Exhibit 10.1

July 12, 2007

Mr. Bahram Ghaderi

Dear Bahram:

This letter sets forth the substance of your voluntary termination from Exar
Corporation (the “Company”) in consideration of certain compensation and
benefits described below:

 

1. General

Effective July 12, 2007 (the “Termination Date”), you will resign as Vice
President, Engineering and Product Development and your employment with the
Company will end on that date.

 

2. Employment Benefits

 

  (a) The Company will pay for your COBRA benefits from July 13, 2007 through
December 31, 2007.

 

  (b) The COBRA benefits are limited to medical, dental and vision for you and
your eligible dependents.

 

3. Compensation

 

  (a) Base Salary. In addition to your regular pay and accrued vacation through
your Termination Date, you will receive a one-time payment of twenty (20) weeks
of your base pay, amounting to $94,000.00, subject to any applicable withholding
taxes.

 

  (b) Stock Options. Any stock options or other stock awards that are vested as
of your Termination Date may be exercised no later than three (3) months after
your Termination Date, October 12, 2007.

 

  (c) Other Compensation or Benefits. You acknowledge that, except as expressly
provided in this Agreement, you will not receive from the Company any additional
compensation (including, but not limited to salary or bonuses, severance, stock,
stock options, or other benefits) after the Termination Date.

 

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4. Expense Reimbursements

You agree that, within ten (10) business days of the Termination Date, you will
submit your final documented expense reimbursement statement reflecting all
business expenses you incurred through the Termination Date, if any, for which
you seek reimbursement. The Company will reimburse you for these expenses
pursuant to its regular business practice. Pursuant to its regular business
practice, the Company will reimburse you for documented business expenses
incurred during the employment term, provided that these expenses have been
pre-approved by the President and CEO in writing.

 

5. Return of Company Property

On the Termination Date, you agree to return to the Company all Company
documents (and all copies thereof) and other Company property that you have had
in your possession at any time, including, but not limited to, Company files,
notes, drawings, records, business plans and forecasts, financial information,
specifications, training materials, computer-recorded information, tangible
property including, but not limited to, computers, credit cards, entry cards,
identification badges and keys, and any materials of any kind that contain or
embody any proprietary or confidential information of the Company (and all
reproductions thereof).

 

6. Proprietary Information Obligations

You acknowledge your continuing obligations under your Proprietary Rights and
Non-Disclosure Agreement attached hereto as Exhibit A. You agree not to use or
disclose any confidential or proprietary information of the Company without
prior written authorization form a duly authorized representative of the
Company.

 

7. Non Solicitation

You agree that for one (1) year following the Termination Date you will not,
either directly or through others, (i) solicit or attempt to solicit any
employee, consultant, or independent contractor of the Company in order to
become an employee consultant or independent contractor to or for any other
person or entity, or (ii) solicit business from any of the Company’s or any of
its subsidiaries’ customers and users on behalf of any business that directly
competes with the Company or any of its subsidiaries.

 

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8. Confidentiality

The provisions of this Agreement will be held in strictest confidence by you and
the Company and will not be publicized or disclosed in any manner whatsoever;
provided, however, that (a) you may disclose this Agreement to your immediate
family; (b) the parties may disclose this Agreement in confidence to their
respective attorneys, accountants, auditors, tax prepares, and financial
advisors; (c) the Company may disclose this Agreement as necessary to fulfill
standard or legally required corporate reporting or disclosure requirements; and
(d) the parties may disclose this Agreement insofar as such disclosure may be
necessary to enforce its terms or as otherwise required by law. In particular,
and without limitation, you will not disclose the provisions of this Agreement
to any current or former Company employee or any other Company personnel.

 

