EXHIBIT 10.15
FORM OF STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in Altera's 1996 Stock
Option Plan (the "Plan") shall have the same defined meanings in this Option
Agreement ("Agreement").
You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan, the Notice of Stock Option
Grant ("Notice of Grant"), and this Agreement.
1. Vesting Rights. Subject to the applicable provisions of the Plan and
this Agreement, this Option may be exercised, in whole or in part, in accordance
with the schedule set forth in the Notice of Grant.
2.Termination Period.
(a) General Rule. Except as provided below, this Option may be
exercised for thirty (30) days after termination of Optionee's employment with
the Company. In no event shall this Option be exercised later than the
Term/Expiration Date set forth in the Notice of Grant.
(b) Death; Disability. Upon the termination of Optionee's employment
with the Company by reason of his or her death or Disability, this Option may be
exercised for six (6) months after such termination, provided that in no event
shall this Option be exercised later than the Term/Expiration Date set forth in
the Notice of Grant.
3. Grant of Option. The Plan Administrator of the Company hereby grants to
the Optionee named in the Notice of Grant (the "Optionee") an option (the
"Option") to purchase the number of Shares, as set forth in the Notice of Grant,
at the exercise price per share set forth in the Notice of Grant (the "Exercise
Price"), subject to the terms and conditions of the Plan, which is incorporated
herein by reference. Subject to Section 14(c) of the Plan, in the event of a
conflict between the terms and conditions of the Plan and the terms and
conditions of this Option Agreement, the terms and conditions of the Plan shall
prevail.
If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code. However, if this Option is intended to be an Incentive
Stock Option, to the extent that it exceeds the $100,000 rule of Code Section
422(d) it shall be treated as a Nonstatutory Stock Option ("NSO").
4. Exercise of Option.
(a) Right to Exercise. This Option is exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement. In the event of
Optionee's death, disability or other termination of Optionee's employment
relationship, the exercisability of the Option is governed by the applicable
provisions of the Plan and this Option Agreement.
(b) Cessation of Vesting Due to Employee Schedule Change. In the event
an Employee, who is regularly scheduled to work twenty (20) hours or more per
week, voluntarily chooses (i.e., other than for reasons protected by law) to
reduce his or her work schedule with the Company to fewer than twenty (20) hours
per week, the Shares subject to the Option shall cease to vest during the period
of time in which the Employee regularly maintains such a schedule. Shares
subject to the Option shall begin to vest again once the Employee is regularly
scheduled to work twenty (20) hours or more per week. The Administrator shall
make the determination as to when vesting shall cease or begin again. The
Administrator may, in its discretion, permit Shares subject to the Option to
continue to vest during the time that such Employee is regularly scheduled to
work fewer than (20) hours per week.
(c) Method of Exercise. This Option is exercisable by delivery of an
exercise notice (the "Exercise Notice"), which shall state the election to
exercise the Option, the number of Shares in respect of which the Option is
being exercised (the "Exercised Shares"), and such other representations and
agreements as may be required by the Company pursuant to the provisions of the
Plan. The Exercise Notice shall be delivered in person, by mail, via electronic
mail or facsimile or by other authorized method to the Secretary of the Company
or other person designated by the Company. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares. This Option shall be deemed to be exercised upon receipt by the Company
of such fully executed Exercise Notice accompanied by such aggregate Exercise
Price.
No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with all relevant provisions of law
and the requirements of any stock exchange or quotation service upon which the
Shares are then listed. Assuming such compliance, for income tax purposes the
Exercised Shares shall be considered transferred to the Optionee on the date the
Option is exercised with respect to such Exercised Shares.
5. Method of Payment. Payment of the aggregate Exercise Price shall be by
any of the following,
or a combination thereof, at the election of the Optionee:
(a) cash; or
(b) check; or
(c) broker assisted cashless exercise; or
(d) surrender of other Shares which (i) in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than six
(6) months on the date of surrender, and (ii) have a Fair Market Value on the
date of surrender equal to the aggregate Exercise Price of the Exercised Shares;
or
(e) other method authorized by the Company.
6. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of the Plan and this Option Agreement
shall be binding upon the executors, administrators, heirs, successors and
assigns of the Optionee.
7. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.
8. U.S. Tax Consequences. For Optionees subject to U.S. income tax, some
of the federal and California tax consequences relating to this Option, as of
the date of this Option, are set forth below. All other Optionees should consult
a tax advisor for tax consequences relating to this Option in their respective
jurisdiction. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER
BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercising the Option.
(i) Nonstatutory Stock Option. The Optionee may incur regular
federal income tax and California income tax liability upon exercise of a NSO.
The Optionee will be treated as having received compensation income (taxable at
ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Exercised Shares on the date of exercise over their aggregate Exercise
Price. If the Optionee is an Employee or a former Employee, the Company will be
required to withhold from his or her compensation or collect from Optionee and
pay to the applicable taxing authorities an amount in cash equal to a percentage
of this compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.
(ii) Incentive Stock Option. If this Option qualifies as an
ISO, the Optionee will have no regular federal income tax or California income
tax liability upon its exercise, although the excess, if any, of the Fair Market
Value of the Exercised Shares on the date of exercise over their aggregate
Exercise Price will be treated as an adjustment to alternative minimum taxable
income for federal tax purposes and may subject the Optionee to alternative
minimum tax in the year of exercise.
(b) Disposition of Shares.
(i) NSO. If the Optionee holds NSO Shares for at least one
year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.
(ii) ISO. If the Optionee holds ISO Shares for at least one
year after exercise and two years after the grant date, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. If the Optionee disposes of ISO Shares within one year
after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the excess, if any, of the lesser of (A) the difference
between the Fair Market Value of
the Shares acquired on the date of exercise and the aggregate Exercise Price, or
(B) the difference between the sale price of such Shares and the aggregate
Exercise Price.
(c) Notice of Disqualifying Disposition of ISO Shares. If the Optionee
sells or otherwise disposes of any of the Shares acquired pursuant to an ISO on
or before the later of (i) two years after the grant date, or (ii) one year
after the exercise date, the Optionee shall immediately notify the Company in
writing of such disposition. The Optionee agrees that he or she may be subject
to income tax withholding by the Company on the compensation income recognized
from such early disposition of ISO Shares by payment in cash or out of the
current earnings paid to the Optionee.
9. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan, the Notice of Grant, 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 Optionee with respect to the subject matter hereof, and may not be
modified adversely to the Optionee's interest except by means of a writing
signed by the Company and Optionee. This agreement is governed by California law
except for that body of law pertaining to conflict of laws.
10. NO GUARANTEE OF EMPLOYMENT. OPTIONEE UNDERSTANDS AND AGREES THAT HIS
OR HER EMPLOYMENT WITH THE COMPANY OR ITS SUBSIDIARIES IS FOR AN UNSPECIFIED
DURATION AND CONSTITUTES "AT-WILL" EMPLOYMENT. OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING SERVICE AS AN EMPLOYEE AT THE WILL OF THE COMPANY OR ITS
SUBSIDIARY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR
PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET
FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS AN EMPLOYEE FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND
SHALL NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S AND/OR SUBSIDIARY'S
RIGHT TO TERMINATE OPTIONEE'S EMPLOYMENT AT ANY TIME, WITH OR WITHOUT CAUSE.
By your signature and the signature of the Company's representative on the
Notice of Grant, you and the Company agree that this Option is granted under and
governed by the terms and conditions of the Plan, the Notice of Grant, and this
Option Agreement. Optionee has reviewed the Plan, the Notice of Grant, and this
Option Agreement in their entirety, has had an opportunity to obtain the advice
of counsel prior to executing the Notice of Grant, and fully understands all
provisions of the Plan, the Notice of Grant, and Option Agreement. Optionee
hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Administrator upon any questions relating to the Plan,
the Notice of Grant, and the Option Agreement. Optionee further agrees to notify
the Company upon any change in the residence address indicated on the Notice of
Grant.
