the Employer immediately prior to the reverse merger
fail to possess direct or indirect beneficial ownership of more than eighty
percent (80%) of the securities of the Employer (or if the Employer is a
controlled affiliate of another entity, then the required beneficial ownership
shall be determined with respect to the securities of that entity which controls
the Employer and is not itself a controlled affiliate of any other entity)
immediately following the reverse merger. For purposes of this Section 5.1(c),
any person who acquired securities of the Employer prior to the occurrence of a
merger, reverse merger, or consolidation in contemplation of such transaction
and who after such transaction possesses direct or indirect beneficial ownership
of at least ten percent (10%) of the Common Stock of the Employer or the
surviving corporation (or if the Employer or the surviving corporation is a
controlled affiliate, then of the appropriate entity as determined above)
immediately following such transaction shall not be included in the group of
stockholders of the Employer immediately prior to such transaction;

               (d) A change in the composition of the Board of Directors of the
Employer, as a result of which fewer than a majority of the directors are
Incumbent Directors. "Incumbent Directors" shall mean directors who either (i)
are directors of the Employer as of the date hereof, or (ii) are elected, or
nominated for election, to the Board of Directors of the Employer with the
affirmative votes of at least a majority of the Incumbent Directors at the time
of such election or nomination (but shall not include an individual whose
election or nomination is in connection with an actual or threatened proxy
contest relating to the election of directors to the Employer);or

               (e)  Any liquidation or dissolution of the Employer.

                                       13
<PAGE>

                                    SECTION 6

                                TRUST PROVISIONS

        6.1 TRUST AGREEMENT. The Employer shall establish the Trust within an
administratively reasonable period of time following the adoption of the Plan
for the purpose of retaining assets set aside by Employer pursuant to the Trust
Agreement for payment of amounts payable pursuant to the Plan. Any benefits not
paid from the Trust shall be paid solely from Employer's general funds, and any
benefits paid from the Trust shall be credited against and reduce by a
corresponding amount the Employer's liability to Employees under the Plan. No
special or separate fund, other than the Trust Agreement, shall be required to
be established and no other segregation of assets shall be required to be made
to assure the payment of any benefits hereunder. All Trust Funds shall be
subject to the claims of general creditors of the Employer in the event the
Employer is Insolvent as defined in Article 7 of the Trust Agreement. The
obligations of the Employer to pay benefits under the Plan constitute an
unfunded, unsecured promise to pay and Employee shall have no greater rights
than general creditors of the Employer.

                                    SECTION 7

                            AMENDMENT AND TERMINATION

        7.1 AMENDMENT. The Committee shall have the right to amend this Plan at
any time and from time to time, including a retroactive amendment. Any such
amendment shall become effective upon the date stated therein, and shall be
binding on all Employees, except as otherwise provided in such amendment;
provided, however, that any such amendment shall not affect adversely benefits
payable to an affected Employee without the Employee's written approval.

        7.2 TERMINATION. The Committee shall have the right to terminate this
Plan at any time and direct the lump sum payments of all assets held by the
Trust if the Employer is not Insolvent at that time (as defined in Article 7 of
the Trust Agreement), notwithstanding any other provision of the Plan to the
contrary (except for Section 3.2(f)).

                                    SECTION 8

                                 ADMINISTRATION

        8.1 ADMINISTRATION. The Committee shall administer and interpret this
Plan in accordance with the provisions of the Plan and the Trust Agreement. Any
determination or decision by the Committee shall be conclusive and binding on
all persons who at any time have or claim to have any interest whatever under
this Plan. The Committee may employ legal counsel, consultants, actuaries and
agents as it may deem desirable in the administration of the Plan and may rely
on the opinion of such counsel or the computations of such consultant or other
agent. The Committee shall have the authority to delegate some or all of the
powers and responsibilities under the Plan and the Trust Agreement to such
person or persons as it shall deem necessary, desirable or appropriate for
administration of the Plan.

