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                                                                    EXHIBIT 10.2

                               ALTERA CORPORATION

                        1987 EMPLOYEE STOCK PURCHASE PLAN

                      (as amended and restated April, 2002)

        The following constitute the provisions of the 1987 Employee Stock
Purchase Plan, as amended and restated April, 2002, of Altera Corporation.

        1. Purpose. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code. The provisions of the Plan,
accordingly, shall be construed so as to extend and limit participation in a
uniform and nondiscriminatory basis consistent with the requirements of Section
423.

        2. Definitions.

               (a) "Administrator" shall mean the Board or any Committee
designated by the Board to administer the plan pursuant to Section 15 of the
Plan.

               (b) "Board" shall mean the Board of Directors of the Company.

               (c) "Change of Control" shall mean the occurrence of any of the
following events:

                        (i) Any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in
Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the total voting power
represented by the Company's then outstanding voting securities; or

                        (ii) The consummation of the sale or disposition by the
Company of all or substantially all of the Company's assets; or

                        (iii) The consummation of a merger or consolidation of
the Company, with any other corporation, other than a merger or consolidation
that would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity
or its parent) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company, or such surviving entity or
its parent outstanding immediately after such merger or consolidation.

                        (iv) A change in the composition of the Board, as a
result of which fewer than a majority of the Directors are Incumbent Directors.
"Incumbent Directors" shall

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mean Directors who either (A) are Directors of the Company, as applicable, as of
the date hereof, or (B) are elected, or nominated for election, to the Board
with the affirmative votes of at least a majority of those Directors whose
election or nomination was not in connection with any transaction described in
subsections (i), (ii) or (iii) or in connection with an actual or threatened
proxy contest relating to the election of directors of the Company.

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

               (e) "Committee" means a committee of the Board appointed by the
Board in accordance with Section 15 hereof.

               (f) "Common Stock" shall mean the common stock of the Company.

               (g) "Company" shall mean Altera Corporation, a Delaware
corporation.

               (h) "Compensation" shall mean all base straight time gross
earnings, sales commissions and sales incentives, but exclusive of payments for
overtime, shift premiums, other incentive payments, bonuses or other
compensation.

               (i) "Designated Subsidiary" shall mean any Subsidiary selected by
the Administrator as eligible to participate in the Plan.

               (j) "Eligible Employee" shall mean any individual who is a common
law employee of the Company or any Designated Subsidiary and whose customary
employment with the Company or Designated Subsidiary is at least twenty (20)
hours per week and more than five (5) months in any calendar year. For purposes
of the Plan, the employment relationship shall be treated as continuing intact
while the individual is on sick leave or other leave of absence approved by the
Company. Where the period of leave exceeds 90 days and the individual's right to
reemployment is not guaranteed either by statute or by contract, the individual
shall be deemed to have withdrawn from the Plan on the 91st day of such leave.

               (k) "Exercise Date" shall mean the Trading Day on or before April
30th and October 31st of each year.

               (l) "Fair Market Value" shall mean, as of any date, the value of
Common Stock determined as follows:

                        (i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system on
the date of determination, as reported in The Wall Street Journal or such other
source as the Board deems reliable;

                        (ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean of the closing

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bid and asked prices for the Common Stock on the date of determination, as
reported in The Wall Street Journal or such other source as the Board deems
reliable;

                        (iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Board; or

                        (iv) For purposes of the Offering Date of the first
Offering Period under the Plan, the Fair Market Value shall be the initial price
to the public as set forth in the final prospectus included within the
registration statement in Form S-1 filed with the Securities and Exchange
Commission for the initial public offering of the Company's Common Stock (the
"Registration Statement").

               (m) "Offering Date" shall mean the first Trading Day of each
Offering Period.

               (n) "Offering Periods" shall mean the periods of approximately
twelve (12) months during which an option granted pursuant to the Plan may be
exercised, usually commencing on the first Trading Day on or after May 1st and
November 1st of each year and terminating on the Trading Day on or before April
30th and October 31st. The duration and timing of Offering Periods may be
changed pursuant to Section 4 of this Plan.

               (o) "Plan" shall mean this Employee Stock Purchase Plan.

               (p) "Purchase Period" shall mean the approximately six (6) month
period commencing on one Exercise Date and ending with the next Exercise Date,
except that the first Purchase Period of any Offering Period shall commence on
the Offering Date and end with the next Exercise Date.

               (q) "Purchase Price" shall mean 85% of the Fair Market Value of a
share of Common Stock on the Offering Date or on the Exercise Date, whichever is
lower; provided however, that the Purchase Price may be adjusted by the
Administrator pursuant to Section 20.

               (r) "Subsidiary" shall mean a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 424(f) of the Code.

               (s) "Trading Day" shall mean a day on which national stock
exchanges and the Nasdaq System are open for trading.

        3. Eligibility.

               (a) Subsequent Offering Periods. Any Eligible Employee on a given
Offering Date shall be eligible to participate in the Plan.

               (b) Limitations. Any provisions of the Plan to the contrary
notwithstanding, no Eligible Employee shall be granted an option under the Plan
(i) to the extent that, immediately after the grant, such Eligible Employee (or
any other person whose stock would be attributed to such Eligible Employee
pursuant to Section 424(d) of the Code) would own capital stock of the Company
and/or hold outstanding options to purchase such stock possessing five percent
(5%) or

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more of the total combined voting power or value of all classes of the capital
stock of the Company or of any Subsidiary, or (ii) to the extent that his or her
rights to purchase stock under all employee stock purchase plans of the Company
and its subsidiaries accrues at a rate that exceeds Twenty-Five Thousand Dollars
($25,000) worth of stock (determined at the Fair Market Value of the shares at
the time such option is granted) for each calendar year in which such option is
outstanding at any time.

