Document:

<PAGE>   1

                                                                EXHIBIT 10.56(b)

 [FORM OF STOCK OPTION AGREEMENT FOR FORMER EMPLOYEES OF NORTHWEST LOGIC, INC.]

          ALTERA CORPORATION 2000 NON-QUALIFIED STOCK OPTION PLAN NO. 1

                   NOTICE OF NON-QUALIFIED STOCK OPTION GRANT

        Grantee's Name and Address:
                                       -----------------------------------------

                                       -----------------------------------------

                                       -----------------------------------------

        You have been granted an option to purchase shares of Common Stock,
subject to the terms and conditions of this Notice of Non-Qualified Stock Option
Grant (the "Notice"), the Altera Corporation 2000 Non-Qualified Stock Option
Plan No. 1, as amended from time to time (the "Plan") and the Non-Qualified
Stock Option Award Agreement (the "Option Agreement") attached hereto, as
follows. Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Notice.

        Grant Number
                                       -----------------------------------------
        Date of Grant
                                       -----------------------------------------
        Vesting Commencement Date
                                       -----------------------------------------
        Exercise Price per Share       $
                                        -------------------
        Total Number of Shares subject
        to the Option
                                       -----------------------------------------
        Total Exercise Price           $
                                        ----------------------------------------
        Expiration Date:
                                       --------------------

Definitions:

        As used herein, the following definitions shall apply:

        "Adjusted Termination Date" shall be determined by adding ________ days
to the date of termination of Grantee's Continuous Service and subtracting the
number of days of any Vesting Suspension Periods.

        "Cause" shall be deemed to exist if, in the reasonable judgment of the
Company's Chief Executive Officer, the Grantee: (i) commits fraud, theft or
embezzlement of a type that would be subject to prosecution under Federal or
Oregon law, against the Company or any Related Entity, and there is clear and
convincing evidence that such fraud, theft, or embezzlement occurred; (ii) is
convicted for having committed a serious felony, and such conviction has a
significant adverse effect on the affairs or business of the Company; (iii)
compromises or attempts to compromise material trade secrets or other
proprietary information of the Company and such action materially damages the
Company, or in the event of an unsuccessful attempt, would likely have caused
material damage to the Company if successful; (iv) materially breaches any
non-competition or non-solicitation agreement with the Company or any Related
Entity; (v) fails
<PAGE>   2

to devote such business time and effort necessary to adequately and properly
discharge his or her duties to the Company or any Related Entity or engages in
outside activities that substantially interfere with such efforts; or (vi)
engages in any grossly negligent act or willful misconduct in the scope of his
or her duties to the Company or any Related Entity. During any criminal
prosecution covered by subsection (ii) above, the vesting of Shares subject to
the Option shall be suspended. If the prosecution does not result in a
conviction, the Grantee shall receive credit toward vesting for the period of
the prosecution as if the prosecution had not occurred.

        "Vesting Suspension Period" means the period or periods during which the
vesting of Grantee's Options has ceased pursuant to clause (b) under "Vesting
Schedule" below.

Vesting Schedule:

        (a) Subject to Grantee's Continuous Service and other limitations set
forth in this Notice, the Plan and the Option Agreement, the Option may be
exercised, in whole or in part, in accordance with the following schedule: 25%
of the Shares subject to the Option shall vest twelve months after the Vesting
Commencement Date, and an additional 25% of the Shares subject to the Option
shall vest on each yearly anniversary of the Vesting Commencement Date
thereafter.

        (b) During any Approved Leave of Absence, the vesting of the Option as
provided in this schedule shall cease after the Approved Leave of Absence
exceeds a period of ninety (90) days. Vesting of the Option shall resume upon
the Grantee's termination of the Approved Leave of Absence and return to
Continuous Service to the Company or a Related Entity. The vesting schedule set
forth in (a) above shall be adjusted in the event that vesting temporarily
ceases pursuant to this paragraph.

        (c) In the event of termination of the Grantee's Continuous Service by
the Company or a Related Entity without Cause, that portion of such Grantee's
unvested Shares subject to the Option that would have vested as of the Adjusted
Termination Date shall fully vest immediately upon termination of such
Continuous Service.

