Xilinx Inc. and Subsidiaries - Page 9

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              A.   1988 Stock Option Plan                                             
              In 1988, petitioner established the Xilinx 1988 Stock Option            
         Plan (1988 Stock Option Plan).  The 1988 Stock Option Plan                   
         provided for the grant of ISOs and NSOs.  Under the 1988 Stock               
         Option Plan, petitioner granted options as part of the employee              
         hiring process and retention program.  Petitioner also granted               
         merit and discretionary stock options.  Merit options were based             
         on job performance and granted after an employee’s annual review.            
         Discretionary stock options were a separate pool of options made             
         available to petitioner’s vice presidents to reward their                    
         subordinates for significant project achievements.                           
              Under the 1988 Stock Option Plan, former employees generally            
         could exercise options if the exercise occurred within 30 days               
         after the cessation of the employee’s tenure at the company.  In             
         April of 1998, the 1988 Stock Option Plan was replaced by the                
         Xilinx, Inc. 1997 Stock Plan (1997 Stock Option Plan).  The 1997             
         Stock Option Plan provided for the grant of ESPP purchase rights             
         in addition to ISOs and NSOs.                                                
              B.   1990 Employee Qualified Stock Purchase Plan                        
              The Xilinx, Inc. 1990 Employee Qualified Stock Purchase Plan            
         (ESPP) allowed full-time employees to purchase petitioner’s stock            
         at a discount.  Beginning January 1, 1990, the ESPP provided 24-             
         month offering periods which commenced during the beginning of               






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