        4. Offering Periods. The Plan shall be implemented by consecutive,
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after May 1st and November 1st each year, or on such other
date as the Board shall determine, and continuing thereafter until terminated in
accordance with Section 21 hereof. The Board shall have the power to change the
duration of Offering Periods (including the commencement dates thereof) with
respect to future offerings without shareholder approval if such change is
announced prior to the scheduled beginning of the first Offering Period to be
affected thereafter.

        5. Subsequent Offering Periods. An Eligible Employee may become a
participant in the Plan by completing a subscription agreement authorizing
payroll deductions in the form of Exhibit A to this Plan and filing it with the
Company's Stock Administration Department prior to the applicable Offering Date.

        6. Payroll Deductions.

               (a) At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not exceeding 10% of the Compensation
that he or she receives on each pay day during the Offering Period; provided,
however, that should a pay day occur on an Exercise Date, a participant shall
have the payroll deductions made on such day applied to his or her account under
the new Offering Period or Purchase Period, as the case may be. A participant's
subscription agreement shall remain in effect for successive Offering Periods
unless terminated as provided in Section 11 hereof.

               (b) Payroll deductions for a participant shall commence on the
first payday following the Offering Date and shall end on the last payday in the
Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 11 hereof.

               (c) All payroll deductions made for a participant shall be
credited to his or her account under the Plan and shall be withheld in whole
percentages only. A participant may not make any additional payments into such
account.

               (d) A participant may discontinue his or her participation in the
Plan as provided in Section 11 hereof, or decrease the rate of his or her
payroll deductions during the Offering Period by completing or filing with the
Company a new subscription agreement authorizing a change in payroll deduction
rate. A participant may increase his or her rate of payroll deductions only for
a subsequent Offering Period in which he or she is scheduled to participate and
may not increase his or her rate of payroll deductions during an outstanding
Offering Period in which

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such participant is currently participating. The Administrator may, in its
discretion, limit the nature and/or number of participation rate changes during
any Offering Period. Any decrease in rate shall be effective fifteen (15) days
following the Company's receipt of the notification.

               (e) Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) hereof, the
Administrator may decrease a participant's payroll deductions to zero percent
(0%) at any time during a Purchase Period. Payroll deductions shall recommence
at the rate provided in such participant's subscription agreement at the
beginning of the first Purchase Period that is scheduled to end in the following
calendar year, unless terminated by the participant as provided in Section 11
hereof.

               (f) At the time the option is exercised, in whole or in part, or
at the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any time,
the Company may, but shall not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Eligible Employee.

        7. Grant of Option. On the Offering Date of each Offering Period, each
Eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Eligible Employee's payroll deductions
accumulated prior to such Exercise Date and retained in the Participant's
account as of the Exercise Date by the applicable Purchase Price; provided that
in no event shall an Eligible Employee be permitted to purchase during each
Purchase Period more than 10,000 shares of the Company's Common Stock (subject
to any adjustment pursuant to Section 20 hereof), and provided further that such
purchase shall be subject to the limitations set forth in Section 3(b) and other
sections of the Plan that may limit such number. The Eligible Employee may
accept the grant of such option by turning in a completed Subscription Agreement
to the Company on or prior to an Offering Date. The Administrator may, for
future Offering Periods, increase or decrease, in its absolute discretion, the
maximum number of shares of the Company's Common Stock an Eligible Employee may
purchase during each Purchase Period of such Offering Period. Exercise of the
option shall occur as provided in Section 9 hereof, unless the participant has
withdrawn pursuant to Section 11 hereof. The option shall expire on the last day
of the Offering Period.

        8. Automatic Transfer to Low Price Offering Period. To the extent
permitted by any applicable laws, regulations, or stock exchange rules, if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering Period
is lower than the Fair Market Value of the Common Stock on the Offering Date of
such Offering Period, then all participants in such Offering Period shall be
automatically withdrawn from such Offering Period immediately after the exercise
of their option on such Exercise Date and automatically re-enrolled in the
immediately following Offering Period.

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        9. Exercise of Option.

               (a) Unless a participant withdraws from the Plan as provided in
Section 11 hereof, his or her option for the purchase of shares shall be
exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares shall be purchased; any payroll deductions
accumulated in a participant's account that are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Purchase Period or Offering Period, subject to earlier withdrawal by the
participant as provided in Section 11 hereof. Any other funds left over in a
participant's account after the Exercise Date shall be returned to the
participant. During a participant's lifetime, a participant's option to purchase
shares hereunder is exercisable only by him or her.

               (b) If the Administrator determines that, on a given Exercise
Date, the number of shares with respect to which options are to be exercised may
exceed (i) the number of shares of Common Stock that were available for sale
under the Plan on the Offering Date of the applicable Offering Period, or (ii)
the number of shares available for sale under the Plan on such Exercise Date,
the Administrator may in its sole discretion (1) provide that the Company shall
make a pro rata allocation of the shares of Common Stock available for purchase
on such Offering Date or Exercise Date, as applicable, in as uniform a manner as
shall be practicable and as it shall determine in its sole discretion to be
equitable among all participants exercising options to purchase Common Stock on
such Exercise Date, and continue all Offering Periods then in effect, or (2)
provide that the Company shall make a pro rata allocation of the shares
available for purchase on such Offering Date or Exercise Date, as applicable, in
as uniform a manner as shall be practicable and as it shall determine in its
sole discretion to be equitable among all participants exercising options to
purchase Common Stock on such Exercise Date, and terminate any or all Offering
Periods then in effect pursuant to Section 21 hereof. The Company may make pro
rata allocation of the shares available on the Offering Date of any applicable
Offering Period pursuant to the preceding sentence, notwithstanding any
authorization of additional shares for issuance under the Plan by the Company's
shareholders subsequent to such Offering Date.