                                       14
<PAGE>

        8.2 LIABILITY OF COMMITTEE; INDEMNIFICATION. To the maximum extent not
prohibited by law, no member of the Committee shall be liable to any person and
in any event shall be indemnified by the Employer for any action taken or
omitted in connection with the interpretation and administration of this Plan
unless attributable to his or her own bad faith or willful misconduct.

        8.3 EXPENSES. The costs of the establishment of the Plan and the
adoption of the Plan by Employer, including but not limited to legal and
accounting fees, shall be borne by Employer. The expenses of administering the
Plan and the Trust shall be borne by the Trust unless the Employer elects in its
sole discretion to pay some or all of those expenses; provided, however, that
Employer shall bear, and shall not be reimbursed by, the Trust for any tax
liability of Employer associated with the investment of assets by the Trust.

                                    SECTION 9

                            GENERAL AND MISCELLANEOUS

        9.1 RIGHTS AGAINST EMPLOYER. Except as expressly provided by the Plan,
the establishment of this Plan shall not be construed as giving to any Employee
or to any person whomsoever, any legal, equitable or other rights against the
Employer, or against its officers, directors, agents or stockholders, or as
giving to any Employee or Beneficiary any equitable or other interest in the
assets, business or shares of Employer stock or giving any Employee the right to
be retained in the employment of the Employer. Neither this Plan or any action
taken hereunder shall be construed as giving to any Employee the right to be
retained in the employ of the Employer or as affecting the right of the Employer
to dismiss any Employee. Any benefit paid or payable under the Plan shall not be
deemed salary or other compensation for the purpose of computing benefits under
any employee benefit plan or other arrangement of the Employer for the benefit
of its Employees, but deferrals under the Plan shall be deemed salary or other
compensation for the purpose of computing benefits under other employee benefit
plans or other arrangements of the Employer for the benefit of its Employees to
the extent provided under the terms of such other plans or arrangements.
Effective April 1, 1998, nothing in the Plan or in any instrument executed
pursuant thereto shall confer upon any Non-Employee Director any right to
continue in the service of the Employer in any capacity or shall affect any
right of the Employer, its Board of Directors or stockholders to remove any
Non-Employee Director pursuant to the Employer's By-Laws and the provisions of
the Delaware General Corporation Law.

        9.2 ASSIGNMENT OR TRANSFER. No right, title or interest of any kind in
the Plan shall be transferable or assignable by any Employee or Beneficiary or
be subject to alienation, anticipation, encumbrance, garnishment, attachment,
execution or levy of any kind, whether voluntary or involuntary, or be subject
to the debts, contracts, liabilities, engagements, or torts of the Employee or
Beneficiary. Any attempt to alienate, anticipate, encumber, sell, transfer,
assign, pledge, garnish, attach or otherwise subject to legal or equitable
process or encumber or dispose of any interest in the Plan shall be void.

                                       15
<PAGE>

        9.3 SEVERABILITY. If any provision of this Plan shall be declared
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining provisions of this Plan but shall be fully severable, and
this Plan shall be construed and enforced as if said illegal or invalid
provision had never been inserted herein.

        9.4 CONSTRUCTION. The article and section headings and numbers are
included only for convenience of reference and are not be taken as limiting or
extending the meaning of any of the terms and provisions of this Plan. Whenever
appropriate, words used in the singular shall include the plural or the plural
may be read as the singular. When used herein, the masculine gender includes the
feminine gender.

        9.5 GOVERNING LAW. The validity and effect of this Plan and the rights
and obligations of all persons affected hereby shall be construed and determined
in accordance with the laws of the State of California unless superseded by
federal law.

        9.6 PAYMENT DUE TO INCOMPETENCE. If the Committee receives evidence that
an Employee or Beneficiary entitled to receive any payment under the Plan is
physically or mentally incompetent to receive such payment, the Committee may,
in its sole and absolute discretion, direct the payment to any other person or
trust which has been legally appointed by the courts or to any other person
determined by the Employer to be a proper recipient on behalf of such person
otherwise entitled to payment, or any of them, in such manner and proportion as
the Employer may deem proper. Any such payment shall be in complete discharge of
the Employer's obligations under this Plan to the extent of such payment.

