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   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt"&gt;&lt;b&gt;Note 13 &amp;#8212; Non-Qualified Deferred Compensation Plan&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"&gt;We allow our U.S.-based officers and director-level employees to defer a portion of their
   compensation under the Altera Corporation Non-Qualified Deferred Compensation Plan (&amp;#8220;NQDC Plan&amp;#8221;).
   Our Retirement Plans Committee administers the NQDC Plan. As of July&amp;#160;2, 2010, there were
   approximately 114 participants in the NQDC Plan who self-direct their investments, subject to
   certain limitations. In the event we become insolvent, the NQDC Plan assets are subject to the
   claims of our general creditors. Since the inception of the NQDC Plan, we have not made any
   contributions to the NQDC Plan and we have no commitments to do so in the future. There are no NQDC
   Plan provisions that provide for any guarantees or minimum return on investments. NQDC Plan
   participants are prohibited from investing NQDC Plan contributions in Altera common stock. The
   balance of the NQDC Plan assets and related obligations was $65.1&amp;#160;million and $69.9&amp;#160;million as of
   July&amp;#160;2, 2010 and December&amp;#160;31, 2009, respectively.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"&gt;Investment income or loss earned by the NQDC Plan is recorded as &lt;i&gt;Loss/(gain)on deferred
   compensation plan securities &lt;/i&gt;in our consolidated statements of income. The investment (gain)&amp;#160;loss
   also represents an (increase)&amp;#160;decrease in the future payout to participants and is recorded as
   &lt;i&gt;Compensation (benefit)/expense &amp;#8212; deferred compensation plan &lt;/i&gt;in our consolidated statements of
   income. Compensation expense (benefit)&amp;#160;associated with our NQDC Plan obligations is offset by
   (gain)&amp;#160;loss from related securities. The net effect of investment income or loss and related
   compensation expense or benefit has no impact on our income before income taxes, net income, or
   cash balances.
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