Exhibit 10.4

SEVERANCE AGREEMENT

This SEVERANCE AGREEMENT (this “Agreement”) by and between Microtune, Inc., a
Delaware corporation (the “Company”), and Robert S. Kirk (“Employee”), is made
contingent upon, and effective immediately prior to, the closing (the “Closing”)
of the proposed merger (the “Merger”) of a wholly-owned subsidiary of Zoran
Corporation (“Parent”) with the Company (the date of such Closing, the
“Effective Date”).

Effective immediately prior to the Closing, the parties hereby agree as follows:

1. Revocation of Existing Agreements. All existing agreements and arrangements
between the Company and Employee that provide for or relate to the payment of
cash or other benefits in the event of Employee’s termination of employment with
the Company or any of its Affiliates and/or in connection with a change in
control, including but not limited to the Amended and Restated Severance and
Change of Control Agreement by and between the Company and Employee dated as of
March 4, 2010, are hereby revoked and superseded by this Agreement.

2. Certain Definitions. For the purposes of this Agreement, the following terms
have the meanings set forth below.

(a) “Affiliate” means each entity under common control with the Company and
which, together with the Company, is treated as a single employer under
Section 414(b) of the Code.

(b) “Board” means the Board of Directors of the Company.

(c) “Cause” means the occurrence of any of the following events: (i) Employee is
determined by a court of law or pursuant to arbitration to have committed a
willful act of embezzlement, fraud or dishonesty which resulted in material
loss, material damage or material injury to the Company; (ii) Employee is
convicted of, or pleads nolo contendere to, a felony; or (iii) the failure of
Employee to resolve or otherwise cure any substantial violations of his
employment duties within 30 days after the provision of a written communication
from the Company to Employee that specifically sets forth the factual basis
supporting the Company’s belief that Employee has not substantially performed
his duties. However, Employee shall not be deemed to have been terminated for
Cause pursuant to Section 2(c)(i) or (iii) without (A) reasonable notice to
Employee setting forth the reasons for the Company’s intention to terminate for
Cause and (B) an opportunity for Employee, together with his counsel, if any, to
be heard before the Board.

(d) “Code” means the U.S. Internal Revenue Code of 1986, as amended.

(e) “Disability” means (i) Employee is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, or (ii) Employee is, by
reason of any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits for a period
of not less than three months under an accident and health plan covering
employees of the Company.

 

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(f) “Good Reason” means, without the consent of Employee, the occurrence of any
of the following: (i) a reduction of Employee’s then-current base salary, other
than in connection with a Company-wide reduction that applies to all employees
who are similarly-situated to Employee, (ii) a requirement that Employee be
based at any office or location that is more than 50 miles from Employee’s
then-current primary work location (other than by reason of business-related
travel by Employee that is consistent with the travel obligations of similar
employees holding similar positions with similar responsibilities) or (iii) the
Company’s demotion of Employee which results in any reduction in Employee’s
grade level as in effect immediately following Closing under Parent’s
organization structure. In the case of Employee’s allegation of Good Reason,
(A) Employee shall provide notice to the Company of the event alleged to
constitute Good Reason within 90 days of the occurrence of such event, and
(B) the Company shall have the opportunity to remedy the alleged Good Reason
event within 30 days from receipt of notice of such allegation.

(g) “Section 409A” means Section 409A of the Code and guidance promulgated
thereunder.

(h) “Separation from Service” has the meaning set forth in Section 3.

3. Severance Benefits.

(a) Termination without Cause, for Good Reason or Due to Death or Disability.

(i) If (A) the Company terminates Employee’s employment with the Company or any
of its Affiliates for any reason other than for Cause, (B) Employee terminates
his employment with the Company or any of its Affiliates for Good Reason within
120 days of the initial existence of the circumstance giving rise to the Good
Reason, or (C) Employee’s employment with the Company or any of its Affiliates
is terminated due to his death or Disability, in any case, prior to the date
that is 12 calendar months following the Effective Date, the Company shall
provide the following severance benefits to Employee following his “separation
from service,” within the meaning of Section 409A, with the Company and/or such
Affiliate (“Separation from Service”), as applicable:

(1) Within 10 business days of Employee’s Separation from Service, the Company
will pay Employee a cash lump sum payment, which payment shall be made in U.S.
currency, in the amount of $509,689.

(2) On the first May 15th that occurs after the date of Employee’s Separation
from Service, the Company shall pay to Employee a cash lump-sum payment in an
amount equal to $40,880.

(3) For a period of 12 months commencing one calendar day following the date
upon which Employee incurs a Separation from Service, the Company shall pay
COBRA premiums for Employee and any dependents covered under the Company’s group
health plan immediately prior to such Separation from Service,

 

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provided that (A) Employee makes a timely election for COBRA continuation
coverage and (B) the Company may cease making such premium payments when
Employee secures other employment and becomes eligible to participate in the
health insurance plan of Employee’s new employer. Notwithstanding the previous
sentence, if the Company determines in its sole discretion that it cannot
provide the foregoing benefit without potentially violating applicable law
(including, without limitation, Section 2716 of the Public Health Service Act),
the Company shall in lieu thereof provide to Employee a taxable monthly payment
in an amount equal to the monthly COBRA premium that Employee would be required
to pay to continue his group health coverage in effect on the date of his
Separation from Service (which amount shall be based on the premium for the
first month of COBRA coverage), which payments shall be made regardless of
whether Employee elects COBRA continuation coverage and shall commence in the
month following the month in which Employee incurs a Separation from Service and
shall end on the earlier of (x) the date upon which Employee obtains other
employment or (y) the last day of the 12th calendar month following the month in
which Employee incurs a Separation from Service.