        9.7 TAXES. The Employer may withhold from any benefits payable under
this Plan, all federal, state, city or other taxes as shall be required pursuant
to any law or governmental regulation or ruling.

        9.8 ATTORNEY'S FEES. Employer shall pay the reasonable attorney's fees
incurred by any Employee in an action brought against Employer to enforce
Employee's rights under the Plan, provided that such fees shall only be payable
in the event that the Employee prevails in such action.

        9.9 PLAN BINDING ON SUCCESSORS/ASSIGNEES. This Plan shall be binding
upon and inure to the benefit of the Employer and its successor and assigns and
the Employee and the Employee's designee and estate.

                                       16
<PAGE>

        The Employer has caused its authorized officer to execute this document
this ______ day of _______ , 2001.

        CADENCE DESIGN SYSTEMS, INC.

        Signature:___________________________

        By:__________________________________

        Title:_______________________________

                                       17<PAGE>
                                                                   Exhibit 10.10

                          CADENCE DESIGN SYSTEMS, INC.

                       1993 NONSTATUTORY STOCK OPTION PLAN

                           ADOPTED SEPTEMBER 17, 1993
                              AMENDED JULY 27, 1995
                               AMENDED MAY 3, 1996
                        AMENDED AND RESTATED MAY 15, 2000
                        STOCKHOLDER APPROVAL NOT REQUIRED
                             TERMINATION DATE: NONE

1.      PURPOSES.

        (a) AMENDMENT AND RESTATEMENT. The Plan initially was established as the
1993 Non-Statutory Stock Option Plan, effective as of September 17, 1993 (the
"Initial Plan"). The Initial Plan hereby is amended and restated in its
entirety, effective upon adoption.

        (b) SPECIFIC PURPOSE. The purpose of the Plan is to provide a means by
which eligible recipients of Options may be given an opportunity to benefit from
increases in value of the Common Stock through the granting of Options.

        (c) GENERAL PURPOSE. The Company, by means of the Plan, seeks to retain
the services of the group of persons eligible to receive Options, to secure and
retain the services of new members of this group and to provide incentives for
such persons to exert maximum efforts for the success of the Company and its
Affiliates.

2.      DEFINITIONS.

        (a) "AFFILIATE" means any parent corporation or subsidiary corporation
of the Company, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f), respectively, of the Code.

        (b) "BOARD" means the Board of Directors of the Company.

        (c) "CODE" means the Internal Revenue Code of 1986, as amended.

        (d) "COMMITTEE" means a committee of one or more members of the Board
appointed by the Board in accordance with subsection 3(c).

        (e) "COMMON STOCK" means the common stock of the Company.

        (f) "COMPANY" means Cadence Design Systems, Inc., a Delaware
corporation.

        (g) "CONSULTANT" means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting or advisory services and who is
compensated for such

                                       1
<PAGE>

services. However, the term "Consultant" shall not include Directors or members
of the Board of Directors of an Affiliate.

        (h) "CONTINUOUS SERVICE" means that the Optionholder's service with the
Company or an Affiliate is not interrupted or terminated. The Optionholder's
Continuous Service shall not be deemed to have terminated merely because of a
change in the capacity in which the Optionholder renders service to the Company
or an Affiliate, provided that there is no interruption or termination of the
Optionholder's Continuous Service. For example, a change in status from an
Employee of the Company to a Consultant of the Company will not constitute an
interruption of Continuous Service. The Board or the chief executive officer of
the Company, in that party's sole discretion, may determine whether Continuous
Service shall be considered interrupted in the case of (i) any leave of absence
approved by that party, including sick leave, military leave or any other
personal leave or (ii) transfers between the Company, Affiliates or their
successors.

        (i) "DIRECTOR" means a member of the Board of Directors of the Company.

        (j) "EMPLOYEE" means any person employed by the Company or an Affiliate.

