Exhibit 10.1

 

MICROTUNE, INC.

2000 DIRECTOR OPTION PLAN

(as amended and restated)

 

1. Purposes of the Plan. The purposes of this 2000 Director Option Plan are to
attract and retain the best available personnel for service as Outside Directors
(as defined herein) of the Company, to provide additional incentive to the
Outside Directors of the Company to serve as Directors, and to encourage their
continued service on the Board. All Options granted hereunder shall be
nonstatutory stock options.

 

2. Definitions. As used herein, the following definitions shall apply:

 

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

 

(b) “Code” means the Internal Revenue Code of 1986, as amended.

 

(c) “Common Stock” means the common stock of the Company.

 

(d) “Company” means Microtune, Inc., a Delaware corporation.

 

(e) “Director” means a member of the Board.

 

(f) “Disability” means total and permanent disability as defined in section
22(e)(3) of the Code.

 

(g) “Employee” means any person, including officers and Directors, employed by
the Company or any Parent or Subsidiary of the Company. The payment of a
Director’s fee by the Company shall not be sufficient in and of itself to
constitute “employment” by the Company.

 

(h) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(i) “Fair Market Value” means, as of any date, the value of Common Stock
determined as follows:

 

(i) If the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq National Market
or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value
shall be the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on such exchange or system on the day of determination
as reported in The Wall Street Journal or such other source as the Administrator
deems reliable;

 

(ii) If the Common Stock is regularly quoted by a recognized securities dealer
but selling prices are not reported, the Fair Market Value of a Share of Common
Stock shall be the mean between the high bid and low asked prices for the Common
Stock for the day of determination, as reported in The Wall Street Journal or
such other source as the Board deems reliable; or

 

(iii) In the absence of an established market for the Common Stock, the Fair
Market Value thereof shall be determined in good faith by the Board.

 

(j) “Inside Director” means a Director who is an Employee.

 

(k) “Option” means a stock option granted pursuant to the Plan.

 

(l) “Optioned Stock” means the Common Stock subject to an Option.

 

(m) “Optionee” means a Director who holds an Option.

 

(n) “Outside Director” means a Director who is not an Employee.

 

(o) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.

 

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(p) “Plan” means this 2000 Director Option Plan.

 

(q) “Share” means a share of the Common Stock, as adjusted in accordance with
Section 10 of the Plan.

 

(r) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter
existing, as defined in Section 424(f) of the Internal Revenue Code of 1986.

 

3. Stock Subject to the Plan. Subject to the provisions of Section 10 of the
Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 887,500 Shares. The Shares may be authorized, but unissued, or
reacquired Common Stock. If an Option expires or becomes unexercisable without
having been exercised in full, the unpurchased Shares which were subject thereto
shall become available for future grant or sale under the Plan (unless the Plan
has terminated). Shares that have actually been issued under the Plan shall not
be returned to the Plan and shall not become available for future distribution
under the Plan.

 

4. Administration and Grants of Options under the Plan.

 

(a) Procedure for Grants. All grants of Options to Outside Directors under this
Plan shall be automatic and nondiscretionary and shall be made strictly in
accordance with the following provisions:

 

(i) No person shall have any discretion to select which Outside Directors shall
be granted Options or to determine the number of Shares to be covered by
Options.

 

(ii) Each Outside Director shall be automatically granted an Option to purchase
15,000 Shares (the “First Option”) on the date on which such person first
becomes an Outside Director, whether through election by the shareholders of the
Company or appointment by the Board to fill a vacancy; provided, however, that
an Inside Director who ceases to be an Inside Director but who remains a
Director shall not receive a First Option.

 

(iii) Each Outside Director shall be automatically granted an Option to purchase
24,000 Shares (a “Subsequent Option”) on the date of the Company’s annual
stockholder’s meeting of each year, provided he or she is then an Outside
Director and if as of such date, he or she shall have served on the Board for at
least the preceding six (6) months.

 

(iv) Notwithstanding the provisions of subsections (ii) and (iii) hereof, any
exercise of an Option granted before the Company has obtained shareholder
approval of the Plan in accordance with Section 16 hereof shall be conditioned
upon obtaining such shareholder approval of the Plan in accordance with Section
16 hereof.

 

(v) The terms of a First Option granted hereunder shall be as follows:

 

(A) the term of the First Option shall be ten (10) years.