        (d) If the Grantee's Continuous Service ceases for any reason other than
termination by the Company or a Related Entity without Cause, vesting of the
Shares subject to the Option shall immediately cease.
<PAGE>   3

        IN WITNESS WHEREOF, the Company and the Grantee have executed this
Notice and agree that the Option is to be governed by the terms and conditions
of this Notice, the Plan, and the Option Agreement.

                                       Altera Corporation,
                                       a Delaware corporation

                                       By:
                                           -------------------------------------

THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS NOTICE, THE
OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH
RESPECT TO FUTURE AWARDS OR CONTINUATION OF GRANTEE'S CONTINUOUS SERVICE, NOR
SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE'S RIGHT OR THE RIGHT OF THE
GRANTEE'S EMPLOYER TO TERMINATE GRANTEE'S CONTINUOUS SERVICE, FOR ANY REASON.
THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN EMPLOYMENT
AGREEMENT WITH THE COMPANY TO THE CONTRARY, GRANTEE'S EMPLOYMENT STATUS IS AT
WILL.

        The Grantee acknowledges receipt of a copy of the Plan and the Option
Agreement, and represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts the Option subject to all of the terms
and provisions hereof and thereof. The Grantee has reviewed this Notice, the
Plan, and the Option Agreement in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Notice, and fully
understands all provisions of this Notice, the Plan and the Option Agreement.
The Grantee hereby agrees that all disputes arising out of or relating to this
Notice, the Plan and the Option Agreement shall be resolved in accordance with
Section 12 of the Option Agreement. The Grantee further agrees to notify the
Company upon any change in the residence address indicated in this Notice.

Dated:                                 Signed:
       ----------------------                  ---------------------------------
                                                            Grantee
<PAGE>   4

                                                      GRANT NUMBER:
                                                                    ------------

          ALTERA CORPORATION 2000 NON-QUALIFIED STOCK OPTION PLAN NO. 1

                   NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

        1. Grant of Option. Altera Corporation, a Delaware corporation (the
"Company"), hereby grants to the Grantee (the "Grantee") named in the Notice of
Non-Qualified Stock Option Grant (the "Notice"), an option (the "Option") to
purchase the Total Number of Shares of Common Stock subject to the Option (the
"Shares") set forth in the Notice, at the Exercise Price per Share set forth in
the Notice (the "Exercise Price") subject to the terms and provisions of the
Notice, this Non-Qualified Stock Option Award Agreement (the "Option Agreement")
and the Company's 2000 Non-Qualified Stock Option Plan No. 1, as amended from
time to time (the "Plan"), which are incorporated herein by reference. Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Option Agreement.

        2. Exercise of Option.

                (a) Right to Exercise. The Option shall be exercisable during
its term in accordance with the Vesting Schedule set out in the Notice and with
the applicable provisions of the Plan and this Option Agreement. The Option
shall be subject to the provisions of Section 11 of the Plan relating to the
exercisability or termination of the Option in the event of a Corporate
Transaction. In no event shall the Company issue fractional Shares.

                (b) Method of Exercise. The Option shall be exercisable only by
delivery to the Company or its authorized representative of an exercise notice
in the form approved by the Administrator and in effect at the time of exercise
by such method as determined from time to time by the Administrator accompanied
by payment of the Exercise Price.

                (c) Taxes. No Shares will be delivered to the Grantee or other
person pursuant to the exercise of the Option until the Grantee or other person
has made arrangements acceptable to the Administrator for the satisfaction of
applicable income tax, employment tax, and social security tax withholding
obligations, including, without limitation, obligations incident to the receipt
of Shares. Upon exercise of the Option, the Company or the Grantee's employer
may offset or withhold (from any amount owed by the Company or the Grantee's
employer to the Grantee) or collect from the Grantee or other person an amount
sufficient to satisfy such tax obligations and/or the employer's withholding
obligations.