        (k) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

        (l) "FAIR MARKET VALUE" means, as of any date, the average of the high
and low prices of the Common Stock, as reported on the New York Stock Exchange.
In the absence of such market for the Common Stock, the Fair Market Value shall
be determined in good faith by the Board.

        (m) "OPTION" means a nonstatutory stock option granted pursuant to the
Plan not intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code and the regulations promulgated thereunder.

        (n) "OPTION AGREEMENT" means a written agreement between the Company and
an Optionholder evidencing the terms and conditions of an individual Option
grant. Each Option Agreement shall be subject to the terms and conditions of the
Plan.

        (o) "OPTIONHOLDER" means a person to whom an Option is granted pursuant
to the Plan or, if applicable, such other person who holds an outstanding
Option.

        (p) "PLAN" means this Cadence Design Systems, Inc. 1993 Nonstatutory
Stock Option Plan.

        (q) "SECURITIES ACT" means the Securities Act of 1933, as amended.

3.      ADMINISTRATION.

        (a) ADMINISTRATION BY BOARD. The Board shall administer the Plan unless
and until the Board delegates administration to a Committee, as provided in
subsection 3(c).

                                       2
<PAGE>

        (b) POWERS OF BOARD. The Board shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:

               (i) To determine from time to time which of the persons eligible
under the Plan shall be granted Options; when and how each Option shall be
granted; what type or combination of types of Option shall be granted; the
provisions of each Option granted (which need not be identical), including the
time or times when a person shall be permitted to receive Common Stock pursuant
to an Option; and the number of shares of Common Stock with respect to which an
Option shall be granted to each such person.

               (ii) To construe and interpret the Plan and Options granted under
it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Option Agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.

               (iii)  To amend the Plan or an Option as provided in Section 11.

               (iv) Generally, to exercise such powers and to perform such acts
as the Board deems necessary or expedient to promote the best interests of the
Company that are not in conflict with the provisions of the Plan.

        (c) DELEGATION TO COMMITTEE.

               (i) GENERAL. The Board may delegate administration of the Plan to
a Committee or Committees of one (1) or more members of the Board, and the term
"Committee" shall apply to any person or persons to whom such authority has been
delegated. If administration is delegated to a Committee, the Committee shall
have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board, including the power to delegate to a subcommittee any of
the administrative powers the Committee is authorized to exercise (and
references in this Plan to the Board shall thereafter be to the Committee or
subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.

        (d) EFFECT OF BOARD'S DECISION. All determinations, interpretations and
constructions made by the Board in good faith shall not be subject to review by
any person and shall be final, binding and conclusive on all persons.

4.      SHARES SUBJECT TO THE PLAN.

        (a) SHARE RESERVE. Subject to the provisions of Section 10 relating to
adjustments upon changes in Common Stock, the Common Stock that may be issued
pursuant to Options shall not exceed in the aggregate Twenty-Four Million Seven
Hundred Fifty Thousand (24,750,000) shares of Common Stock.

                                       3
<PAGE>

        (b) REVERSION OF SHARES TO THE SHARE RESERVE. If any Option shall for
any reason expire or otherwise terminate, in whole or in part, without having
been exercised in full, the shares of Common Stock not acquired under such
Option shall revert to and again become available for issuance under the Plan.
If the Company repurchases any unvested shares of Common Stock acquired pursuant
to an Award, such repurchased shares of Common Stock shall revert to and again
become available for issuance under the Plan.

        (c) SOURCE OF SHARES. The shares of Common Stock subject to the Plan may
be unissued shares or reacquired shares, bought on the market or otherwise.

5.      ELIGIBILITY.

        (a) ELIGIBILITY FOR OPTIONS. The Board may grant Options only to
Employees or Consultants as defined in Section 2 hereof. The Board may grant an
additional Option or Options to an Employee or a Consultant who has been granted
an Option if he or she is otherwise eligible. Notwithstanding the foregoing, the
Board may not grant an Option to an Employee or Consultant who is an executive
officer of the Company within the meaning of Section 16 of the Exchange Act, who
is a Director or who beneficially owns ten percent (10%) or more of the
Company's Common Stock unless the Option will be granted to a person not
previously employed by the Company as a material inducement to such person's
entering into an employment contract with the Company.