 

(B) the First Option shall be exercisable only while the Outside Director
remains a Director of the Company, except as set forth in Sections 8 and 10
hereof.

 

(C) the exercise price per Share shall be 100% of the Fair Market Value per
Share on the date of grant of the First Option.

 

(D) subject to Section 10 hereof, the First Option shall become exercisable as
to 33 1/3% of the Shares subject to the First Option on each anniversary of its
date of grant, provided that the Optionee continues to serve as a Director on
such dates.

 

(vi) The terms of a Subsequent Option granted hereunder shall be as follows:

 

(A) the term of the Subsequent Option shall be ten (10) years.

 

(B) the Subsequent Option shall be exercisable only while the Outside Director
remains a Director of the Company, except as set forth in Sections 8 and 10
hereof.

 

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(C) the exercise price per Share shall be 100% of the Fair Market Value per
Share on the date of grant of the Subsequent Option.

 

(D) subject to Section 10 hereof, the Subsequent Option shall become exercisable
as to 33 1/3% of the Shares subject to the Subsequent Option on the first
anniversary of its date of grant, provided that the Optionee continues to serve
as a Director on such dates.

 

(vii) In the event that any Option granted under the Plan would cause the number
of Shares subject to outstanding Options plus the number of Shares previously
purchased under Options to exceed the Pool, then the remaining Shares available
for Option grant shall be granted under Options to the Outside Directors on a
pro rata basis. No further grants shall be made until such time, if any, as
additional Shares become available for grant under the Plan through action of
the Board or the shareholders to increase the number of Shares which may be
issued under the Plan or through cancellation or expiration of Options
previously granted hereunder.

 

5. Eligibility. Options may be granted only to Outside Directors. All Options
shall be automatically granted in accordance with the terms set forth in Section
4 hereof. The Plan shall not confer upon any Optionee any right with respect to
continuation of service as a Director or nomination to serve as a Director, nor
shall it interfere in any way with any rights which the Director or the Company
may have to terminate the Director’s relationship with the Company at any time.

 

6. Term of Plan. The Plan shall become effective upon the earlier to occur of
its adoption by the Board or its approval by the shareholders of the Company as
described in Section 16 of the Plan. It shall continue in effect for a term of
ten (10) years unless sooner terminated under Section 11 of the Plan.

 

7. Form of Consideration. The consideration to be paid for the Shares to be
issued upon exercise of an Option, including the method of payment, shall
consist of (i) cash, (ii) check, (iii) other Shares, provided Shares acquired
directly from the Company, (x) have been owned by the Optionee for more than six
(6) months on the date of surrender, and (y) have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised, (iv) consideration received by the Company
under a cashless exercise program implemented by the Company in connection with
the Plan, or (v) any combination of the foregoing methods of payment.

 

8. Exercise of Option.

 

(a) Procedure for Exercise; Rights as a Shareholder. Any Option granted
hereunder shall be exercisable at such times as are set forth in Section 4
hereof; provided, however, that no Options shall be exercisable until
shareholder approval of the Plan in accordance with Section 16 hereof has been
obtained. An Option may not be exercised for a fraction of a Share. An Option
shall be deemed to be exercised when written notice of such exercise has been
given to the Company in accordance with the terms of the Option by the person
entitled to exercise the Option and full payment for the Shares with respect to
which the Option is exercised has been received by the Company. Full payment may
consist of any consideration and method of payment allowable under Section 7 of
the Plan. Until the issuance (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company) of the
stock certificate evidencing such Shares, no right to vote or receive dividends
or any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. A share certificate for the
number of Shares so acquired shall be issued to the Optionee as soon as
practicable after exercise of the Option. No adjustment shall be made for a
dividend or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 10 of the Plan. Exercise of
an Option in any manner shall result in a decrease in the number of Shares which
thereafter may be available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.

 

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(b) Termination of Continuous Status as a Director. Subject to Section 10
hereof, in the event an Optionee’s status as a Director terminates (other than
upon the Optionee’s death or Disability), the Optionee may exercise his or her
Option, but only within three (3) months following the date of such termination,
and only to the extent that the Optionee was entitled to exercise it on the date
of such termination (but in no event later than the expiration of its ten (10)
year term). To the extent that the Optionee was not entitled to exercise an
Option on the date of such termination, and to the extent that the Optionee does
not exercise such Option (to the extent otherwise so entitled) within the time
specified herein, the Option shall terminate.