        3. Method of Payment. Payment of the Exercise Price shall be by any of
the following, or a combination thereof, at the election of the Grantee;
provided, however, that such exercise method does not then violate any
Applicable Law and, provided further, that the portion of the Exercise Price
equal to the par value of the Shares must be paid in cash or other legal
consideration permitted by the Delaware General Corporation Law:

                (a) cash;

                (b) check;
<PAGE>   5

                (c) surrender of shares of Common Stock or delivery of a
properly executed form of attestation of ownership of shares of Common Stock as
the Administrator may require (including withholding of Shares otherwise
deliverable upon exercise of the Option) which have a Fair Market Value on the
date of surrender or attestation equal to the aggregate Exercise Price of the
Shares as to which the Option is being exercised (but only to the extent that
such exercise of the Option would not result in an accounting compensation
charge with respect to the shares of Common Stock used to pay the exercise
price);

                (d) payment through a broker-dealer sale and remittance
procedure pursuant to which the Grantee (i) shall provide written instructions
to a Company designated brokerage firm to effect the immediate sale of some or
all of the purchased Shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased Shares and (ii) shall provide written
directives to the Company to deliver the certificates for the purchased Shares
directly to such brokerage firm in order to complete the sale transaction;

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

                (f) any combination of the foregoing methods of payment.

        4. Restrictions on Exercise. The Option may not be exercised if the
issuance of the Shares subject to the Option upon such exercise would constitute
a violation of any Applicable Laws.

        5. Termination or Change of Continuous Service. If Grantee's Continuous
Service is terminated by the Company or a Related Entity without Cause the
Grantee may, to the extent otherwise so entitled at the date of such termination
(the "Termination Date"), exercise the Option, but only within sixty (60) days
of such Termination Date. If Grantee's Continuous Service is terminated for any
other reason (other than for Disability or death, which is governed by Section 6
below), the Grantee may, to the extent otherwise so entitled at the Termination
Date, exercise the Option, but only within thirty (30) days of such Termination
Date. In no event shall the Option be exercised later than the Expiration Date
set forth in the Notice. Except as provided in Section 6 below, to the extent
that the Grantee is not entitled to exercise the Option on the Termination Date,
or if the Grantee does not exercise the Option within the time specified herein,
the Option shall terminate.

        6. Disability or Death of Grantee. If the Grantee's Continuous Service
terminates as a result of his or her Disability or death, this Option may be
exercised, but only within six (6) months from the Termination Date (and in no
event later than the Expiration Date), and only to the extent the Grantee was
otherwise entitled to exercise it on the Termination Date. To the extent that
the Grantee is not entitled to exercise the Option on the Termination Date, or
if the Option is not exercised to the extent so entitled to be within the time
specified herein, the Option shall terminate.
<PAGE>   6

        7. Transferability of Option. The Option may be transferred to any
person by will and by the laws of descent and distribution or during the
lifetime of the Grantee pursuant to a domestic relations order to the extent and
in the manner determined by the Administrator. The terms of the Option shall be
binding upon the executors, administrators, heirs, successors and transferees of
the Grantee.

        8. Term of Option. The Option may be exercised no later than the
Expiration Date set forth in the Notice or such earlier date as otherwise
provided herein.

        9. Tax Consequences. THE COMPANY MAKES NO REPRESENTATION OR WARRANTY TO
THE GRANTEE AS TO THE TAX CONSEQUENCES OF VESTING OR EXERCISE OF AN OPTION AND
DISPOSITION OF THE SHARES. ACCORDINGLY, THE GRANTEE SHOULD CONSULT A TAX ADVISER
REGARDING VESTING OR EXERCISING OF THE OPTION OR DISPOSING OF THE SHARES.

        10. Entire Agreement: Governing Law. The Notice, the Plan and this
Option 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 the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee's interest except by
means of a writing signed by the Company and the Grantee. Nothing in the Notice,
the Plan and this Option Agreement (except as expressly provided therein) is
intended to confer any rights or remedies on any persons other than the parties.
The Notice, the Plan and this Option Agreement are to be construed in accordance
with and governed by the internal laws of the State of Delaware without giving
effect to any choice of law rule that would cause the application of the laws of
any jurisdiction other than the internal laws of the State of Delaware to the
rights and duties of the parties. Should any provision of the Notice, the Plan
or this Option Agreement be determined by a court of law to be illegal or
unenforceable, such provision shall be enforced to the fullest extent allowed by
law and the other provisions shall nevertheless remain effective and shall
remain enforceable.