        (b) CONSULTANTS.

               (i) A Consultant shall not be eligible for the grant of an Option
if, at the time of grant, a Form S-8 Registration Statement under the Securities
Act ("Form S-8") is not available to register either the offer or the sale of
the Company's securities to such Consultant because of the nature of the
services that the Consultant is providing to the Company, or because the
Consultant is not a natural person, or as otherwise provided by the rules
governing the use of Form S-8, unless the Company determines both (i) that such
grant (A) shall be registered in another manner under the Securities Act (e.g.,
on a Form S-3 Registration Statement) or (B) does not require registration under
the Securities Act in order to comply with the requirements of the Securities
Act, if applicable, and (ii) that such grant complies with the securities laws
of all other relevant jurisdictions.

               (ii) Form S-8 generally is available to consultants and advisors
only if (i) they are natural persons; (ii) they provide bona fide services to
the issuer, its parents, its majority-owned subsidiaries or majority-owned
subsidiaries of the issuer's parent; and (iii) the services are not in
connection with the offer or sale of securities in a capital-raising
transaction, and do not directly or indirectly promote or maintain a market for
the issuer's securities.

6.      OPTION PROVISIONS.

        Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:

                                       4
<PAGE>

        (a) TERM. The Board shall determine the term of each Option.

        (b) EXERCISE PRICE. The exercise price of each Option shall be not less
than one hundred percent (100%) of the Fair Market Value of the Common Stock
subject to the Option on the date the Option is granted. Notwithstanding the
foregoing, an Option may be granted with an exercise price lower than that set
forth in the preceding sentence if such Option is granted pursuant to an
assumption or substitution for another option in a manner satisfying the
provisions of Section 424(a) of the Code.

        (c) CONSIDERATION. The purchase price of Common Stock acquired pursuant
to an Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the Option is exercised or (ii) at
the discretion of the Board at the time of the grant of the Option or
subsequently (1) by delivery to the Company of other Common Stock, (2) according
to a deferred payment or other similar arrangement with the Optionholder or (3)
in any other form of legal consideration that may be acceptable to the Board.
Unless otherwise specifically provided in the Option, the purchase price of
Common Stock acquired pursuant to an Option that is paid by delivery to the
Company of other Common Stock acquired, directly or indirectly from the Company,
shall be paid only by shares of the Common Stock of the Company that have been
held for more than six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes). At
any time that the Company is incorporated in Delaware, payment of the Common
Stock's "par value," as defined in the Delaware General Corporation Law, shall
not be made by deferred payment. In making its determination as to the type of
consideration to accept, the Board shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company.

        In the case of any deferred payment arrangement, interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.

        (d) TRANSFERABILITY. An Option shall be transferable to the extent
provided in the Option Agreement. If the Option does not provide for
transferability, then the Option shall not be transferable except by will or by
the laws of descent and distribution and shall be exercisable during the
lifetime of the Optionholder only by the Optionholder. Notwithstanding the
foregoing, the Optionholder may, by delivering written notice to the Company, in
a form satisfactory to the Company, designate a third party who, in the event of
the death of the Optionholder, shall thereafter be entitled to exercise the
Option.

        (e) VESTING GENERALLY. The total number of shares of Common Stock
subject to an Option may, but need not, vest and therefore become exercisable in
periodic installments that may, but need not, be equal. The Option may be
subject to such other terms and conditions on the time or times when it may be
exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The
provisions of this subsection 6(e) are subject to any Option provisions
governing the minimum number of shares of Common Stock as to which an Option may
be exercised.