(4) If Employee incurs a Separation from Service pursuant to this Section
3(a)(i) prior to the date upon which the Company pays bonuses to participants
under its 2010 Incentive Compensation Program, on the date of such payment
Employee shall receive the same annual bonus that Employee would have been
entitled to receive under the program if Employee had remained employed on such
date.

(ii) If (A) the Company terminates Employee’s employment with the Company or any
of its Affiliates for any reason other than for Cause, (B) Employee terminates
his employment with the Company or any of its Affiliates for Good Reason within
120 days of the initial existence of the circumstance giving rise to the Good
Reason, or (C) Employee’s employment with the Company or any of its Affiliates
is terminated due to his death or Disability, in any case, at any time during
the period commencing on the date that is 12 calendar months following the
Effective Date and ending on the day immediately prior to the date that is 24
calendar months following the Effective Date, the Company shall provide the
following benefits to Employee following his Separation from Service, as
applicable:

(1) Within 10 business days of Employee’s Separation from Service, the Company
will pay Employee a cash lump sum payment, which payment shall be made in U.S.
currency, in the amount of $254,845.

(2) If Employee’s Separation from Service occurs during the period beginning on
December 15 and ending on May 15 (the “Protection Period”), the Company shall
pay to Employee a cash lump-sum payment on the last day of the Protection Period
in an amount equal to $40,880.

(3) For a period of 6 months commencing one calendar day following the date upon
which Employee incurs a Separation from Service, the Company shall pay COBRA
premiums for Employee and any dependents covered under the Company’s group
health plan immediately prior to such Separation from Service, provided that
(A) Employee makes a timely election for COBRA continuation coverage and (B) the
Company may cease making such premium payments when Employee

 

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secures other employment and becomes eligible to participate in the health
insurance plan of Employee’s new employer. Notwithstanding the previous
sentence, if the Company determines in its sole discretion that it cannot
provide the foregoing benefit without potentially violating applicable law
(including, without limitation, Section 2716 of the Public Health Service Act),
the Company shall in lieu thereof provide to Employee a taxable monthly payment
in an amount equal to the monthly COBRA premium that Employee would be required
to pay to continue his group health coverage in effect on the date of his
Separation from Service (which amount shall be based on the premium for the
first month of COBRA coverage), which payments shall be made regardless of
whether Employee elects COBRA continuation coverage and shall commence in the
month following the month in which Employee incurs a Separation from Service and
shall end on the earlier of (x) the date upon which Employee obtains other
employment or (y) the last day of the 6th calendar month following the month in
which Employee incurs a Separation from Service.

(b) Other Terminations of Employment. In the event that Employee’s employment
with the Company or any of its Affiliates terminates for any reason other than
as described in Section 3(a), Employee shall not be entitled to receive any
severance benefits or other payments from the Company or any of its Affiliates
other than as required by applicable law. For the avoidance of doubt, Employee
shall make no claim for any compensation pursuant to this Agreement in the event
of his termination of employment with the Company or any of its Affiliates that
is not expressly described in this Section 3.

4. Compliance with Section 409A. To the extent applicable, this Agreement is
intended to comply with Section 409A and shall be administered and construed in
a manner consistent with this intent. In furtherance of the foregoing,
notwithstanding anything herein to the contrary, if Employee is a “specified
employee” (determined by the Company in accordance with U.S. Treasury Regulation
section 1.409A-3(i)(2)) as of the date that Employee incurs a Separation from
Service and if any benefit to be provided under this Agreement cannot be paid or
provided in a manner otherwise provided herein without subjecting Employee to
additional tax, interest and/or penalties under Section 409A, then any such
benefit that is payable during the first 6 months following Employee’s
Separation from Service shall be paid to Employee in a cash lump payment to be
made on the first day of the seventh month following Employee’s Separation from
Service.

5. Successors; Binding Agreement. This Agreement shall inure to the benefit of
and be binding upon the successors of the Company (including, without
limitation, the Parent).

6. Miscellaneous.

(a) Notices. Any notice, report or other communication required or permitted to
be given hereunder shall be in writing to both parties and shall be deemed given
on the date of delivery, if delivered, or three days after mailing, if mailed
first-class mail, postage prepaid, to the following addresses:

(i) If to Employee, at the address last provided by Employee to Company.

 

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(ii) If to the Company, the following address, or to such other address as any
party hereto may designate by notice given as herein provided:

Microtune, Inc.

2201 10th Street

Plano, Texas 75074

Attention: General Counsel

(b) Withholding. All benefits that become payable pursuant to this Agreement
shall be subject to withholding for applicable taxes and as otherwise required
by law.

(c) Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Texas without regard to the
conflicts of law principles thereof.

(d) Amendments. This Agreement shall not be changed or modified in whole or in
part except by an instrument in writing signed by each party hereto.

(e) Counterparts. This Agreement may be executed in several counterparts, each
of which shall be an original, but all of which together shall constitute one
and the same agreement.

(f) Effect of Headings. The section headings herein are for convenience only and
shall not affect the construction or interpretation of this Agreement.

(g) Conflicting Terms. In the event that words or terms of this Agreement
conflict with the words or terms of any other agreement or contract, including,
without limitation, any stock plan, notice of grant, or restricted stock
purchase agreement or option agreement entered into in connection with the
employment of Employee by the Company, the interpretation of this Agreement
shall prevail.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

 

MICROTUNE, INC.

 

By:

 

/s/ James A. Fontaine

 

 Name:

  James A. Fontaine

 

 Title:

  Chief Executive Officer

 

 

EMPLOYEE

 

/s/ Robert S. Kirk

 

Robert S. Kirk

 

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