        10. Delivery. As soon as reasonably practicable after each Exercise Date
on which a purchase of shares occurs, the Company shall arrange the delivery to
each participant the shares purchased upon exercise of his or her option in a
form determined by the Administrator.

        11. Withdrawal.

               (a) A participant may withdraw all but not less than all the
payroll deductions credited to his or her account and not yet used to exercise
his or her option under the Plan at any time by giving written notice to the
Company. All of the participant's payroll deductions credited to his or her
account shall be paid to such participant promptly after receipt of notice of
withdrawal and such participant's option for the Offering Period shall be
automatically terminated, and no further payroll deductions for the purchase of
shares shall be made for such Offering Period. If a participant withdraws from
an Offering Period, payroll deductions shall not

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resume at the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new Subscription Agreement.

               (b) A participant's withdrawal from an Offering Period shall not
have any effect upon his or her eligibility to participate in any similar plan
that may hereafter be adopted by the Company or in succeeding Offering Periods
that commence after the termination of the Offering Period from which the
participant withdraws.

        12. Termination of Employment. In the event a participant ceases to be
an Eligible Employee prior to the Exercise Date of the Offering Period in
question for any reason, including retirement or death, the payroll deductions
credited to the participant's account will be returned to the participant, or in
the case of the participant's death, to the person or persons entitled thereto
pursuant to Section 16 of the Plan, and the participant's option will
automatically terminate.

        13. Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.

        14. Stock.

               (a) Subject to adjustment upon changes in capitalization of the
Company as provided in Section 20 hereof, the maximum number of shares of the
Company's Common Stock that shall be made available for sale under the Plan
shall be 15,700,000.

               (b) Until the shares are issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company), a participant shall only have the rights of an unsecured creditor with
respect to such shares, and no right to vote or receive dividends or any other
rights as a stockholder shall exist with respect to such shares.

               (c) Shares to be delivered to a participant under the Plan shall
be registered in the name of the participant or in the name of the participant
and his or her spouse.

        15. Administration. The Administrator shall administer the Plan and
shall have full and exclusive discretionary authority to construe, interpret and
apply the terms of the Plan, to determine eligibility and to adjudicate all
disputed claims filed under the Plan. Every finding, decision and determination
made by the Administrator shall, to the full extent permitted by law, be final
and binding upon all parties.

        16. Designation of Beneficiary.

               (a) Unless otherwise prohibited by applicable law, a participant
may file a written designation of a beneficiary who is to receive any shares and
cash, if any, from the participant's account under the Plan in the event of such
participant's death subsequent to an Exercise Date on which the option is
exercised but prior to delivery to such participant of such shares and cash. In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant's account under the Plan in the event
of such participant's death prior to

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exercise of the option. If a participant is married and the designated
beneficiary is not the spouse, spousal consent shall be required for such
designation to be effective.

               (b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.

               (c) All beneficiary designations shall be in such form and manner
as the Administrator may designate from time to time.

        17. Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution, or as provided in Section 16 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 11 hereof.

        18. Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions. Until
shares are issued, participants shall only have the rights of an unsecured
creditor.

        19. Reports. Individual accounts shall be maintained for each
participant in the Plan. Statements of account shall be given to participating
Eligible Employees at least annually, which statements shall set forth the
amounts of payroll deductions, the Purchase Price, the number of shares
purchased and the remaining cash balance, if any.

        20. Adjustments Upon Changes in Capitalization, Dissolution,
Liquidation, Merger or Change of Control.

               (a) Changes in Capitalization. Subject to any required action by
the shareholders of the Company, the maximum number of shares of the Company's
Common Stock that shall be made available for sale under the Plan, the maximum
number of shares each participant may purchase each Purchase Period (pursuant to
Section 7), as well as the price per share and the number of shares of Common
Stock covered by each option under the Plan that have not yet been exercised,
shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock, or any
other change in the number of shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to

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have been "effected without receipt of consideration." Such adjustment shall be
made by the Administrator, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an option.

               (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise Date"), and
shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Administrator. The
New Exercise Date shall be before the date of the Company's proposed dissolution
or liquidation. The Administrator shall notify each participant in writing, at
least ten (10) business days prior to the New Exercise Date, that the Exercise
Date for the participant's option has been changed to the New Exercise Date and
that the participant's option shall be exercised automatically on the New
Exercise Date, unless prior to such date the participant has withdrawn from the
Offering Period as provided in Section 11 hereof.

               (c) Merger or Change of Control. In the event of a merger or
Change of Control, each outstanding option shall be assumed or an equivalent
option substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. In the event that the successor corporation refuses to
assume or substitute for the option, any Purchase Periods then in progress shall
be shortened by setting a New Exercise Date and any Offering Periods then in
progress shall end on the New Exercise Date. The New Exercise Date shall be
before the date of the Company's proposed merger or Change of Control. The
Administrator shall notify each participant in writing, at least ten (10)
business days prior to the New Exercise Date, that the Exercise Date for the
participant's option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 11 hereof.