 

(c) Disability of Optionee. In the event Optionee’s status as a Director
terminates as a result of Disability, the Optionee may exercise his or her
Option, but only within six (6) months following the date of such termination,
and only to the extent that the Optionee was entitled to exercise it on the date
of such termination (but in no event later than the expiration of its ten (10)
year term). To the extent that the Optionee was not entitled to exercise an
Option on the date of termination, or if he or she does not exercise such Option
(to the extent otherwise so entitled) within the time specified herein, the
Option shall terminate.

 

(d) Death of Optionee. In the event of an Optionee’s death, the Optionee’s
estate or a person who acquired the right to exercise the Option by bequest or
inheritance may exercise the Option, but only within twelve (12) months
following the date of death, and only to the extent that the Optionee was
entitled to exercise it on the date of death (but in no event later than the
expiration of its ten (10) year term). To the extent that the Optionee was not
entitled to exercise an Option on the date of death, and to the extent that the
Optionee’s estate or a person who acquired the right to exercise such Option
does not exercise such Option (to the extent otherwise so entitled) within the
time specified herein, the Option shall terminate.

 

9. Limited Transferability of Options. An Option may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee; provided, however that the
Optionee may transfer, without payment of consideration, the Option to any
member of the Optionee’s immediate family or to a trust or partnership whose
beneficiaries are members of the Optionee’s immediate family. In such case, the
Option shall be exercisable only by such transferee. Following transfer, the
Option shall continue to be subject to the same terms and conditions as were
applicable immediately prior to the transfer. For purposes of this Section, an
Optionee’s “immediate family” shall mean the Optionee’s spouse, children and
grandchildren.”

 

10. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset
Sale.

 

(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of Shares covered by each outstanding
Option, the number of Shares which have been authorized for issuance under the
Plan but as to which no Options have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option, as well as
the price per Share covered by each such outstanding Option, and the number of
Shares issuable pursuant to the automatic grant provisions of Section 4 hereof
shall be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued Shares effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.” Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of Shares
subject to an Option.

 

(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, to the extent that an Option has not been previously
exercised, it shall terminate immediately prior to the consummation of such
proposed action.

 

(c) Merger or Asset Sale. In the event of a merger of the Company with or into
another corporation or the sale of substantially all of the assets of the
Company, outstanding Options may be assumed or equivalent

 

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options may be substituted by the successor corporation or a Parent or
Subsidiary thereof (the “Successor Corporation”). If an Option is assumed or
substituted for, the Option or equivalent option shall continue to be
exercisable as provided in Section 4 hereof for so long as the Optionee serves
as a Director or a director of the Successor Corporation. Following such
assumption or substitution, if the Optionee’s status as a Director or director
of the Successor Corporation, as applicable, is terminated other than upon a
voluntary resignation by the Optionee, the Option or option shall become fully
exercisable, including as to Shares for which it would not otherwise be
exercisable. Thereafter, the Option or option shall remain exercisable in
accordance with Sections 8(b) through (d) above. If the Successor Corporation
does not assume an outstanding Option or substitute for it an equivalent option,
the Option shall become fully vested and exercisable, including as to Shares for
which it would not otherwise be exercisable. In such event the Board shall
notify the Optionee that the Option shall be fully exercisable for a period of
thirty (30) days from the date of such notice, and upon the expiration of such
period the Option shall terminate.

 

For the purposes of this Section 10(c), an Option shall be considered assumed
if, following the merger or sale of assets, the Option confers the right to
purchase or receive, for each Share of Optioned Stock subject to the Option
immediately prior to the merger or sale of assets, the consideration (whether
stock, cash, or other securities or property) received in the merger or sale of
assets by holders of Common Stock for each Share held on the effective date of
the transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding Shares).
If such consideration received in the merger or sale of assets is not solely
common stock of the successor corporation or its Parent, the Administrator may,
with the consent of the successor corporation, provide for the consideration to
be received upon the exercise of the Option, for each Share of Optioned Stock
subject to the Option, to be solely common stock of the successor corporation or
its Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger or sale of assets.