9. Release of Claims

In exchange for the consideration under this Agreement to which you would not
otherwise be entitled, you on behalf of yourself and your respective heirs,
family members, executors and assigns hereby release, acquit and forever
discharge the Company, and its past, present and future officers, directors,
agents, employees, attorneys, shareholder, investors, administrators, divisions,
subsidiaries, parents, predecessor and successor corporations, assigns and
affiliates, of and from, and agree not to sue or otherwise institute or cause to
be instituted any legal or administrative proceedings concerning any and all
claims, liabilities, demands, causes of action, costs, expenses, attorneys’
fees, damages, indemnities and obligations of every kind and nature, in law,
equity or otherwise, known and unknown, suspected and unsuspected, disclosed and
undisclosed, arising out of or in any way related to agreements, events, acts or
conduct in any time prior to and including the execution date hereof, including
but not limited to: (i) any and all such claims and demands directly or
indirectly arising our of or in any way connected with your employment with the
Company or your transition to Special Advisor; (ii) claims or demands related to
salary, bonuses, commissions, stock, stock options, or any other ownership
interests in the Company, vacation pay, fringe benefits, expense reimbursements,
sabbatical benefits, severance benefits, or any other form of compensation; and
(iii) claims pursuant to any federal, state, local law, statute or cause of
action including, but not limited to, the federal Civil Rights Act of 1964, as
amended; the Civil Rights Act of 1991, as amended; the federal Age
Discrimination in Employment Act of 1967, as amended (“ADEA”); the federal
Americans with Disabilities Act of 1990; the Fair Labor Standards Act, as
amended; the Employee Retirement Income Security Act of 1974, as amended; the
worker Adjustment and Retraining Notification Act the California Fair Employment
and Housing Act, as amended; Labor Code section 201, et seq. and section 970, et
seq.; tort law; contract law; wrongful discharge; discrimination; fraud;
defamation; harassment; emotional distress; and breach of the implied covenant
of good faith and fair dealing.

 

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10. ADEA Waiver

You acknowledge that you are knowingly and voluntarily waiving and releasing any
rights you may have under the ADEA, as amended. You also acknowledge that the
consideration given for the waiver and release in the preceding paragraph is in
addition to anything of value to which you were already entitled. You further
acknowledge that you have been advised by this writing, as required by the ADEA,
that: (a) your waiver and release do not apply to any rights or claims that may
arise after the execution date of this Agreement; (b) you should consult with
and attorney prior to executing this Agreement; (c) you have twenty–one
(21) days to consider this Agreement (although you may choose to voluntarily
execute this Agreement earlier); (d) you have seven (7) days following the
execution of this Agreement by the parties to revoke the Agreement; and (e) this
Agreement will not be effective until the date upon which the revocation period
has expired, which will be the eighth (8th) day after this Agreement is executed
by you (“Effective Date”).

 

11. Waiver

In granting the release herein, you acknowledge that you understand that you
have read and understand Section 1542 of the California Civil Code, which reads
as follows:

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.”

You hereby expressly waive and relinquish all rights and benefits under that
section and any law of any jurisdiction of similar effect with respect to the
release of unknown or unsuspected claims that you may have against the Company.

 

12. Non-Disparagement

You agree to refrain from making any negative comments concerning the Company’s
business, products or services, officers, employees and directors and to refrain
from any, defamation, libel or slander of the Company and its respective
officers, directors, employees, investors, shareholders, administrators,
affiliates, divisions, subsidiaries, predecessor and successor corporations, and
assigns or tortuous interference with the contracts and relationships of the
Company and its respective officers, directors, employees, investors,
shareholders, administrators, affiliates, divisions, subsidiaries, predecessor
and successor corporations and assigns.

 

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13. No Pending or Future Lawsuits

You represent that you have no lawsuits, claims or actions pending in your name,
or on behalf of any other person or entity against the Company or any other
person or entity referred to herein. You also represent that you do not intend
to bring any claims on your behalf or on behalf of any other person or entity
against the Company or any other person or entity referred to herein.

 

14. No Admission of Liability

You understand and acknowledge that this Agreement constitutes a compromise and
settlement of disputed claims. No action taken by the Company, either previously
or in connection with this Agreement shall be deemed or construed to be (i) an
admission of the truth or falsity of any claims heretofore made or (ii) an
acknowledgement or admission by the Company of any fault or liability whatsoever
to either you or to any third party.

 

15. Arbitration and Equitable Relief

 

  (a) Except as provided in Section 15(d) below, you and the Company agree that
to the extent permitted by law, any dispute or controversy arising out of,
relating to, or in connection with this Agreement, or the interpretations,
validity, construction, performance, breach or termination thereof will be
settled by arbitration to be held in the County of Santa Clara, California, in
accordance with the National Rules for the Resolution of Employment Disputes
then in effect of the American Arbitration Association (the “Rules”). The
arbitrator may grant injunctions or other relief in such dispute or controversy.
The decision of the arbitrator will be final, conclusive and binding on the
parties to the arbitration. Judgment may be entered on the arbitrator’s decision
in any court having jurisdiction.

 

  (b) The arbitrator will apply California law to the merits of any dispute or
claim (with the exception of its conflict of laws provisions). You hereby
expressly consent to the personal jurisdiction of the state and federal courts
located in California for any action or proceeding arising from or relating to
this Agreement and/or relating to any arbitration in which the parties are
participants.