        21. Amendment or Termination.

               (a) The Administrator may at any time and for any reason
terminate or amend the Plan. Except as otherwise provided in the Plan, no such
termination can affect options previously granted, provided that an Offering
Period may be terminated by the Administrator on any Exercise Date if the
Administrator determines that the termination of the Offering Period or the Plan
is in the best interests of the Company and its shareholders. Except as provided
in Section 20 and this Section 21 hereof, no amendment may make any change in
any option theretofore granted which adversely affects the rights of any
participant. To the extent necessary to comply with Section 423 of the Code (or
any successor rule or provision or any other applicable law, regulation or stock
exchange rule), the Company shall obtain shareholder approval in such a manner
and to such a degree as required.

               (b) Without shareholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Administrator shall be entitled to

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change the Offering Periods, limit the frequency and/or number of changes in the
amount withheld during an Offering Period, establish the exchange ratio
applicable to amounts withheld in a currency other than U.S. dollars, permit
payroll withholding in excess of the amount designated by a participant in order
to adjust for delays or mistakes in the Company's processing of properly
completed withholding elections, establish reasonable waiting and adjustment
periods and/or accounting and crediting procedures to ensure that amounts
applied toward the purchase of Common Stock for each participant properly
correspond with amounts withheld from the participant's Compensation, and
establish such other limitations or procedures as the Administrator determines
in its sole discretion advisable which are consistent with the Plan.

               (c) In the event the Administrator determines that the ongoing
operation of the Plan may result in unfavorable financial accounting
consequences, the Board may, in its discretion and to the extent necessary or
desirable, modify or amend the Plan to reduce or eliminate such accounting
consequence including, but not limited to:

                        (i) increasing the Purchase Price for any Offering
Period, including an Offering Period underway at the time of the change in
Purchase Price;

                        (ii) shortening any Offering Period so that Offering
Period ends on a new Exercise Date, including an Offering Period underway at the
time of the Board action; and

                        (iii) allocating shares. Such modifications or
amendments shall not require stockholder approval or the consent of any Plan
participants.

        22. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form and manner specified by the Company at the
location, or by the person, designated by the Company for the receipt thereof.

        23. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto comply with all applicable provisions
of law, domestic or foreign, including, without limitation, the Securities Act
of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules
and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the shares may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance.

        As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.

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        24. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company. It shall continue in effect until terminated under
Section 21 hereof.

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                               ALTERA CORPORATION
                        1987 EMPLOYEE STOCK PURCHASE PLAN
                             SUBSCRIPTION AGREEMENT

                        OFFERING DATE: ________________

___ ORIGINAL APPLICATION   ___ CHANGE IN PAYROLL DEDUCTION RATE   ___ CHANGE OF
Beneficiary(ies)

All capitalized terms not defined herein shall have the meanings ascribed to
them in the "Altera Corporation 1987 Employee Stock Purchase Plan".

1.      I, _____________________________________ , employee # ___________ hereby
        elect to participate in the Altera Corporation 1987 Employee Stock
        Purchase Plan, as amended (the "Stock Purchase Plan"), and subscribe to
        purchase shares of the Company's Common Stock, par value $0.001 per
        share, in accordance with this Subscription Agreement and the Stock
        Purchase Plan.

2.      Employee Location (please check one): Corporate ___ Domestic Field ___
        International __ For domestic field and international employees, please
        list the state or country your office is located in. Office Location
        _______________________

3.      I hereby authorize payroll deductions from each paycheck in an amount
        equal to ___________% (not to exceed 10%) of my Compensation on each
        payday during the Offering Period in accordance with the Stock Purchase
        Plan.

4.      I understand that said payroll deductions shall be accumulated for the
        purchase of shares of Common Stock, par value $0.001 per share, at the
        applicable purchase price determined in accordance with the Stock
        Purchase Plan. I further understand that, except as otherwise set forth
        in the Stock Purchase Plan, shares will be purchased for me
        automatically on the Exercise Date of the Offering Period unless I
        otherwise withdraw from the Stock Purchase Plan by giving written notice
        to the Company for such purpose.

5.      By entering into this Subscription Agreement, I acknowledge that: (a)
        the Stock Purchase Plan is discretionary in nature and may be suspended
        or terminated by the Company at any time; (b) the grant of stock
        purchase rights is voluntary and occasional and does not create any
        contractual or other right to receive future grants of purchase rights,
        or benefits in lieu of purchase rights, even if purchase rights have
        been granted repeatedly in the past; (c) all decisions with respect to
        any such future grants of purchase rights will be at the sole discretion
        of the Company; (d) my participation in the Stock Purchase Plan is
        voluntary; (e) the value of the purchase rights is an extraordinary item
        of compensation that is outside the scope of my employment contract, if
        any; (f) the purchase rights are not part of normal or expected
        compensation or salary for any purposes, including, but not limited to,
        calculating any severance, resignation, redundancy, end of service
        payments, bonuses, long-service awards, pension or retirement benefits
        or similar payments; (g) in the event of involuntary termination of my
        employment, my right to receive grants of purchase rights under the
        Stock Purchase Plan, if any, will terminate effective as of the date
        that I am no longer actively employed regardless of any reasonable
        notice period mandated under local law (including, but not limited to
        statutory law, regulatory law and/or common law) and the right to
        receive grants of purchase rights will not continue during any required
        notice period; (h) the purchase rights have been granted to me in my
        status as an employee of my employer ("Employer"), and, in the event
        that Employer is not the Company, the grant of purchase rights can in no
        event be understood or interpreted to mean that the Company is my
        employer or that I have an employment relationship with the Company; (i)
        the future value of the underlying Shares is unknown and cannot be
        predicted with certainty; (j) if the value of the underlying Shares
        decreases in value, the Shares may not be worth as much as I paid for
        them; (k) no claim or entitlement to compensation or damages arises from
        termination of the purchase rights or diminution

<PAGE>

        in value of the Shares purchased through the Stock Purchase Plan, and I
        irrevocably release the Company and Employer from any such claim that
        may arise.

