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                             1996 STOCK OPTION PLAN
                                       OF
                        AMATI COMMUNICATIONS CORPORATION


           1.  PURPOSES OF THE PLAN.  The purposes of the 1996 Stock Option Plan
(the "Plan") of Amati Communications Corporation, a Delaware corporation (the
"Company"), are to:

               (a)  Encourage selected employees, directors and consultants to
improve operations and increase profits of the Company;

               (b)  Encourage selected employees, directors and consultants to
accept or continue employment or association with the Company or its Affiliates;
and

               (c)  Increase the interest of selected employees, directors and
consultants in the Company's welfare through participation in the growth in
value of the common stock of the Company (the "Common Stock").

          Options granted under this Plan ("Options") may be "incentive stock
options" ("ISOs") intended to satisfy the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or "nonqualified
options" ("NQOs").

           2.  ELIGIBLE PERSONS.  Every person who at the date of grant of an
Option is a full-time employee of the Company or of any Affiliate (as defined
below) of the Company is eligible to receive NQOs or ISOs under this Plan. 
Every person who at the date of grant is a consultant to, or non-employee
director of, the Company or any Affiliate (as defined below) of the Company is
eligible to receive NQOs under this Plan.  The term "Affiliate" as used in the
Plan means a parent or subsidiary corporation as defined in the applicable
provisions (currently Sections 424(e) and (f), respectively) of the Code.  The
term "employee" includes an officer or director who is an employee, of the
Company.  The term "consultant" includes persons employed by, or otherwise
affiliated with, a consultant.

           3.  STOCK SUBJECT TO THIS PLAN.  Subject to the provisions of
Section 6.1.1 of the Plan, the total number of shares of stock which may be
issued under options granted pursuant to this Plan shall not exceed 1,000,000
shares of Common Stock.  The shares covered by the portion of any grant under
the Plan which expires unexercised shall become available again for grants under
the Plan.

           4.  ADMINISTRATION.

               4.1  GENERAL.  This Plan shall be administered by the Board of
Directors of the Company (the "Board") or, either in its entirety or as
permitted pursuant to Section 4.2 hereof, by a 


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committee to which administration of the Plan, or of part of the Plan, is 
delegated (in either case, the "Administrator").

               4.2  COMMITTEE OF THE BOARD.  Subject to the discretion of the
Board, this Plan may be administered by a committee (the "Committee") of at
least two Board members each of whom are a "Non-Employee Director" as defined
under Rule 16b-3 promulgated by the Securities and Exchange Commission 
("Rule 16b-3") under the Securities Exchange Act of 1934, as amended (the 
"Exchange Act"), or any successor rule thereto.

               4.3  AUTHORITY OF ADMINISTRATOR.  Subject to the other 
provisions of this Plan, the Administrator shall have the authority, in its 
discretion: (i) to grant Options; (ii) to determine the fair market value of 
the Common Stock subject to Options; (iii) to determine the exercise price of 
Options granted; (iv) to determine the persons to whom, and the time or times 
at which, Options shall be granted, and the number of shares subject to each 
Option; (v) to interpret this Plan; (vi) to prescribe, amend, and rescind 
rules and regulations relating to this Plan; (vii) to determine the terms and 
provisions of each Option granted (which need not be identical), including 
but not limited to, the time or times at which Options shall be exercisable; 
(viii) with the consent of the optionee, to modify or amend any Option; 
(ix) to authorize any person to execute on behalf of the Company any instrument 
evidencing the grant of an Option; and (x) to make all other determinations 
deemed necessary or advisable for the administration of this Plan.  The 
Administrator may delegate nondiscretionary administrative duties to such 
employees of the Company as it deems proper.

               4.4  INTERPRETATION BY ADMINISTRATOR.  All questions of
interpretation, implementation, and application of this Plan shall be determined
by the Administrator.  Such determinations shall be final and binding on all
persons.

               4.5  RULE 16b-3.  With respect to persons subject to Section 16
of the Exchange Act, if any, transactions under this Plan are intended to comply
with the applicable conditions of Rule 16b-3, or any successor rule thereto.  To
the extent any provision of this Plan or action by the Administrator fails to so
comply, it shall be deemed modified to the extent necessary to comply with 
Rule 16b-3, to the extent permitted by law and deemed advisable by the 
Administrator. Notwithstanding the above, it shall be the responsibility of such
persons, not of the Company or the Administrator, to comply with the 
requirements of Section 16 of the Exchange Act, and neither the Company nor the 
Administrator shall be liable if this Plan or any transaction under this Plan 
fails to comply with the applicable conditions of Rule 16b-3 or any successor 
rule thereto, or if any such person incurs any liability under Section 16 of the
Exchange Act.