        11. Headings. The captions used in the Notice and this Option Agreement
are inserted for convenience and shall not be deemed a part of the Option for
construction or interpretation.

        12. Dispute Resolution The provisions of this Section 12 shall be the
exclusive means of resolving disputes arising out of or relating to the Notice,
the Plan and this Option Agreement. The Company, the Grantee, and the Grantee's
assignees pursuant to Section 7 (the "parties") shall attempt in good faith to
resolve any disputes arising out of or relating to the Notice, the Plan and this
Option Agreement by negotiation between individuals who have authority to settle
the controversy. Negotiations shall be commenced by either party by notice of a
written statement of the party's position and the name and title of the
individual who will represent the party. Within thirty (30) days of the written
notification, the parties shall meet at a mutually acceptable time and place,
and thereafter as often as they reasonably deem necessary, to resolve the
dispute. If the dispute has not been resolved by negotiation within ninety (90)
days of the written notification, either party may commence litigation to
resolve the dispute. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY
HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more
<PAGE>   7

provisions of this Section 12 shall for any reason be held invalid or
unenforceable, it is the specific intent of the parties that such provisions
shall be modified to the minimum extent necessary to make it or its application
valid and enforceable.

        13. Notices. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon confirmed electronic or
personal delivery or upon deposit in the United States mail by certified mail
(if the parties are within the United States) or upon deposit for delivery by an
internationally recognized express mail courier service (for international
delivery of notice), with postage and fees prepaid, addressed to the Grantee at
its address as shown in the Notice or to the Company at 101 Innovation Drive,
San Jose, California 95134, or to such other address as such party may designate
in writing from time to time to the other party.<PAGE>   1

                                                                EXHIBIT 10.56(c)

      [FORM OF STOCK OPTION AGREEMENT FOR FORMER FOUNDING SHAREHOLDERS OF
                             NORTHWEST LOGIC, INC.]

          ALTERA CORPORATION 2000 NON-QUALIFIED STOCK OPTION PLAN NO. 1

                   NOTICE OF NON-QUALIFIED STOCK OPTION GRANT

        Grantee's Name and Address:
                                       -----------------------------------------

                                       -----------------------------------------

                                       -----------------------------------------

        You have been granted an option to purchase shares of Common Stock,
subject to the terms and conditions of this Notice of Non-Qualified Stock Option
Grant (the "Notice"), the Altera Corporation 2000 Non-Qualified Stock Option
Plan No. 1, as amended from time to time (the "Plan") and the Non-Qualified
Stock Option Award Agreement (the "Option Agreement") attached hereto, as
follows. Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Notice.

        Grant Number
                                       -----------------------------------------
        Date of Grant
                                       -----------------------------------------
        Vesting Commencement Date
                                       -----------------------------------------
        Exercise Price per Share       $
                                        -------------------
        Total Number of Shares subject
        to the Option
                                       -----------------------------------------
        Total Exercise Price           $
                                        ----------------------------------------
        Expiration Date:
                                       --------------------

Definitions:

        As used herein, the following definitions shall apply:

        "Cause" shall be deemed to exist if (a), in the reasonable judgment of
the Company's Chief Executive Officer, the Grantee: (i) commits fraud, theft or
embezzlement of a type that would be subject to prosecution under Federal or
Oregon law, against the Company or any Related Entity, and there is clear and
convincing evidence that such fraud, theft, or embezzlement occurred; (ii) is
convicted for having committed a serious felony, and such conviction has a
significant adverse effect on the affairs or business of the Company; (iii)
compromises or attempts to compromise material trade secrets or other
proprietary information of the Company and such action materially damages the
Company, or in the event of an unsuccessful attempt, would likely have caused
material damage to the Company if successful; (iv) materially breaches any
non-competition or non-solicitation agreement with the Company or any Related
Entity; (v) fails to devote such business time and effort necessary to
adequately and properly discharge his or her duties to the Company or any
Related Entity or engages in outside activities that substantially interfere
with such efforts; or (vi) engages in any grossly negligent act or willful
misconduct in the scope of his or her duties to the Company or any Related
Entity
<PAGE>   2

or (b) if the Related Entity employing the Grantee is sold or otherwise disposed
of by the Company such that it is no longer a Related Entity and the Grantee has
not been offered employment with the Company or any Related Entity on or before
such sale or other disposal. During any criminal prosecution covered by
subsection (a)(ii) above, the vesting of Shares subject to the Option shall be
suspended. If the prosecution does not result in a conviction, the Grantee shall
receive credit toward vesting for the period of the prosecution as if the
prosecution had not occurred.