6.      The Company will assess its requirements regarding income tax, social
        insurance contributions or related tax ("Tax-Related Items") obligations
        in connection with the stock purchase rights, including the grant, the
        purchase of Shares and the sale of Shares. These requirements may change
        from time to time as laws or interpretations change. Regardless of the
        Company's actions in this regard, I hereby acknowledge and agree that
        the ultimate liability for any and all Tax-Related Items is and remains
        my responsibility and liability and that the Company (a) makes no
        representations or undertakings regarding treatment of any Tax-Related
        Items in connection with any aspect of the grant of purchase rights,
        including the grant, the purchase of Shares and the sale of Shares; and
        (b) does not commit to structure the terms of the grant or any aspect of
        the purchase rights to reduce or eliminate my liability regarding
        Tax-Related Items.

        In the event that the Company and/or Employer must withhold any
        Tax-Related Items as a result of the grant, purchase of Shares or sale
        of Shares, I agree to make arrangements satisfactory to the Company and
        Employer to satisfy all withholding requirements. I authorize the
        Company and Employer to withhold all applicable Tax-Related Items
        legally due from me from my wages or other cash compensation paid to me
        by the Company and/or Employer or from proceeds from the sale of Shares.

7.      The Stock Purchase Plan is incorporated herein by reference. The Stock
        Purchase Plan and this Subscription Agreement constitute the entire
        agreement of the parties with respect to the subject matter hereof and
        supersede in their entirety all prior undertakings and agreements of the
        Company and Employee, with respect to the subject matter hereof, and may
        not be modified adversely to the Employee interest except by means of a
        writing signed by the Company and Employee. This agreement is governed
        by California law except for that body of law pertaining to conflict of
        laws.

8.      I understand that my employment relationship with the Company is for an
        unspecified duration and can be terminated at any time, with or without
        cause. Nothing in this agreement or the Stock Purchase Plan changes the
        at-will nature of my employment.

9.      I have received a copy of the Company's most recent prospectus, which
        describes the Stock Purchase Plan, and a copy of the complete "Altera
        Corporation 1987 Employee Stock Purchase Plan". I understand that my
        participation in the Stock Purchase Plan is in all respects subject to
        the terms of the Plan.

10.     I HAVE NOT elected the DIRECT DEPOSIT PROGRAM. Please issue my shares
        under the following
        name(s) _____________________________________________________.

11.     I HAVE elected the DIRECT DEPOSIT PROGRAM. My broker of choice is:

              ___ Smith Barney    ___ Charles Schwab

    My account number is _____________________

(If selection of the Direct Deposit Program is indicated, account number must be
included)

12.     I hereby agree to be bound by the terms of the Stock Purchase Plan. The
        effectiveness of this Subscription Agreement is dependent upon my
        eligibility to participate in the Stock Purchase Plan.

_______________________________________                        _________________
Employee Signature                                             Date

<PAGE>

              ALTERA CORPORATION 1987 EMPLOYEE STOCK PURCHASE PLAN

                             BENEFICIARY DESIGNATION

In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the Stock
Purchase Plan:

PRIMARY (PLEASE PRINT)

NAME: (PLEASE PRINT)

        ------------------------------------------------------------------------
        (FIRST)       (MIDDLE)              (LAST)               (RELATIONSHIP)

        ------------------------------------------------------------------------
        (SOCIAL SECURITY NUMBER, IF APPLICABLE)

        ------------------------------------------------------------------------
        (STREET ADDRESS)

        ------------------------------------------------------------------------
        (CITY)                      (STATE)                      (ZIP)

SECONDARY (PLEASE PRINT)

        ------------------------------------------------------------------------
        (FIRST)       (MIDDLE)              (LAST)               (RELATIONSHIP)

        ------------------------------------------------------------------------
        (SOCIAL SECURITY NUMBER, IF APPLICABLE)

        ------------------------------------------------------------------------
        (STREET ADDRESS)

        ------------------------------------------------------------------------
        (CITY)                      (STATE)                      (ZIP)

        ------------------------------------------------------------------------
        (FIRST)       (MIDDLE)              (LAST)               (RELATIONSHIP)

        ------------------------------------------------------------------------
        (SOCIAL SECURITY NUMBER, IF APPLICABLE)

        ------------------------------------------------------------------------
        (STREET ADDRESS)

        ------------------------------------------------------------------------
        (CITY)                      (STATE)                      (ZIP)

---------------------------------------                        -----------------
EMPLOYEE SIGNATURE                                                      DATE<PAGE>
                                                                   EXHIBIT 10.14

                               ALTERA CORPORATION

                             1996 STOCK OPTION PLAN

                           (As amended April 30, 2002)

        1.     Purposes of the Plan. The purposes of this Stock Option Plan are:

                -       to attract and retain the best available personnel for
                        positions of substantial responsibility,

                -       to provide additional incentive to Employees and
                        Consultants, and

                -       to promote the success of the Company's business.

        Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant.

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

               (a) "Administrator" means the Board or any Committees as shall be
administering the Plan, in accordance with Section 4 of the Plan.

               (b) "Applicable Laws" means the legal requirements relating to
the administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code and the applicable laws of any
foreign country or jurisdiction where Options are, or will be, granted under the
Plan.

               (c) "Board" means the Board of Directors of the Company.

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

               (e) "Committee" means a Committee appointed by the Board in
accordance with Section 4 of the Plan.

               (f) "Common Stock" means the Common Stock of the Company.

               (g) "Company" means Altera Corporation, a Delaware corporation.