           5.  GRANTING OF OPTIONS; OPTION AGREEMENT.  No Options shall be
granted under this Plan after ten years from the date of


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adoption of this Plan by the Board.  Each Option shall be evidenced by a 
written stock option agreement, in form satisfactory to the Company, executed 
by the Company and the person to whom such Option is granted; PROVIDED, 
HOWEVER, that the failure by the Company, the optionee, or both to execute 
such an agreement shall not invalidate the granting of an Option, although 
the exercise of each option shall be subject to Section 6.1.3.  The stock 
option agreement shall specify whether each Option it evidences is a NQO or 
an ISO.  Subject to Section 6.3.3 with respect to ISOs, the Administrator may 
approve the grant of Options under this Plan to persons who are expected to 
become employees, directors or consultants of the Company, but are not 
employees, directors or consultants at the date of approval.

           6.  TERMS AND CONDITIONS OF OPTIONS.  Each Option granted under this
Plan shall be subject to the terms and conditions set forth in Section 6.1. 
NQOs shall be also subject to the terms and conditions set forth in Section 6.2,
but not those set forth in Section 6.3.  ISOs shall also be subject to the terms
and conditions set forth in Section 6.3, but not those set forth in Section 6.2.

               6.1  TERMS AND CONDITIONS TO WHICH ALL OPTIONS ARE SUBJECT.  All
Options granted under this Plan shall be subject to the following terms and
conditions:

                    6.1.1  CHANGES IN CAPITAL STRUCTURE.  Subject to
Section 6.1.2, if the stock of the Company is changed by reason of a stock
split, reverse stock split, stock dividend, or recapitalization, combination or
reclassification, appropriate adjustments shall be made by the Board in (a) the
number and class of shares of stock subject to this Plan and each Option
outstanding under this Plan, and (b) the exercise price of each outstanding
Option; PROVIDED, HOWEVER, that the Company shall not be required to issue
fractional shares as a result of any such adjustments.  Each such adjustment
shall be subject to approval by the Board in its sole discretion.

                    6.1.2  CORPORATE TRANSACTIONS.  In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
optionee at least 30 days prior to such proposed action.  To the extent not
previously exercised, all Options will terminate immediately prior to the
consummation of such proposed action.  In the event of a merger or consolidation
of the Company with or into another corporation or entity in which the Company
does not survive, or in the event of a sale of all or substantially all of the
assets of the Company in which the stockholders of the Company receive
securities of the acquiring entity or an affiliate thereof, all Options shall be
assumed or equivalent options shall be substituted by the successor corporation
(or other entity) or a parent or subsidiary of such successor corporation (or
other entity).  If such successor does not agree to assume the Options or to
substitute


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equivalent options therefor, unless the Administrator shall determine 
otherwise, the Options will expire upon such event.

                    6.1.3  TIME OF OPTION EXERCISE.  Subject to Section 5 and
Section 6.3.4, Options granted under this Plan shall be exercisable in
accordance with a schedule related to the date of the grant of the Option, the
date of first employment, or such other date as may be set by the Administrator
(in any case, the "Vesting Base Date") and specified in the written stock option
agreement relating to such Option; PROVIDED, HOWEVER, that unless otherwise
specifically determined by the Administrator, the right to exercise an Option
shall vest at the rate of 25% per year over four years from the date the option
was granted.  In any case, no Option shall be exercisable until a written stock
option agreement in form satisfactory to the Company is executed by the Company
and the optionee.

                    6.1.4  OPTION GRANT DATE.  Except in the case of advance
approvals described in Section 5, the date of grant of an Option under this Plan
shall be the date as of which the Administrator approves the grant.

                    6.1.5  NONASSIGNABILITY OF OPTION RIGHTS.  Unless otherwise
specifically determined by the Administrator, no Option granted under this Plan
shall be assignable or otherwise transferable by the optionee except by will or
by the laws of descent and distribution, and during the life of the optionee, an
Option shall be exercisable only by the optionee.

