EXHIBIT 10.5

EXAR CORPORATION

2006 EQUITY INCENTIVE PLAN

DIRECTOR RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS DIRECTOR RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”) is dated
as of [                    ] by and between Exar Corporation, a Delaware
corporation (the “Corporation”), and [                    ] (the “Director”).

W I T N E S S E T H

WHEREAS, pursuant to the Exar Corporation 2006 Equity Incentive Plan (the
“Plan”), the Corporation has granted to the Director effective as of the date
hereof (the “Award Date”), a credit of restricted stock units under the Plan
(the “Award”), upon the terms and conditions set forth herein and in the Plan.

NOW THEREFORE, in consideration of services rendered and to be rendered by the
Director, and the mutual promises made herein and the mutual benefits to be
derived therefrom, the parties agree as follows:

1. Defined Terms. Capitalized terms used herein and not otherwise defined herein
shall have the meaning assigned to such terms in the Plan.

2. Grant. Subject to the terms of this Agreement, the Corporation hereby grants
to the Director an Award with respect to an aggregate of [                    ]
stock units (subject to adjustment as provided in Section 7.1 of the Plan) (the
“Stock Units”). As used herein, the term “stock unit” shall mean a non-voting
unit of measurement which is deemed for bookkeeping purposes to be equivalent to
one outstanding share of the Corporation’s Common Stock (subject to adjustment
as provided in Section 7.1 of the Plan) solely for purposes of the Plan and this
Agreement. The Stock Units shall be used solely as a device for the
determination of the payment to eventually be made to the Director if such Stock
Units vest pursuant to Section 3. The Stock Units shall not be treated as
property or as a trust fund of any kind.

3. Vesting. Subject to Section 8 below, the Award shall vest and become
nonforfeitable with respect to one hundred percent (100%) of the total number of
Stock Units (subject to adjustment under Section 7.1 of the Plan) on the earlier
to occur of (i) the first anniversary of the Award Date, and (ii) the first
annual meeting of the Corporation’s stockholders that occurs after the Award
Date.

4. Continuance of Services. The vesting schedule requires continued service
through each applicable vesting date as a condition to the vesting of the
applicable installment of the Award and the rights and benefits under this
Agreement. Partial service, even if substantial, during any vesting period will
not entitle the Director to any proportionate vesting or avoid or mitigate a
termination of rights and benefits upon or following a termination of services
as provided in Section 8 below or under the Plan. Nothing contained in this
Agreement or the Plan constitutes a continued service commitment by the
Corporation or interferes with the right of the Corporation to increase or
decrease the compensation of the Director from the rate in existence at any
time.

 

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5. Dividend and Voting Rights.

(a) Limitations on Rights Associated with Units. The Director shall have no
rights as a stockholder of the Corporation, no dividend rights (except as
expressly provided in Section 5(b) with respect to Dividend Equivalent Rights)
and no voting rights, with respect to the Stock Units and any shares of Common
Stock underlying or issuable in respect of such Stock Units until such shares of
Common Stock are actually issued to and held of record by the Director. No
adjustments will be made for dividends or other rights of a holder for which the
record date is prior to the date of issuance of the stock certificate.

(b) Dividend Equivalent Rights Distributions. As of any date that the
Corporation pays an ordinary cash dividend on its Common Stock, the Corporation
shall pay the Director an amount equal to the per share cash dividend paid by
the Corporation on its Common Stock on such date multiplied by the number of
Stock Units remaining subject to this Award as of the related dividend payment
record date. No such payment shall be made with respect to any Stock Units
which, as of such record date, have either been paid pursuant to Section 7 or
terminated pursuant to Section 8.

6. Restrictions on Transfer. Neither the Award, nor any interest therein or
amount or shares payable in respect thereof may be sold, assigned, transferred,
pledged or otherwise disposed of, alienated or encumbered, either voluntarily or
involuntarily. The transfer restrictions in the preceding sentence shall not
apply to (a) transfers to the Corporation, or (b) transfers by will or the laws
of descent and distribution.

7. Timing and Manner of Payment of Stock Units. On or as soon as
administratively practical following vesting of the Award pursuant to Section 3
or Section 9, the Corporation shall deliver to the Director a number of shares
of Common Stock (either by delivering one or more certificates for such shares
or by entering such shares in book entry form, as determined by the Corporation
in its discretion) equal to the number of Stock Units subject to this Award that
vest on the applicable vesting date, unless such Stock Units terminate prior to
the given vesting date pursuant to Section 8. The Corporation’s obligation to
deliver shares of Common Stock or otherwise make payment with respect to vested
Stock Units is subject to the condition precedent that the Director or other
person entitled under the Plan to receive any shares with respect to the vested
Stock Units deliver to the Corporation any representations or other documents or
assurances required pursuant to Section 8.1 of the Plan. The Director shall have
no further rights with respect to any Stock Units that are paid or that
terminate pursuant to Section 8.

8. Effect of Termination of Service. The Director’s Stock Units shall terminate
to the extent such units have not become vested prior to the first date the
Director is no longer a member of the Board, regardless of the reason for the
termination of the Director’s service as Board member (whether voluntarily or
involuntarily, including a termination due to death or disability). If any
unvested Stock Units are terminated hereunder, such Stock Units shall
automatically terminate and be cancelled as of the applicable termination date
without payment of any consideration by the Corporation and without any other
action by the Director, or the Director’s beneficiary or personal
representative, as the case may be.