                                       5
<PAGE>

        (f) TERMINATION OF CONTINUOUS SERVICE. In the event an Optionholder's
Continuous Service terminates (other than upon the Optionholder's death or
disability), the Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise such Option as of the date of
termination) but only within such period of time ending on the earlier of (i)
the date three (3) months following the termination of the Optionholder's
Continuous Service (or such longer or shorter period specified in the Option
Agreement), or (ii) the expiration of the term of the Option as set forth in the
Option Agreement. If, after termination, the Optionholder does not exercise his
or her Option within the time specified in the Option Agreement, the Option
shall terminate.

        (g) EXTENSION OF TERMINATION DATE. An Optionholder's Option Agreement
may also provide that if the exercise of the Option following the termination of
the Optionholder's Continuous Service (other than upon the Optionholder's death
or disability) would be prohibited at any time solely because the issuance of
shares of Common Stock would violate the registration requirements under the
Securities Act, then the Option shall terminate on the expiration of a period of
three (3) months after the termination of the Optionholder's Continuous Service
during which the exercise of the Option would not be in violation of such
registration requirements.

        (h) DISABILITY OF OPTIONHOLDER. In the event that an Optionholder's
Continuous Service terminates as a result of the Optionholder's disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination), but only
within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in
the Option Agreement) or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, after termination, the Optionholder does not
exercise his or her Option within the time specified herein, the Option shall
terminate.

        (i) DEATH OF OPTIONHOLDER. In the event (i) an Optionholder's Continuous
Service terminates as a result of the Optionholder's death or (ii) the
Optionholder dies within the period (if any) specified in the Option Agreement
after the termination of the Optionholder's Continuous Service for a reason
other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by
the Optionholder's estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
Option upon the Optionholder's death, but only within the period ending on the
earlier of (1) the date twelve (12) months following the date of death (or such
longer or shorter period specified in the Option Agreement) or (2) the
expiration of the term of such Option as set forth in the Option Agreement. If,
after death, the Option is not exercised within the time specified herein, the
Option shall terminate.

        (j) EARLY EXERCISE. The Option may, but need not, include a provision
whereby the Optionholder may elect at any time before the Optionholder's
Continuous Service terminates to exercise the Option as to any part or all of
the shares of Common Stock subject to the Option prior to the full vesting of
the Option. Any unvested shares of Common Stock so purchased may be subject to a
repurchase option in favor of the Company or to any other restriction the Board
determines to be appropriate.

                                       6
<PAGE>

        (k) RE-LOAD OPTIONS.

               (i) Without in any way limiting the authority of the Board to
make or not to make grants of Options hereunder, the Board shall have the
authority (but not an obligation) to include as part of any Option Agreement a
provision entitling the Optionholder to a further Option (a "Re-Load Option") in
the event the Optionholder exercises the Option evidenced by the Option
Agreement, in whole or in part, by surrendering other shares of Common Stock in
accordance with this Plan and the terms and conditions of the Option Agreement.
Unless otherwise specifically provided in the Option, the Optionholder shall not
surrender shares of Common Stock acquired, directly or indirectly from the
Company, unless such shares have been held for more than six (6) months (or such
longer or shorter period of time required to avoid a charge to earnings for
financial accounting purposes).

               (ii) Any such Re-Load Option shall (1) provide for a number of
shares of Common Stock equal to the number of shares of Common Stock surrendered
as part or all of the exercise price of such Option; (2) have an expiration date
which is the same as the expiration date of the Option the exercise of which
gave rise to such Re-Load Option; and (3) have an exercise price which is equal
to one hundred percent (100%) of the Fair Market Value of the Common Stock
subject to the Re-Load Option on the date of exercise of the original Option.
Notwithstanding the foregoing, a Re-Load Option shall be subject to the same
exercise price and term provisions heretofore described for Options under the
Plan.

               (iii) There shall be no Re-Load Options on a Re-Load Option. Any
such Re-Load Option shall be subject to the availability of sufficient shares of
Common Stock under subsection 4(a) and shall be subject to such other terms and
conditions as the Board may determine which are not inconsistent with the
express provisions of the Plan regarding the terms of Options.