                    6.1.6  PAYMENT.  Except as provided below, payment in full,
in cash, shall be made for all stock purchased at the time written notice of
exercise of an Option is given to the Company, and proceeds of any payment shall
constitute general funds of the Company.  At the time an Option is granted or
exercised, the Administrator, in the exercise of its absolute discretion after
considering any tax or accounting consequences, may authorize any one or more of
the following additional methods of payment:

                         (a)  Acceptance of the optionee's promissory note for
all or part of the Option price, payable on such terms and bearing such interest
rate as determined by the Administrator (but in no event less than the minimum
interest rate specified under the Code at which no additional interest would be
imputed), which promissory note may be either secured or unsecured in such
manner as the Administrator shall approve (including, without limitation, by a
security interest in the shares of the Company); and

                         (b)  Delivery by the optionee of Common Stock already
owned by the optionee (or having Common Stock which is acquired on exercise of
the Option withheld by the Company) for all or part of the Option price,
provided the value (determined as set forth in Section 6.1.11) of such Common
Stock


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is equal on the date of exercise to the Option price, or such portion thereof 
as the optionee is authorized to pay by delivery of such stock; PROVIDED, 
HOWEVER, that if an optionee has exercised any portion of any Option granted 
by the Company by delivery or withholding of Common Stock, the optionee may 
not, within six months following such exercise, exercise any Option granted 
under this Plan by delivery or withholding of Common Stock without the 
consent of the Administrator.

                    6.1.7  TERMINATION OF EMPLOYMENT. If for any reason other
than death or disability, an optionee ceases to be employed by or to serve as a
consultant to the Company or any of its Affiliates (such event being called a
"Termination"), Options held at the date of Termination (to the extent then
exercisable) may be exercised in whole or in part at any time within three
months of the date of such Termination, or such other period of not less than
thirty days after the date of such Termination as is specified in the Option
Agreement (but in no event after the Expiration Date); PROVIDED, that if such
exercise of the Option would result in liability for the optionee under
Section 16(b) of the Exchange Act, then such three-month period automatically
shall be extended until the tenth day following the last date upon which
optionee has any liability under Section 16(b) (but in no event after the
Expiration Date).  If an optionee dies or becomes disabled (within the meaning
of Section 22(c)(3) of the Code) while employed by or serving as a consultant to
the Company or an Affiliate or within the period that the Option remains
exercisable after Termination, Options then held (to the extent then
exercisable) may be exercised, in whole or in part, by the optionee, by the
optionee's personal representative or by the person to whom the Option is
transferred by devise or the laws of descent and distribution, for such period
of up to twelve months after the death, or eighteen months after the permanent
and total disability, of the optionee, as is specified in the Option Agreement
(but in no event after the Expiration Date).  For purposes of this
Section 6.1.7, "employment" includes service as a director or as a consultant. 
For purposes of this Section 6.1.7, an optionee's employment shall not be deemed
to terminate by reason of sick leave, military leave or other leave of absence
approved by the Administrator, if the period of any such leave does not exceed
90 days or, if longer, if the optionee's right to reemployment by the Company or
any Affiliate is guaranteed either contractually or by statute.

                    6.1.8  REPURCHASE OF STOCK.  At the option of the
Administrator, the stock to be delivered pursuant to the exercise of any Option
granted to an employee, director or consultant under this Plan may be subject to
a right of repurchase in favor of the Company with respect to any employee, or
director or consultant whose employment, or director or consulting relationship
with the Company is terminated.  Such right of repurchase shall be at the Option
exercise price and, unless otherwise determined by the Administrator, (i) shall
lapse at the rate of 25% per year over four years from the date the


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Option is granted (without regard to the date it becomes exercisable), and 
must be exercised for cash or cancellation of purchase money indebtedness 
within 90 days of such termination.

          Determination of the number of shares subject to any such right of
repurchase shall be made as of the date the employee's employment by, director's
director relationship with, or consultant's consulting relationship with, the
Company terminates, not as of the date that any Option granted to such employee,
director or consultant is thereafter exercised.

                    6.1.9  WITHHOLDING AND EMPLOYMENT TAXES.  At the time of
exercise of an Option or at such other time as the amount of such obligations
becomes determinable (the "Tax Date"), the optionee shall remit to the Company
in cash all applicable federal and state withholding and employment taxes.  If
authorized by the Administrator in its sole discretion after considering any tax
or accounting consequences, an optionee may elect to (a) deliver a promissory
note on such terms as the Administrator deems appropriate, (b) tender to the
Company previously owned shares of Common Stock or other securities of the 
Company, or (c) have shares of Common Stock which are acquired upon exercise of 
the Option withheld by the Company to pay some or all of the amount of tax that 
is required by law to be withheld by the Company as a result of the exercise of 
such Option.