 

  (c) The Company will pay the direct costs and expenses of the arbitration. The
Company and you each will pay your own counsel fees and expenses.

 

  (d)

The Company or you may apply to any court of competent jurisdiction for a
temporary restraining order, preliminary injunction, or other interim or

 

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conservatory relief, as necessary to enforce the provisions of this Agreement,
without breach of this arbitration agreement and without abridgement of the
powers of the arbitrator.

 

  (e) You understand that nothing in this Section 15 modifies your at-will
status. Either the Company or you can terminate the employment relationship at
any time, with or without cause.

YOU HAVE READ AND UNDERSTAND THIS SECTION 15, WHICH DISCUSSES ARBITRATION. YOU
UNDERSTAND THAT BY SIGNING THIS AGREEMENT, YOU AGREE TO THE EXTENT PERMITTED BY
LAW, TO SUBMIT ANY FUTURE CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION
WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE,
BREACH, OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION
CLAUSE CONSTITUTES A WAIVER OF YOUR RIGHT TO A JURY TRIAL AND RELATES TO THE
RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EXECUTIVE
RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING CLAIMS:

ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT,
BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING,
BOTH EXPRESS AND IMPLIES; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL
DISTRESS; INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC
ADVANTAGE; AND DEFAMATION;

ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL STATUTE,
INCLUDING, BUT NOT LIMITED TO, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE
FAIR LABOR STANDARDS ACT, AND ANY LAW OF ANY STATE; AND

ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO
EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.

 

16. Cooperation with Company

After the employment term, you will cooperate fully with the Company in
connection with any and all existing or future litigation, arbitrations,
mediations or investigations brought by or against the Company or any of its
affiliates in which the Company

 

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reasonably deems your cooperation necessary or desirable. You agree to provide
advice, assistance and information, including offering and explaining evidence,
providing sworn statements, participating in discovery and trial preparation and
testimony as may reasonably be deemed necessary or desirable by the Company
relating to its position in any such legal proceedings. You will act in good
faith to furnish the information and cooperation required by this Section 16 and
the Company will act in good faith so that the requirement to furnish such
information and cooperation does not create and undue hardship for you. The
Company will reimburse your for reasonable out-of-pocket expenses incurred by
you as a result of your cooperation, within ten (10) days of the presentation of
appropriate documentation thereof, in accordance with the Company’s standard
reimbursement policies and procedures.

 

17. Entire Agreement

This Agreement, including Exhibit A, constitutes the complete, final and
exclusive embodiment of the entire agreement between you and the Company with
regard to the subject matter hereof. It supersedes any and all agreements
entered into by and between you and the Company with respect to your employment
relationship with the Company. It is entered into without reliance on any
promise or representation, written or oral, other than those expressly contained
herein. It may not be modified except in a writing signed by you and a duly
authorized officer of the Company. Each party has carefully read this Agreement,
has been afforded the opportunity to be advised of its meaning and consequences
by his or its perspective attorneys, and signed the same of his or its own free
will.

 

18. No Representations

You represent that you have had the opportunity to consult with an attorney, and
have carefully read and understood the scope and effect of the provisions of
this Agreement. Neither party has relied upon any representations or statements
made by the other party hereto which are not specifically set forth in this
Agreement.

 

19. Severability

In the event that any provision hereof becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision.

 

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20. No Oral Modification

This Agreement may only be amended in writing signed by you and the President
and CEO.

 

21. Counterparts

This Agreement may be executed in counterparts, and each counterpart shall have
the same force and effect as an original and shall constitute an effective,
binding agreement on the part of each of the undersigned.

 

22. Successors and Assigns

This Agreement will bind the heirs, personal representatives, successors and
assigns of each party, and will inure to the benefit of each party, its heirs,
personal representatives, successors and assigns.

 

23. Applicable Law

This Agreement will be deemed to have been entered into and will be construed
and enforced in accordance with the laws of the State of California as applied
to contracts made and to be performed entirely within California.

If this Agreement is acceptable to you, please sign below and on Exhibit A and
return the originals of both to me.

 

Sincerely, Exar Corporation By:  

/s/ Richard Leza

Name:   Richard Leza Title:   Acting President and CEO

 

UNDERSTOOD AND AGREED:

/s/ Bahram Ghaderi

Bahram Ghaderi

Date: 7/12/07

 

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