7.      COVENANTS OF THE COMPANY.

        (a) AVAILABILITY OF SHARES. During the terms of the Options, the Company
shall keep available at all times the number of shares of Common Stock required
to satisfy such Options.

        (b) SECURITIES LAW COMPLIANCE. The Company shall seek to obtain from
each regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to grant Options and to issue and sell shares of
Common Stock upon exercise of the Options; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Option or any Common Stock issued or issuable pursuant to any such
Option. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of Common Stock under the Plan,
the Company shall be relieved from any liability for failure to issue and sell
Common Stock upon exercise of such Options unless and until such authority is
obtained.

                                       7
<PAGE>

8.      USE OF PROCEEDS FROM STOCK.

        Proceeds from the sale of Common Stock pursuant to Options shall
constitute general funds of the Company.

9.      MISCELLANEOUS.

        (a) ACCELERATION OF EXERCISABILITY AND VESTING. The Board shall have the
power to accelerate the time at which an Option may first be exercised or the
time during which an Option or any part thereof will vest in accordance with the
Plan, notwithstanding the provisions in the Option stating the time at which it
may first be exercised or the time during which it will vest.

        (b) STOCKHOLDER RIGHTS. No Optionholder shall be deemed to be the holder
of, or to have any of the rights of a holder with respect to, any shares of
Common Stock subject to such Option unless and until such Optionholder has
satisfied all requirements for exercise of the Option pursuant to its terms.

        (c) NO EMPLOYMENT OR OTHER SERVICE RIGHTS. Nothing in the Plan or any
instrument executed or Option granted pursuant thereto shall confer upon any
Optionholder any right to continue to serve the Company or an Affiliate in the
capacity in effect at the time the Option was granted or shall affect the right
of the Company or an Affiliate to terminate (i) the employment of an Employee
with or without notice and with or without cause, or (ii) the service of a
Consultant pursuant to the terms of such Consultant's agreement with the Company
or an Affiliate.

        (d) INVESTMENT ASSURANCES. The Company may require an Optionholder, as a
condition of exercising or acquiring Common Stock under any Option, (i) to give
written assurances satisfactory to the Company as to the Optionholder's
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Option; and (ii) to give
written assurances satisfactory to the Company stating that the Optionholder is
acquiring Common Stock subject to the Option for the Optionholder's own account
and not with any present intention of selling or otherwise distributing the
Common Stock. The foregoing requirements, and any assurances given pursuant to
such requirements, shall be inoperative if (1) the issuance of the shares of
Common Stock upon the exercise or acquisition of Common Stock under the Option
has been registered under a then currently effective registration statement
under the Securities Act or (2) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws. The
Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the Common Stock.

        (e) WITHHOLDING OBLIGATIONS. To the extent provided by the terms of an
Option Agreement, the Optionholder may satisfy any federal, state or local tax
withholding obligation

                                       8
<PAGE>

relating to the exercise or acquisition of Common Stock under an Option by any
of the following means (in addition to the Company's right to withhold from any
compensation paid to the Optionholder by the Company) or by a combination of
such means: (i) tendering a cash payment; (ii) authorizing the Company to
withhold shares of Common Stock from the shares of Common Stock otherwise
issuable to the Optionholder as a result of the exercise or acquisition of
Common Stock under the Option, provided, however, that no shares of Common Stock
are withheld with a value exceeding the minimum amount of tax required to be
withheld by law; or (iii) delivering to the Company owned and unencumbered
shares of Common Stock.

10.     ADJUSTMENTS UPON CHANGES IN STOCK.

        (a) CAPITALIZATION ADJUSTMENTS. If any change is made in the Common
Stock subject to the Plan, or subject to any Option, without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan will be appropriately
adjusted in the class(es) and maximum number of securities subject to the Plan
pursuant to subsection 4(a), and outstanding Options will be appropriately
adjusted in the class(es) and number of securities and price per share of Common
Stock subject to such outstanding Options. The Board shall make such
adjustments, and its determination shall be final, binding and conclusive. (The
conversion of any convertible securities of the Company shall not be treated as
a transaction "without receipt of consideration" by the Company.)