          Limitations on the foregoing may be imposed by the Administrator, in
its sole discretion, if the Administrator determines that such limitations are
required in order that the transaction shall be exempt from Section 16(b) of the
Exchange Act pursuant to Rule 16b-3, or any successor rule thereto.  Any
securities tendered or withheld in accordance with this Section 6.1.9 shall be
valued by the Company as of the Tax Date.

                    6.1.10  OTHER PROVISIONS.  Each Option granted under this
Plan may contain such other terms, provisions, and conditions not inconsistent
with this Plan as may be determined by the Administrator, and each ISO granted
under this Plan shall include such provisions and conditions as are necessary to
qualify the Option as an "incentive stock option" within the meaning of
Section 422 of the Code.

                    6.1.11  DETERMINATION OF VALUE.  For purposes of the Plan,
the value of Common Stock or other securities of the Company shall be determined
as follows:

                         (a)  If the stock of the Company is listed on any
established stock exchange or a national market system, including without
limitation the National Market System of the National Association of Securities
Dealers, Inc. Automated Quotation System, 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 system or exchange (or the largest


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such exchange) for the date the value is to be determined (or if there are no 
sales for such date, then for the last preceding business day on which there 
were sales), as reported in the WALL STREET JOURNAL or similar publication.

                         (b)  If the stock of the Company is regularly quoted by
a recognized securities dealer but selling prices are not reported, its fair
market value shall be the mean between the high bid and low asked prices for the
stock on the date the value is to be determined (or if there are no quoted
prices for the date of grant, then for the last preceding business day on which
there were quoted prices).

                         (c)  In the absence of an established market for the
stock, the fair market value thereof shall be determined in good faith by the
Administrator, with reference to the Company's net worth, prospective earning
power, dividend-paying capacity, and other relevant factors, including the
goodwill of the Company, the economic outlook in the Company's industry, the
Company's position in the industry and its management, and the values of stock
of other corporations in the same or a similar line of business.

                    6.1.12  OPTION TERM.  No ISO shall be exercisable more than
ten years after the date of grant, or such lesser period of time as is set forth
in the stock option agreement (the end of the maximum exercise period stated in
the stock option agreement is referred to in this Plan as the "Expiration
Date").

                    6.1.13  EXERCISE PRICE.  The exercise price of any Option
granted to any person who owns, directly or by attribution under the Code
currently Section 424(d), stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or of any Affiliate
(a "Ten Percent Stockholder") shall in no event be less than 110% of the fair
market value (determined in accordance with Section 6.1.11) of the stock covered
by the Option at the time the Option is granted.

               6.2  TERMS AND CONDITIONS TO WHICH ONLY NQOS ARE SUBJECT.  Except
as set forth in Section 6.1.13, the exercise price of a NQO shall be not less
than 85% of the fair market value (determined in accordance with Section 6.1.11)
of the stock subject to the Option on the date of grant.

               6.3  TERMS AND CONDITIONS TO WHICH ONLY ISOS ARE SUBJECT. 
Options granted under this Plan which are designated as ISOs shall be subject to
the following terms and conditions:

                    6.3.1  EXERCISE PRICE.  Except as set forth in
Section 6.1.13, the exercise price of an ISO shall be determined in accordance
with the applicable provisions of the Code and shall in no event be less than
the fair market value


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(determined in accordance with Section 6.1.11) of the stock covered by the 
Option at the time the Option is granted.

                    6.3.2  DISQUALIFYING DISPOSITIONS.  If stock acquired by
exercise of an ISO granted pursuant to this Plan is disposed of in a
"disqualifying disposition" within the meaning of Section 422 of the Code, the
holder of the stock immediately before the disposition shall promptly notify the
Company in writing of the date and terms of the disposition and shall provide
such other information regarding the Option as the Company may reasonably
require.

                    6.3.3  GRANT DATE.  If an ISO is granted in anticipation of
employment as provided in Section 5, the Option shall be deemed granted, without
further approval, on the date the grantee assumes the employment relationship
forming the basis for such grant, and, in addition, satisfies all requirements
of this Plan for Options granted on that date.

                    6.3.4  VESTING.  Notwithstanding any other provision of this
Plan, ISOs granted under all incentive stock option plans of the Company and its
subsidiaries may not "vest" for more than $100,000 in fair market value of stock
(measured on the grant dates(s)) in any calendar year.  For purposes of the
preceding sentence, an option "vests" when it first becomes exercisable.  If, by
their terms, such ISOs taken together would vest to a greater extent in a
calendar year, and unless otherwise provided by the Administrator, ISOs with
lower exercise prices shall vest before ISOs with higher exercise prices,
regardless of the grant date.