 

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9. Adjustments Upon Specified Events. The Administrator may accelerate payment
and vesting of the Stock Units in such circumstances as it, in its sole
discretion, may determine. In addition, upon the occurrence of certain events
relating to the Corporation’s stock contemplated by Section 7.1 of the Plan
(including, without limitation, an extraordinary cash dividend on such stock),
the Administrator shall make adjustments if appropriate in the number of Stock
Units then outstanding and the number and kind of securities that may be issued
in respect of the Award. No such adjustment shall be made with respect to any
ordinary cash dividend for which Dividend Equivalent Rights may be paid pursuant
to Section 5(b).

10. Tax Withholding. Subject to Section 8.1 of the Plan, upon any distribution
of shares of Common Stock in respect of the Stock Units, the Corporation shall
automatically reduce the number of shares to be delivered by (or otherwise
reacquire) the appropriate number of whole shares, valued at their then fair
market value (with the “fair market value” of such shares determined in
accordance with the applicable provisions of the Plan), to satisfy any
withholding obligations of the Corporation with respect to such distribution of
shares at the minimum applicable withholding rates. In the event that the
Corporation cannot legally satisfy such withholding obligations by such
reduction of shares, or in the event of a cash payment or any other withholding
event in respect of the Stock Units, the Corporation shall be entitled to
require a cash payment by or on behalf of the Director and/or to deduct from
other compensation payable to the Director any sums required by federal, state
or local tax law to be withheld with respect to such distribution or payment.

11. Notices. Any notice to be given under the terms of this Agreement shall be
in writing and addressed to the Corporation at its principal office to the
attention of the Secretary, and to the Director at the Director’s last address
reflected on the Corporation’s records, or at such other address as either party
may hereafter designate in writing to the other. Any such notice shall be given
only when received, but if the Director is no longer a member of the Board,
shall be deemed to have been duly given by the Corporation when enclosed in a
properly sealed envelope addressed as aforesaid, registered or certified, and
deposited (postage and registry or certification fee prepaid) in a post office
or branch post office regularly maintained by the United States Government.

12. Plan. The Award and all rights of the Director under this Agreement are
subject to, and the Director agrees to be bound by, all of the terms and
conditions of the provisions of the Plan, incorporated herein by reference. In
the event of a conflict or inconsistency between the terms and conditions of
this Agreement and of the Plan, the terms and conditions of the Plan shall
govern. The Director agrees to be bound by the terms of the Plan and this
Agreement. The Director acknowledges having read and understanding the Plan, the
Prospectus for the Plan, and this Agreement. Unless otherwise expressly provided
in other sections of this Agreement, provisions of the Plan that confer
discretionary authority on the Administrator do not (and shall not be deemed to)
create any rights in the Director unless such rights are expressly set forth
herein or are otherwise in the sole discretion of the Administrator so conferred
by appropriate action of the Administrator under the Plan after the date hereof.

13. Entire Agreement. This Agreement and the Plan together constitute the entire
agreement and supersede all prior understandings and agreements, written or
oral, of the parties hereto with respect to the subject matter hereof. The Plan
and this Agreement may be amended

 

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pursuant to Section 8.6 of the Plan. Such amendment must be in writing and
signed by the Corporation. The Corporation may, however, unilaterally waive any
provision hereof in writing to the extent such waiver does not adversely affect
the interests of the Director hereunder, but no such waiver shall operate as or
be construed to be a subsequent waiver of the same provision or a waiver of any
other provision hereof.

14. Limitation on Director’s Rights. Participation in the Plan confers no rights
or interests other than as herein provided. This Agreement creates only a
contractual obligation on the part of the Corporation as to amounts payable and
shall not be construed as creating a trust. Neither the Plan nor any underlying
program, in and of itself, has any assets. The Director shall have only the
rights of a general unsecured creditor of the Corporation with respect to
amounts credited and benefits payable, if any, with respect to the Stock Units,
and rights no greater than the right to receive the Common Stock as a general
unsecured creditor with respect to Stock Units, as and when payable hereunder.

15. Counterparts. This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

16. Section Headings. The section headings of this Agreement are for convenience
of reference only and shall not be deemed to alter or affect any provision
hereof.

17. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without regard to
conflict of law principles thereunder.

18. Construction. It is intended that the terms of the Award will not result in
the imposition of any tax liability pursuant to Section 409A of the Code. This
Agreement shall be construed and interpreted consistent with that intent.

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IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed on
its behalf by a duly authorized officer and the Director has hereunto set his or
her hand as of the date and year first above written.

 

EXAR CORPORATION,

a Delaware corporation

   DIRECTOR By:   

 

  

 

Signature

      Print Name:   

 

   Its:   

 

  

 

Print Name

     

 

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CONSENT OF SPOUSE

In consideration of the execution of the foregoing Restricted Stock Unit Award
Agreement by Exar Corporation, I,                                         , the
spouse of the Director therein named, do hereby join with my spouse in executing
the foregoing Restricted Stock Unit Award Agreement and do hereby agree to be
bound by all of the terms and provisions thereof and of the Plan.

Dated:                     

 

 

Signature of Spouse

 

Print Name

 

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