        "Good Reason" means that the Company or any Related Entity employing the
Grantee has, without such Grantee's express written consent, (1) reduced such
Grantee's base salary, except in the case of a general salary reduction plan;
(2) required such Grantee to assume a position that is not in a
_______________________________ capacity; or (3) moved such Grantee's primary
workplace outside of the greater metropolitan Portland, Oregon area.

Vesting Schedule:

        (a) Subject to Grantee's Continuous Service and other limitations set
forth in this Notice, the Plan and the Option Agreement, the Option may be
exercised, in whole or in part, in accordance with the following schedule: 25%
of the Shares subject to the Option shall vest twelve months after the Vesting
Commencement Date, and an additional 25% of the Shares subject to the Option
shall vest on each yearly anniversary of the Vesting Commencement Date
thereafter.

        (b) During any Approved Leave of Absence, the vesting of the Option as
provided in this schedule shall cease after the Approved Leave of Absence
exceeds a period of ninety (90) days. Vesting of the Option shall resume upon
the Grantee's termination of the Approved Leave of Absence and return to
Continuous Service to the Company or a Related Entity. The vesting schedule set
forth in (a) above shall be adjusted in the event that vesting temporarily
ceases pursuant to this paragraph.

        (c) In the event of termination of the Grantee's Continuous Service by
the Company or a Related Entity without Cause or by the Grantee for Good Reason,
such Grantee's unvested Shares subject to the Option shall fully vest
immediately upon termination of such Continuous Service.

        (d) Upon the death or Disability of the Grantee, only that portion of
such Grantee's Shares subject to the Option that would have vested on the next
anniversary of the Vesting Commencement Date (subject to any adjustments in the
vesting schedule required by (b) above) shall immediately vest.

        (e) If the Grantee's Continuous Service ceases for any reason other than
by death, Disability or termination by the Company or a Related Entity without
Cause or by the Grantee for Good Reason, vesting of the Shares subject to the
Option shall immediately cease.
<PAGE>   3

        IN WITNESS WHEREOF, the Company and the Grantee have executed this
Notice and agree that the Option is to be governed by the terms and conditions
of this Notice, the Plan, and the Option Agreement.

                                       Altera Corporation,
                                       a Delaware corporation

                                       By:
                                           -------------------------------------

THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS NOTICE, THE
OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH
RESPECT TO FUTURE AWARDS OR CONTINUATION OF GRANTEE'S CONTINUOUS SERVICE, NOR
SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE'S RIGHT OR THE RIGHT OF THE
GRANTEE'S EMPLOYER TO TERMINATE GRANTEE'S CONTINUOUS SERVICE, FOR ANY REASON.
THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN EMPLOYMENT
AGREEMENT WITH THE COMPANY TO THE CONTRARY, GRANTEE'S EMPLOYMENT STATUS IS AT
WILL.

        The Grantee acknowledges receipt of a copy of the Plan and the Option
Agreement, and represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts the Option subject to all of the terms
and provisions hereof and thereof. The Grantee has reviewed this Notice, the
Plan, and the Option Agreement in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Notice, and fully
understands all provisions of this Notice, the Plan and the Option Agreement.
The Grantee hereby agrees that all disputes arising out of or relating to this
Notice, the Plan and the Option Agreement shall be resolved in accordance with
Section 12 of the Option Agreement. The Grantee further agrees to notify the
Company upon any change in the residence address indicated in this Notice.