                    6.3.5  TERM.  Notwithstanding Section 6.1.12, no ISO granted
to any Ten Percent Stockholder shall be exercisable more than five years after
the date of grant.

           7.  MANNER OF EXERCISE.  An optionee wishing to exercise an Option
shall give written notice to the Company at its principal executive office, to
the attention of the officer of the Company designated by the Administrator,
accompanied by payment of the exercise price as provided in Section 6.1.6.  The
date the Company receives written notice of an exercise hereunder accompanied by
payment of the exercise price will be considered as the date such Option was
exercised.  Promptly after receipt of written notice of exercise of an Option,
the Company shall, without stock issue or transfer taxes to the optionee or
other person entitled to exercise the Option, deliver to the optionee or such
other person a certificate or certificates for the requisite number of shares of
stock.  An optionee or permitted transferee of an optionee shall not have any
privileges as a stockholder with respect to any shares of stock covered by the
Option until the date of issuance (as evidenced by the appropriate entry on the
books of the Company or a duly authorized transfer agent) of such shares.


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           8.  EMPLOYMENT OR CONSULTING RELATIONSHIP.  Nothing in this Plan or
any Option granted thereunder shall interfere with or limit in any way the right
of the Company or of any of its Affiliates to terminate any optionee's
employment or consulting at any time, nor confer upon any optionee any right to
continue in the employ of, or consult with, the Company or any of its
Affiliates.

           9.  FINANCIAL INFORMATION.  The Company shall provide to each
optionee during the period such optionee holds an outstanding Option, and to
each holder of Common Stock acquired upon exercise of Options granted under the
Plan for so long as such person is a holder of such Common Stock, annual
financial statements of the Company as prepared either by the Company or
independent certified public accountants of the Company.  Such financial
statements shall include, at a minimum, a balance sheet and an income statement,
and shall be delivered as soon as practicable following the end of the Company's
fiscal year.

          10.  CONDITIONS UPON ISSUANCE OF SHARES.  Shares of Common Stock 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 "Securities Act").

          11.  NONEXCLUSIVITY OF THE PLAN.  The adoption of the Plan shall not
be construed as creating any limitations on the power of the Company to adopt
such other incentive arrangements as it may deem desirable, including, without
limitation, the granting of stock options other than under the Plan.

          12.  MARKET STANDOFF.  Each Optionee, if so requested by the Company
or any representative of the underwriters in connection with any registration of
the offering of any securities of the Company under the Securities Act shall not
sell or otherwise transfer any shares of Common Stock acquired upon exercise of
Options during such period following the effective date of a registration
statement of the Company filed under the Securities Act as is agreed upon
between the Company and such representative(s); PROVIDED, HOWEVER, that such
restriction shall apply only to the first two registration statements of the
Company to become effective under the Securities Act which includes securities
to be sold on behalf of the Company to the public in an underwritten public
offering under the Securities Act.  The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restriction
until the end of such period.

          13.  AMENDMENTS TO PLAN.  The Board may at any time amend, alter,
suspend or discontinue this Plan.  Without the consent of an optionee, no
amendment, alteration, suspension or discontinuance may adversely affect
outstanding Options except to conform this Plan and ISOs granted under this Plan
to the


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requirements of federal or other tax laws relating to incentive stock options. 
No amendment, alteration, suspension or discontinuance shall require 
stockholder approval unless (a) stockholder approval is required to preserve 
incentive stock option treatment for federal income tax purposes, or (b) the 
Board otherwise concludes that stockholder approval is advisable.

          14.  EFFECTIVE DATE OF PLAN.  This Plan shall become effective upon
adoption by the Board; PROVIDED, HOWEVER, that no ISO shall be exercisable
unless and until written consent of the stockholders of the Company, or approval
of stockholders of the Company voting at a validly called stockholders' meeting,
is obtained within 12 months after adoption by the Board. If such stockholder
approval is not obtained within such time, ISOs granted hereunder shall
terminate and be of no force and effect from and after expiration of such 12-
month period although any NQO granted shall remain in full force and effect. 
The Plan shall terminate ten years after adoption by the Board unless terminated
earlier by the Board.

Plan adopted by the Board of Directors on July 12, 1996.

Plan approved by Stockholders on _______________, 1996.






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