 

11. Amendment and Termination of the Plan.

 

(a) Amendment and Termination. The Board may at any time amend, alter, suspend,
or discontinue the Plan, but no amendment, alteration, suspension, or
discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with any applicable law, regulation
or stock exchange rule, the Company shall obtain shareholder approval of any
Plan amendment in such a manner and to such a degree as required.

 

(b) Effect of Amendment or Termination. Any such amendment or termination of the
Plan shall not affect Options already granted and such Options shall remain in
full force and effect as if this Plan had not been amended or terminated.

 

12. Time of Granting Options. The date of grant of an Option shall, for all
purposes, be the date determined in accordance with Section 4 hereof.

 

13. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to
the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder,
state securities laws, and the requirements of any stock exchange upon which the
Shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

 

As a condition to the exercise of an Option, the Company may require the person
exercising such Option to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares, if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
relevant provisions of law.

 

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Inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be necessary
to the lawful issuance and sale of any Shares hereunder, shall relieve the
Company of any liability in respect of the failure to issue or sell such Shares
as to which such requisite authority shall not have been obtained.

 

14. Reservation of Shares. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

 

15. Option Agreement. Options shall be evidenced by written option agreements in
such form as the Board shall approve.

 

16. Shareholder Approval. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Such shareholder approval shall be obtained in the degree and manner
required under applicable state and federal law and any stock exchange rules.

 

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EXHIBIT A

 

DIRECTOR OPTION EXERCISE NOTICE

 

Microtune, Inc.

2201 Tenth Street

Plano, TX 75074

 

Attention: Corporate Secretary

 

1. Exercise of Option. The undersigned (“Optionee”) hereby elects to exercise
Optionee’s option to purchase              shares of the Common Stock (the
“Shares”) of Microtune, Inc. (the “Company”) under and pursuant to the Company’s
2000 Director Option Plan and the Director Option Agreement dated
                     (the “Agreement”).

 

2. Representations of Optionee. Optionee acknowledges that Optionee has
received, read and understood the Agreement.

 

3. Federal Restrictions on Transfer. Optionee understands that the             
Shares must be held indefinitely unless they are registered under the Securities
Act of 1933, as amended (the “1933 Act”), or unless an exemption from such
registration is available, and that the certificate(s) representing the Shares
may bear a legend to that effect. Optionee understands that the Company is under
no obligation to register the Shares and that an exemption may not be available
or may not permit Optionee to transfer Shares in the amounts or at the times
proposed by Optionee.

 

4. Tax Consequences. Optionee understands that Optionee may suffer adverse tax
consequences as a result of Optionee’s purchase or disposition of the Shares.
Optionee represents that Optionee has consulted with any tax consultant(s)
Optionee deems advisable in connection with the purchase or disposition of the
Shares and that Optionee is not relying on the Company for any tax advice.

 

5. Delivery of Payment. Optionee herewith delivers to the Company the aggregate
purchase price for the Shares that Optionee has elected to purchase and has made
provision for the payment of any federal or state withholding taxes required to
be paid or withheld by the Company.

 

6. Entire Agreement. The Agreement is incorporated herein by reference. This
Exercise Notice and the Agreement constitute the entire agreement of the parties
and supersede in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof. This Exercise
Notice and the Agreement are governed by Texas law except for that body of law
pertaining to conflict of laws.

 

Submitted by:

     

Accepted by:

OPTIONEE: MICROTUNE, INC.

        By:           By:        

Its:

                   

Address:

               

Dated:

         

Dated:

   

 

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FIRST OPTION

MICROTUNE, INC.

DIRECTOR OPTION AGREEMENT

 

Microtune, Inc., (the “Company”), has granted to                      (the
“Optionee”) an option to purchase a total of 15,000 shares of the Company’s
Common Stock (the “Optioned Stock”), at the price determined as provided herein,
and in all respects subject to the terms, definitions and provisions of the
Company’s 2000 Director Option Plan (the “Plan”) adopted by the Company which is
incorporated herein by reference. The terms defined in the Plan shall have the
same defined meanings herein.

 

1. Nature of the Option. This Option is a nonstatutory option and is not
intended to qualify for any special tax benefits to the Optionee.

 

2. Exercise Price. The exercise price is $             for each share of Common
Stock.

 

3. Exercise of Option. This Option shall be exercisable during its term in
accordance with the provisions of Section 8 of the Plan as follows:

 

  (i) Right to Exercise.