               (h) "Consultant" means any person, including an advisor, engaged
by the Company or a Parent or Subsidiary to render services and who is
compensated for such services. The term "Consultant" shall not include Directors
who are paid only a director's fee by the Company or who are not compensated by
the Company for their services as Directors.

                                       1
<PAGE>

               (i) "Continuous Status as an Employee or Consultant" means that
the employment or consulting relationship with the Company, any Parent, or
Subsidiary, is not interrupted or terminated. Continuous Status as an Employee
or Consultant shall not be considered interrupted in the case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor. A
leave of absence approved by the Company shall include sick leave, military
leave, or any other personal leave approved by an authorized representative of
the Company. For purposes of Incentive Stock Options, no such leave may exceed
ninety days, unless reemployment upon expiration of such leave is guaranteed by
statute or contract. If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, on the 181st day of such leave any
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option.

               (j) "Director" means a member of the Board.

               (k) "Disability" means total and permanent disability as defined
in Section 22(e)(3) of the Code.

               (l) "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.

               (m) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

               (n) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:

                        (i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;

                        (ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;

                        (iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

                                       2
<PAGE>

               (o) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.

               (p) "Misconduct" means the commission of any act that is
inimical, contrary, or harmful to the interests of the Company (or any Parent or
Subsidiary), including but not limited to (1) conduct related to employment for
which either criminal or civil penalties may be sought, (2) willful violation of
the Company's written policies, (3) engaging in any activity that is in
competition with the Company (or any Parent or Subsidiary), or (4) unauthorized
disclosure of confidential information or trade secrets of the Company (or any
Parent or Subsidiary). The foregoing definition shall not be deemed to be
inclusive of all acts or omissions that the Company (or any Parent or
Subsidiary) may consider as Misconduct for purposes of the Plan.

               (q) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.

               (r) "Notice of Grant" means a written notice evidencing certain
terms and conditions of an individual Option grant. The Notice of Grant is part
of the Option Agreement.

               (s) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

               (t) "Option" means a stock option granted pursuant to the Plan.

               (u) "Option Agreement" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the
Plan.

               (v) "Optioned Stock" means the Common Stock subject to an Option.

               (w) "Optionee" means an Employee or Consultant who holds an
outstanding Option.

               (x) "Parent" means a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.

               (y) "Plan" means this 1996 Stock Option Plan.

               (z) "Retirement" means:

                        (i) a termination of Optionee's Continuous Status as an
Employee or Consultant, other than for Misconduct, after attaining age
fifty-five (55) with at least ten (10) years of service as an Employee of the
Company; or

                                       3
<PAGE>

                        (ii) a termination of Optionee's Continuous Status as an
Employee or Consultant as a result of Disability, regardless of Optionee's age,
if Optionee has completed at least ten (10) years of service as an Employee of
the Company and if Optionee qualifies for Social Security disability benefits at
the time of such termination.

               (aa) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

               (bb) "Section 16" means Section 16 of the Securities Exchange Act
of 1934, as amended.

               (cc) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.

               (dd) "Subsidiary" means a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.

        3.     Stock Subject to the Plan. Subject to the provisions of Section
12 of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 68,000,000 Shares. The Shares may be authorized, but
unissued, or reacquired Common Stock.

               If an Option expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan shall not be returned to the Plan and shall not become available for
future distribution under the Plan.

        4.     Administration of the Plan.

               (a)    Procedure.

                        (i) Multiple Administrative Bodies. If permitted by Rule
16b-3, the Plan may be administered by different bodies with respect to
Directors, Officers who are not Directors, and Employees who are neither
Directors nor Officers.

                        (ii) Administration With Respect to Directors and
Officers Subject to Section 16. With respect to Option grants made to Employees
who are also Officers or Directors subject to Section 16 of the Exchange Act,
the Plan shall be administered by (A) the Board, if the Board may administer the
Plan in a manner complying with the rules under Rule 16b-3 relating to the
disinterested administration of employee benefit plans under which Section 16
exempt discretionary grants and awards of equity securities are to be made, or
(B) a committee or committees designated by the Board to administer the Plan,
which committee shall be constituted to comply with the rules under Rule 16b-3
relating to the disinterested administration of employee benefit plans under
which Section 16 exempt discretionary grants and awards of equity

                                       4
<PAGE>

securities are to be made. Once appointed, such Committee shall continue to
serve in its designated capacity until otherwise directed by the Board. From
time to time the Board may increase the size of the Committee and appoint
additional members, remove members (with or without cause) and substitute new
members, fill vacancies (however caused), and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by the rules under Rule 16b-3 relating to the disinterested
administration of employee benefit plans under which Section 16 exempt
discretionary grants and awards of equity securities are to be made.

                        (iii) Administration With Respect to Other Persons. With
respect to Option grants made to Employees or Consultants who are neither
Directors nor Officers of the Company, the Plan shall be administered by (A) the
Board or (B) a committee or committees designated by the Board, which committee
shall be constituted to satisfy Applicable Laws. Once appointed, such Committee
shall serve in its designated capacity until otherwise directed by the Board.
The Board may increase the size of the Committee and appoint additional members,
remove members (with or without cause) and substitute new members, fill
vacancies (however caused), and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by
Applicable Laws.