Dated:                                 Signed:
       ----------------------                  ---------------------------------
                                                            Grantee
<PAGE>   4

                                                      GRANT NUMBER:
                                                                    ------------

          ALTERA CORPORATION 2000 NON-QUALIFIED STOCK OPTION PLAN NO. 1

                   NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

        1. Grant of Option. Altera Corporation, a Delaware corporation (the
"Company"), hereby grants to the Grantee (the "Grantee") named in the Notice of
Stock Option Grant (the "Notice"), an option (the "Option") to purchase the
Total Number of Shares of Common Stock subject to the Option (the "Shares") set
forth in the Notice, at the Exercise Price per Share set forth in the Notice
(the "Exercise Price") subject to the terms and provisions of the Notice, this
Non-Qualified Stock Option Award Agreement (the "Option Agreement") and the
Company's 2000 Non-Qualified Stock Option Plan No. 1, as amended from time to
time (the "Plan"), which are incorporated herein by reference. Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined
meanings in this Option Agreement.

        2. Exercise of Option.

                (a) Right to Exercise. The Option shall be exercisable during
its term in accordance with the Vesting Schedule set out in the Notice and with
the applicable provisions of the Plan and this Option Agreement. The Option
shall be subject to the provisions of Section 11 of the Plan relating to the
exercisability or termination of the Option in the event of a Corporate
Transaction. In no event shall the Company issue fractional Shares.

                (b) Method of Exercise. The Option shall be exercisable only by
delivery to the Company or its authorized representative of an exercise notice
in the form approved by the Administrator and in effect at the time of exercise
by such method as determined from time to time by the Administrator accompanied
by payment of the Exercise Price.

                (c) Taxes. No Shares will be delivered to the Grantee or other
person pursuant to the exercise of the Option until the Grantee or other person
has made arrangements acceptable to the Administrator for the satisfaction of
applicable income tax, employment tax, and social security tax withholding
obligations, including, without limitation, obligations incident to the receipt
of Shares. Upon exercise of the Option, the Company or the Grantee's employer
may offset or withhold (from any amount owed by the Company or the Grantee's
employer to the Grantee) or collect from the Grantee or other person an amount
sufficient to satisfy such tax obligations and/or the employer's withholding
obligations.

        3. Method of Payment. Payment of the Exercise Price shall be by any of
the following, or a combination thereof, at the election of the Grantee;
provided, however, that such exercise method does not then violate any
Applicable Law and, provided further, that the portion of the Exercise Price
equal to the par value of the Shares must be paid in cash or other legal
consideration permitted by the Delaware General Corporation Law:

                (a) cash;

                (b) check;
<PAGE>   5

                (c) surrender of shares of Common Stock or delivery of a
properly executed form of attestation of ownership of shares of Common Stock as
the Administrator may require (including withholding of Shares otherwise
deliverable upon exercise of the Option) which have a Fair Market Value on the
date of surrender or attestation equal to the aggregate Exercise Price of the
Shares as to which the Option is being exercised (but only to the extent that
such exercise of the Option would not result in an accounting compensation
charge with respect to the shares of Common Stock used to pay the exercise
price);

                (d) payment through a broker-dealer sale and remittance
procedure pursuant to which the Grantee (i) shall provide written instructions
to a Company designated brokerage firm to effect the immediate sale of some or
all of the purchased Shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased Shares and (ii) shall provide written
directives to the Company to deliver the certificates for the purchased Shares
directly to such brokerage firm in order to complete the sale transaction;

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

                (f) any combination of the foregoing methods of payment.

        4. Restrictions on Exercise. The Option may not be exercised if the
issuance of the Shares subject to the Option upon such exercise would constitute
a violation of any Applicable Laws.

        5. Termination or Change of Continuous Service. If Grantee's Continuous
Service is terminated by the Company or a Related Entity without Cause or by the
Grantee for Good Reason, the Grantee may, to the extent otherwise so entitled at
the date of such termination (the "Termination Date"), exercise the Option, but
only within sixty (60) days of such Termination Date. If Grantee's Continuous
Service is terminated for any other reason (other than for Disability or death,
which is governed by Section 6 below), the Grantee may, to the extent otherwise
so entitled at the Termination Date, exercise the Option, but only within thirty
(30) days of such Termination Date. In no event shall the Option be exercised
later than the Expiration Date set forth in the Notice. Except as provided in
Section 6 below, to the extent that the Grantee is not entitled to exercise the
Option on the Termination Date, or if the Grantee does not exercise the Option
within the time specified herein, the Option shall terminate.