 

  (a) This Option shall become exercisable in installments cumulatively with
respect to  1/3 of the Optioned Stock on each anniversary of its date of grant,
so that one hundred percent (100%) of the Optioned Stock shall be exercisable
three years after the date of grant; provided, however, that in no event shall
any Option be exercisable prior to the date the stockholders of the Company
approve the Plan.

 

  (b) This Option may not be exercised for a fraction of a share.

 

  (c) In the event of Optionee’s death, disability or other termination of
service as a Director, the exercisability of the Option is governed by Section 8
of the Plan.

 

  (ii) Method of Exercise. This Option shall be exercisable by written notice
which shall state the election to exercise the Option and the number of Shares
in respect of which the Option is being exercised. Such written notice, in the
form attached hereto as Exhibit A, shall be signed by the Optionee and shall be
delivered in person or by certified mail to the Secretary of the Company. The
written notice shall be accompanied by payment of the exercise price.

 

4. Method of Payment. Payment of the exercise price shall be by any of the
following, or a combination thereof, at the election of the Optionee:

 

  (i) cash;

 

  (ii) check; or

 

  (iii) surrender of other Shares, provided Shares acquired from the Company,
(x) have been owned by the Optionee for more than six (6) months on the date of
surrender, and (y) have a Fair Market Value on the date of surrender equal to
the aggregate exercise price of the Shares as to which said Option shall be
exercised; or

 

  (iv) consideration received by the Company under a cashless exercise program
implemented by the Company in connection with the Plan.

 

5. Restrictions on Exercise. This Option may not be exercised if the issuance of
such Shares upon such exercise or the method of payment of consideration for
such shares would constitute a violation of any applicable federal or state
securities or other law or regulations, or if such issuance would not comply
with the requirements of any stock exchange upon which the Shares may then be
listed. As a condition to the exercise of this Option,

 

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the Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation.

 

6. Limited Transferability of Option. This Option may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee; provided, however, that the
Optionee may transfer, without payment of consideration, the Option to any
member of the Optionee’s immediate family or to a trust or partnership whose
beneficiaries are members of the Optionee’s immediate family by completing an
Election to Transfer Stock Option Form to be obtained from the Company. In such
case, the Option shall be exercisable only by such transferee. Following
transfer, this Option shall continue to be subject to the same terms and
conditions as were applicable immediately prior to the transfer. For purposes of
this Section, an Optionee’s “immediate family” shall mean the Optionee’s spouse,
children and grandchildren.”

 

7. Term of Option. This Option may not be exercised more than ten (10) years
from the date of grant of this Option, and may be exercised during such period
only in accordance with the Plan and the terms of this Option.

 

8. Taxation Upon Exercise of Option. Optionee understands that, upon exercise of
this Option, he or she will recognize income for tax purposes in an amount equal
to the excess of the then Fair Market Value of the Shares purchased over the
exercise price paid for such Shares. Since the Optionee is subject to Section
16(b) of the Securities Exchange Act of 1934, as amended, under certain limited
circumstances the measurement and timing of such income (and the commencement of
any capital gain holding period) may be deferred, and the Optionee is advised to
contact a tax advisor concerning the application of Section 83 in general and
the availability a Section 83(b) election in particular in connection with the
exercise of the Option.

 

DATE OF GRANT:                                     

MICROTUNE, INC., A Delaware corporation

By:    

 

Optionee acknowledges receipt of a copy of the Plan, a copy of which is attached
hereto, and represents that he or she is familiar with the terms and provisions
thereof, and hereby accepts this Option subject to all of the terms and
provisions thereof. Optionee hereby agrees to accept as binding, conclusive and
final all decisions or interpretations of the Board upon any questions arising
under the Plan.

 

Dated:                                              

  

Optionee

 

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SUBSEQUENT OPTION MICROTUNE, INC.

DIRECTOR OPTION AGREEMENT

 

Microtune, Inc., (the “Company”), has granted to                          (the
“Optionee”) an option to purchase a total of 24,000 shares of the Company’s
Common Stock (the “Optioned Stock”), at the price determined as provided herein,
and in all respects subject to the terms, definitions and provisions of the
Company’s 2000 Director Option Plan (the “Plan”) adopted by the Company which is
incorporated herein by reference. The terms defined in the Plan shall have the
same defined meanings herein.

 

1. Nature of the Option. This Option is a nonstatutory option and is not
intended to qualify for any special tax benefits to the Optionee.