               (b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:

                        (i) to grant options to Employees and Consultants
hereunder;

                        (ii) to determine the Fair Market Value of the Common
Stock, in accordance with Section 2(n) of the Plan;

                        (iii) to determine the Consultants and Employees
eligible to be granted Options hereunder;

                        (iv) to determine whether and to what extent Options are
granted hereunder;

                        (v) to determine the number of shares of Common Stock to
be covered by each Option granted hereunder;

                        (vi) to approve forms of agreement for use under the
Plan;

                        (vii) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration, and any restriction or limitation regarding
any Option or the shares of Common Stock relating thereto, based in each case on
such factors as the Administrator, in its sole discretion, shall determine;

                                       5
<PAGE>

                        (viii) to construe and interpret the terms of the Plan
and awards granted pursuant to the Plan;

                        (ix) to prescribe, amend, and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;

                        (x) to modify or amend each Option (subject to Section
14(c) of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than is otherwise
provided for in the Plan;

                        (xi) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option previously
granted by the Administrator; and

                        (xii) to make all other determinations deemed necessary
or advisable for administering the Plan.

               (c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options.

        5.     Eligibility. Nonstatutory Stock Options may be granted to those
Employees and Consultants selected by the Administrator. Incentive Stock Options
may be granted only to those Employees selected by the Administrator. If
otherwise eligible, an Employee or Consultant who has been granted an Option may
be granted additional Options.

        6.     Limitations.

`               (a) Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted.

               (b) Neither the Plan nor any Option shall confer upon an Optionee
any right with respect to continuing the Optionee's employment or consulting
relationship with the Company, nor shall they interfere in any way with the
Optionee's right or the Company's right to terminate such employment or
consulting relationship at any time, with or without cause.

               (c) The following limitations shall apply to grants of Options to
Employees:

                                       6
<PAGE>

                        (i) No Employee shall be granted, in any fiscal year of
the Company, Options to purchase more than 2,000,000 Shares.

                        (ii) In connection with his or her initial employment,
an Employee may be granted Options to purchase up to an additional 2,000,000
Shares which shall not count against the limit set forth in subsection (i)
above.

                        (iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 12.

        7.     Term of Plan. Subject to Section 18 of the Plan, the Plan shall
become effective upon its approval by the shareholders of the Company as
described in Section 18 of the Plan. It shall continue in effect for a term of
ten (10) years unless terminated earlier under Section 14 of the Plan.

        8.     Term of Option. The term of each Option shall be stated in the
Notice of Grant; provided, however, that in the case of an Incentive Stock
Option, the term shall be ten (10) years from the date of grant or such shorter
term as may be provided in the Notice of Grant.

        9.     Option Exercise Price and Consideration.

               (a) Exercise Price. The per share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be no less than 100% of the
Fair Market Value per Share on the date of grant.

               (b) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised. In so doing, the Administrator may specify that an
Option may not be exercised until the completion of a service period.

               (c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:

                        (i) cash;

                        (ii) check;

                        (iii) promissory note;

                        (iv) other Shares which (A) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six months on the date of

                                       7
<PAGE>

surrender, and (B) have a Fair Market Value on the date of surrender equal to
the aggregate exercise price of the Shares as to which said Option shall be
exercised;

                        (v) delivery of a properly executed exercise notice
together with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price;

                        (vi) a reduction in the amount of any Company liability
to the Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;

                        (vii) any combination of the foregoing methods of
payment; or

                        (viii) such other consideration and method of payment
for the issuance of Shares to the extent permitted by Applicable Laws.

        10.    Exercise of Option.

               (a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement.

                        An Option may not be exercised for a fraction of a
Share.

                        An Option shall be deemed exercised when the Company
receives:
(i) written notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the stock
certificate evidencing such Shares is issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly after the Option is exercised. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 12 of the
Plan.

                        Exercising an Option in any manner shall decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.

               (b) Termination of Employment or Consulting Relationship.

                                       8
<PAGE>

                        (i) In General. Upon termination of an Optionee's
Continuous Status as an Employee or Consultant, other than upon the Optionee's
death, Disability, or Retirement, the Optionee may exercise his or her Option
within such period of time as is specified in the Notice of Grant to the extent
that he or she is entitled to exercise it on the date of termination (but in no
event later than the expiration of the term of such Option as set forth in the
Notice of Grant). In the absence of a specified time in the Notice of Grant, the
Option shall remain exercisable for thirty (30) days following the Optionee's
termination. In the case of an Incentive Stock Option, such period of time for
exercise shall not exceed three (3) months from the date of termination. If, on
the date of termination, the Optionee is not entitled to exercise his or her
entire Option, the Shares covered by the unexercisable portion of the Option
shall revert to the Plan. If, after termination, the Optionee does not exercise
his or her Option within the time specified by the Administrator, the Option
shall terminate, and the Shares covered by such Option shall revert to the Plan.

                        Notwithstanding the above, in the event of an Optionee's
change in status from Consultant to Employee or Employee to Consultant, the
Optionee's Continuous Status as an Employee or Consultant shall not
automatically terminate solely as a result of such change in status. In the
event of an Optionee's change in status from Employee to Consultant, each
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option three months and one day following such change of status.

                        (ii) Retirement of Optionee. In the event of termination
of an Optionee's Continuous Status as an Employee or Consultant as a result of
his or her Retirement, such Optionee's Option shall, in the sole discretion of
the Administrator, accelerate vesting or continue to vest, continue to become
exercisable, and may be exercised during such period of time as is determined by
the Administrator and as provided in the Option Agreement (but in no event may
the Option be exercised after the expiration date of the term of such Option as
set forth in the Option Agreement). If, at the end of such period of time, the
Optionee is not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall revert to the Plan. If
the Optionee does not exercise his or her Option within the time specified by
the Administrator, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.