        6. Disability or Death of Grantee. If the Grantee's Continuous Service
terminates as a result of his or her Disability or death, this Option may be
exercised, but only within six (6) months from the Termination Date (and in no
event later than the Expiration Date), and only to the extent the Grantee was
otherwise entitled to exercise it on the Termination Date. To the extent that
the Grantee is not entitled to exercise the Option on the Termination Date, or
if the Option is not exercised to the extent so entitled to be within the time
specified herein, the Option shall terminate.
<PAGE>   6

        7. Transferability of Option. The Option may be transferred to any
person by will and by the laws of descent and distribution or during the
lifetime of the Grantee pursuant to a domestic relations order to the extent and
in the manner determined by the Administrator. The terms of the Option shall be
binding upon the executors, administrators, heirs, successors and transferees of
the Grantee.

        8. Term of Option. The Option may be exercised no later than the
Expiration Date set forth in the Notice or such earlier date as otherwise
provided herein.

        9. Tax Consequences. THE COMPANY MAKES NO REPRESENTATION OR WARRANTY TO
THE GRANTEE AS TO THE TAX CONSEQUENCES OF VESTING OR EXERCISE OF AN OPTION AND
DISPOSITION OF THE SHARES. ACCORDINGLY, THE GRANTEE SHOULD CONSULT A TAX ADVISER
REGARDING VESTING OR EXERCISING OF THE OPTION OR DISPOSING OF THE SHARES.

        10. Entire Agreement: Governing Law. The Notice, the Plan and this
Option 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 the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee's interest except by
means of a writing signed by the Company and the Grantee. Nothing in the Notice,
the Plan and this Option Agreement (except as expressly provided therein) is
intended to confer any rights or remedies on any persons other than the parties.
The Notice, the Plan and this Option Agreement are to be construed in accordance
with and governed by the internal laws of the State of Delaware without giving
effect to any choice of law rule that would cause the application of the laws of
any jurisdiction other than the internal laws of the State of Delaware to the
rights and duties of the parties. Should any provision of the Notice, the Plan
or this Option Agreement be determined by a court of law to be illegal or
unenforceable, such provision shall be enforced to the fullest extent allowed by
law and the other provisions shall nevertheless remain effective and shall
remain enforceable.

        11. Headings. The captions used in the Notice and this Option Agreement
are inserted for convenience and shall not be deemed a part of the Option for
construction or interpretation.

        12. Dispute Resolution The provisions of this Section 12 shall be the
exclusive means of resolving disputes arising out of or relating to the Notice,
the Plan and this Option Agreement. The Company, the Grantee, and the Grantee's
assignees pursuant to Section 7 (the "parties") shall attempt in good faith to
resolve any disputes arising out of or relating to the Notice, the Plan and this
Option Agreement by negotiation between individuals who have authority to settle
the controversy. Negotiations shall be commenced by either party by notice of a
written statement of the party's position and the name and title of the
individual who will represent the party. Within thirty (30) days of the written
notification, the parties shall meet at a mutually acceptable time and place,
and thereafter as often as they reasonably deem necessary, to resolve the
dispute. If the dispute has not been resolved by negotiation within ninety (90)
days of the written notification, either party may commence litigation to
resolve the dispute. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY
HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more
<PAGE>   7

provisions of this Section 12 shall for any reason be held invalid or
unenforceable, it is the specific intent of the parties that such provisions
shall be modified to the minimum extent necessary to make it or its application
valid and enforceable.

        13. Notices. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon confirmed electronic or
personal delivery or upon deposit in the United States mail by certified mail
(if the parties are within the United States) or upon deposit for delivery by an
internationally recognized express mail courier service (for international
delivery of notice), with postage and fees prepaid, addressed to the Grantee at
its address as shown in the Notice or to the Company at 101 Innovation Drive,
San Jose, California 95134, or to such other address as such party may designate
in writing from time to time to the other party.

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