 

2. Exercise Price. The exercise price is $             for each share of Common
Stock.

 

3. Exercise of Option. This Option shall be exercisable during its term in
accordance with the provisions of Section 8 of the Plan as follows:

 

  (i) Right to Exercise.

 

  (a) This Option shall become exercisable in installments cumulatively with
respect to 1/3 of the Optioned Stock on each anniversary of its date of grant,
so that one hundred percent (100%) of the Optioned Stock shall be exercisable
three years after the date of grant; provided, however, that in no event shall
any Option be exercisable prior to the date the stockholders of the Company
approve the Plan.

 

  (b) This Option may not be exercised for a fraction of a share.

 

  (c) In the event of Optionee’s death, disability or other termination of
service as a Director, the exercisability of the Option is governed by Section 8
of the Plan.

 

  (ii) Method of Exercise. This Option shall be exercisable by written notice
which shall state the election to exercise the Option and the number of Shares
in respect of which the Option is being exercised. Such written notice, in the
form attached hereto as Exhibit A, shall be signed by the Optionee and shall be
delivered in person or by certified mail to the Secretary of the Company. The
written notice shall be accompanied by payment of the exercise price.

 

4. Method of Payment. Payment of the exercise price shall be by any of the
following, or a combination thereof, at the election of the Optionee:

 

  (i) cash;

 

  (ii) check; or

 

  (iii) surrender of other Shares, provided Shares acquired from the Company,
(x) have been owned by the Optionee for more than six (6) months on the date of
surrender, and (y) have a Fair Market Value on the date of surrender equal to
the aggregate exercise price of the Shares as to which said Option shall be
exercised; or

 

  (iv) consideration received by the Company under a cashless exercise program
implemented by the Company in connection with the Plan.

 

5. Restrictions on Exercise. This Option may not be exercised if the issuance of
such Shares upon such exercise or the method of payment of consideration for
such shares would constitute a violation of any applicable federal or state
securities or other law or regulations, or if such issuance would not comply
with the requirements of any stock exchange upon which the Shares may then be
listed. As a condition to the exercise of this Option, the Company may require
Optionee to make any representation and warranty to the Company as may be
required by any applicable law or regulation.

 

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6. Limited Transferability of Option. This Option may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee; provided, however, that the
Optionee may transfer, without payment of consideration, the Option to any
member of the Optionee’s immediate family or to a trust or partnership whose
beneficiaries are members of the Optionee’s immediate family by completing an
Election to Transfer Stock Option Form to be obtained from the Company. In such
case, the Option shall be exercisable only by such transferee. Following
transfer, this Option shall continue to be subject to the same terms and
conditions as were applicable immediately prior to the transfer. For purposes of
this Section, an Optionee’s “immediate family” shall mean the Optionee’s spouse,
children and grandchildren.”.

 

7. Term of Option. This Option may not be exercised more than ten (10) years
from the date of grant of this Option, and may be exercised during such period
only in accordance with the Plan and the terms of this Option.

 

8. Taxation Upon Exercise of Option. Optionee understands that, upon exercise of
this Option, he or she will recognize income for tax purposes in an amount equal
to the excess of the then Fair Market Value of the Shares purchased over the
exercise price paid for such Shares. Since the Optionee is subject to Section
16(b) of the Securities Exchange Act of 1934, as amended, under certain limited
circumstances the measurement and timing of such income (and the commencement of
any capital gain holding period) may be deferred, and the Optionee is advised to
contact a tax advisor concerning the application of Section 83 in general and
the availability a Section 83(b) election in particular in connection with the
exercise of the Option. Upon a resale of such Shares by the Optionee, any
difference between the sale price and the Fair Market Value of the Shares on the
date of exercise of the Option, to the extent not included in income as
described above, will be treated as capital gain or loss.

 

DATE OF GRANT:                     

MICROTUNE, INC.,

A Delaware corporation

By:    

 

Optionee acknowledges receipt of a copy of the Plan, a copy of which is attached
hereto, and represents that he or she is familiar with the terms and provisions
thereof, and hereby accepts this Option subject to all of the terms and
provisions thereof. Optionee hereby agrees to accept as binding, conclusive and
final all decisions or interpretations of the Board upon any questions arising
under the Plan.

 

Dated:                     

  

Optionee