                        (iii) Disability of Optionee. Upon termination of an
Optionee's Continuous Status as an Employee or Consultant as a result of the
Optionee's Disability, the Optionee may exercise his or her Option at any time
within three (3) months (or such other period of time not exceeding twelve (12)
months as is determined by the Administrator, with such determination in the
case of an Incentive Stock Option being made at the time of grant of the Option)
from the date of termination, but only to the extent that the Optionee is
entitled to exercise it on the date of termination (and in no event later than
the expiration of the term of the Option as set forth in the Notice of Grant).
If, on the date of termination, the Optionee is not entitled to exercise his or
her entire Option, the Shares covered by the unexercisable portion of the Option
shall revert to the Plan. If, after termination, the Optionee does not exercise
his or her

                                       9
<PAGE>

Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

                        (iv) Death of Optionee. Upon the death of an Optionee:

                            (a) during the term of the Option who is at the time
of his or her death an Employee or Consultant of the Company and who shall have
been in Continuous Status as an Employee or Consultant since the date of grant
of the Option, the Option may be exercised by the Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or inheritance
at any time within six (6) months (or, in the case of Retirement, such longer
period of time, not to exceed 12 months, as determined by the Administrator)
following the date of death, but in no event later than the date of expiration
of the term of such Option as set forth in the Option Agreement, and only to the
extent of the right to exercise the Option that would have accrued had the
Optionee continued living and remained in Continuous Status as an Employee or
Consultant six (6) months after the date of death, subject to the limitation set
forth in Section 6(a); or

                            (b) within thirty (30) days (or such other period of
time not exceeding three (3) months as is determined by the Administrator, with
such determination in the case of an Incentive Stock Option being made at the
time of grant of the Option) after his or her termination of Continuous Status
as an Employee or Consultant, the Option may be exercised by the Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, at any time within six (6) months (or, in the case of
Retirement, such longer period of time, not to exceed 12 months, as determined
by the Administrator) following the date of death, but in no event later than
the date of expiration of the term of such Option as set forth in the Option
Agreement, and only to the extent of the right to exercise the Option that had
accrued at the date of termination.

                            (c) Buyout Provisions. The Administrator may at any
time offer to buy out for a payment in cash or Shares, an Option previously
granted based on such terms and conditions as the Administrator shall establish
and communicate to the Optionee at the time that such offer is made.

                            (d) Rule 16b-3. Options granted to individuals
subject to Section 16 of the Exchange Act ("Insiders") must comply with the
applicable provisions of Rule 16b-3 and shall contain such additional conditions
or restrictions as may, in the Administrator's sole discretion, be necessary and
desirable to qualify thereunder for the maximum exemption from Section 16 of the
Exchange Act with respect to Plan transactions.

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

        12.    Adjustments Upon Changes in Capitalization, Dissolution, Merger,
or Asset Sale.

                                       10
<PAGE>

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

               (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option prior to such transaction as to all
of the Optioned Stock covered thereby, including Shares as to which the Option
would not otherwise be exercisable. In addition, the Administrator may provide
that any Company repurchase option applicable to any Shares purchased upon
exercise of an Option shall lapse as to all such Shares, provided the proposed
dissolution or liquidation takes place at the time and in the manner
contemplated. To the extent it has not been previously exercised, an Option will
terminate immediately prior to the consummation of such proposed action.

               (c) Merger or Asset Sale. In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option shall be assumed or an equivalent option
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. In the event that the successor corporation refuses to
assume or substitute for the Option, the Optionee shall have the right to
exercise the Option as to all of the Optioned Stock, including Shares as to
which it would not otherwise be exercisable. If an Option is exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee that the Option shall be fully
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option shall terminate upon the expiration of such period. For the purposes
of this paragraph, the Option shall be considered assumed if, following the
merger or sale of assets, the option or right confers the right to purchase or
receive, for each Share of Optioned Stock subject to the Option immediately
prior to the merger or sale of assets, the consideration (whether stock, cash,
or other securities or property) received in the merger or sale of assets by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the

                                       11
<PAGE>

outstanding Shares); provided, however, that if such consideration received in
the merger or sale of assets was not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Option, for each Share of Optioned Stock subject to the Option,
to be solely common stock of the successor corporation or its Parent equal in
fair market value to the per share consideration received by holders of Common
Stock in the merger or sale of assets.

        13.    Date of Grant. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.

        14.    Amendment and Termination of the Plan.

               (a) Amendment and Termination. The Board may at any time amend,
alter, suspend, or terminate the Plan.

               (b) Shareholder Approval. The Company shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Rule 16b-3 or with Section 422 of the Code (or any successor rule or
statute or other applicable law, rule, or regulation, including the requirements
of any exchange or quotation system on which the Common Stock is listed or
quoted). Such shareholder approval, if required, shall be obtained in such a
manner and to such a degree as is required by the applicable law, rule, or
regulation.

               (c) Effect of Amendment or Termination. No amendment, alteration,
suspension, or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.

        15.    Conditions Upon Issuance of Shares.

               (a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, Applicable Laws,
and the requirements of any stock exchange or quotation system upon which the
Shares may then be listed or quoted, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.

               (b) Investment Representations. As a condition to the exercise of
an Option, the Company may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

                                       12
<PAGE>

        16.    Liability of Company.

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

               (b) Grants Exceeding Allotted Shares. If the Optioned Stock
covered by an Option exceeds, as of the date of grant, the number of Shares
which may be issued under the Plan without additional shareholder approval, such
Option shall be void with respect to such excess Optioned Stock, unless
shareholder approval of an amendment sufficiently increasing the number of
Shares subject to the Plan is timely obtained in accordance with Section 14(b)
of the Plan.

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

        18.    Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the manner and to the degree required under Applicable Laws and the rules of
any stock exchange upon which the Common Stock is listed.

                                       13

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