        (b) CHANGE IN CONTROL.

               (i) A "Change in Control" shall be deemed to occur upon the
consummation of any one of the following events: (a) a sale of all or
substantially all of the assets of the Company; (b) a merger or consolidation in
which the Company is not the surviving corporation (other than a transaction the
principal purpose of which is to change the state of the Company's incorporation
or a transaction in which the voting securities of the Company are exchanged for
beneficial ownership of at least fifty percent (50%) of the voting securities of
the controlling acquiring corporation); (c) a merger or consolidation in which
the Company is the surviving corporation and less than fifty percent (50%) of
the voting securities of the Company that are outstanding immediately after the
consummation of such transaction are beneficially owned, directly or indirectly,
by the persons who owned such voting securities immediately prior to such
transaction; (d) any transaction or series of related transactions after which
any person (as such term is used in Section 13(d)(3) of the Exchange Act), other
than any employee benefit plan (or related trust) sponsored or maintained by the
Company or any Affiliate, becomes the beneficial owner of voting securities of
the Company representing forty percent (40%) or more of the combined voting
power of all of the voting securities of the Company; (e) during any period of
two consecutive years, individuals who at the beginning of such period
constitute the membership of the Company's Board of Directors ("Incumbent
Directors") cease for any reason to have authority to cast at least a majority
of the votes which all Directors are entitled to cast, unless the election, or
the nomination for election by the Company's stockholders, of a new Director was
approved by a vote of at least two-thirds of the votes entitled to be cast by
the

                                       9
<PAGE>

Incumbent Directors, in which case such director shall also be treated as an
Incumbent Director in the future; or (f) the liquidation or dissolution of the
Company.

               (ii) In the event of a Change in Control, then: (a) any surviving
or acquiring corporation shall assume Options outstanding under the Plan or
shall substitute similar Options (including an option to acquire the same
consideration paid to stockholders in the transaction described in this
subsection 10(b) for those outstanding under the Plan), or (b) in the event any
surviving or acquiring corporation refuses to assume such Options or to
substitute similar Options for those outstanding under the Plan, (i) with
respect to Options held by persons whose Continuous Service has not terminated,
the vesting both of such Options and of any shares of Common Stock acquired
pursuant to an Option as well as the time during which such Options may be
exercised shall be accelerated prior to such event and the Options terminated if
not exercised after such acceleration and at or prior to such event, and (ii)
with respect to any other Options outstanding under the Plan, if there is a
successor corporation, such Options shall be terminated if not exercised prior
to such event.

11.     AMENDMENT OF THE PLAN AND OPTIONS.

        (a) AMENDMENT OF PLAN. The Board at any time, and from time to time, may
amend the Plan.

        (b) NO IMPAIRMENT OF RIGHTS. Rights under any Option granted before
amendment of the Plan shall not be impaired by any amendment of the Plan unless
(i) the Company requests the consent of the Optionholder and (ii) the
Optionholder consents in writing.

        (c) AMENDMENT OF OPTIONS. The Board at any time, and from time to time,
may amend the terms of any one or more Options; provided, however, that the
rights under any Option shall not be impaired by any such amendment unless (i)
the Company requests the consent of the Optionholder and (ii) the Optionholder
consents in writing.

12.     TERMINATION OR SUSPENSION OF THE PLAN.

        (a) PLAN TERM. The Board may suspend or terminate the Plan at any time.

        (b) NO IMPAIRMENT OF RIGHTS. Suspension or termination of the Plan shall
not impair rights and obligations under any Option granted while the Plan is in
effect except with the written consent of the Optionholder.

13.     EFFECTIVE DATE OF PLAN.

        The Plan shall become effective upon adoption.

14.     CHOICE OF LAW.

        The law of the State of Delaware shall govern all questions concerning
the construction, validity and interpretation of this Plan, without regard to
such state's conflict of laws rules.

                                       10

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