Exhibit 10.1

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PLAN DOCUMENT

Fiscal Year 2013

Management Incentive Program

 

1.0 Summary

The Exar Corporation (the “Company”) Fiscal Year 2013 Management Incentive
Program (the “Program”) is a stock based incentive program designed to motivate
participants to achieve the Company’s financial, operational and strategic goals
and to reward them for performance against those goals. Incentives granted under
the Program are denominated in shares of the Company’s common stock and are
subject to the attainment of the Company’s performance goals as established by
the Compensation Committee of the Board of Directors (the “Board”) for the
fiscal year.

 

2.0 Eligibility

Participants are approved solely at the discretion of the Compensation Committee
when acting on behalf of the full Board. All executive officers are eligible to
be considered for participation. The President/CEO may recommend that additional
employees of the Company and its subsidiaries participate in the Program,
subject to the approval of the Compensation Committee.

 

3.0 Change in Status

Participants who give notice of termination or who terminate employment,
voluntarily or involuntarily, prior to the date of payout are not eligible for
payment.

Employees who are on a Leave of Absence in excess of 60 calendar days during the
Program year shall have their target award prorated by the amount of time
actually worked plus 60 days.

 

4.0 Administration

The Compensation Committee is ultimately responsible for administering the
Program, and has designated the Management Committee, consisting of the
President/CEO, the Vice President/CFO, and the Vice President of Human Resources
to administer the Program, provided that the Compensation Committee shall make
all determinations with respect to incentives granted to executive officers
under the Program. The Compensation Committee, in its sole discretion, may amend
or terminate the Program, or any part thereof, at any time and for any reason
without prior notice.

 

5.0 Definitions

 

  5.1 The Salary

This is the annual base salary, as established at the start of the fiscal year,
or at the time of Program entry, exclusive of bonuses, incentive payments or
awards, auto allowance, or any such extras or perquisites over base pay.

 

  5.2 The Target Share Award

A participant’s “Target Share Award” is expressed as the total number of shares
the participant is eligible to receive at 100% payout. The Target Share Award is
calculated by multiplying the

 

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participant’s Salary by a pre-approved target incentive percentage and dividing
the result by the closing value of the Company’s stock price as of the first
trade date of the Program fiscal year. Each participant’s Target Share Award is
subject to adjustment by the Compensation Committee upon the occurrence of a
stock split, reorganization or other similar event affecting the Company’s
common stock in accordance with the principles set forth in the terms of the
Company’s 2006 Equity Incentive Plan.

 

  5.3 Maximum Award

No participant may receive an award greater than 138% of the “Target Share
Award”.

 

  5.4 Target Pool Earned

At the end of the fiscal year, the Compensation Committee will determine the
percentage of the “Target Pool Earned” for all participants by assessing the
Company’s financial performance against financial goals for AOP Revenue and AOP
Non-GAAP Operating Income (EBIT), before cash profit sharing, as established by
the Board of Directors. Funding of the Target Pool will occur only if 80% of the
AOP Revenue and 80% of the AOP Non-GAAP Operating Income (EBIT), before cash
profit sharing, are achieved.

 

  5.5 Individual Target Payout

The Individual Target Payout is calculated by multiplying the Target Share Award
by the Target Pool Earned.

 

  5.6 Final Share Award

The number of shares to be awarded to a participant shall be determined by the
Compensation Committee following the end of the fiscal year by adding the
Company and Individual Performance Modifiers (as defined below).

 

  5.6.1 Company Modifier

The Final Share Award is weighted 70% on Company Performance. This amount is
calculated by multiplying the Individual Target Payout by 70%.

 

  5.6.2 Individual Performance Modifier

The Final Share Award is weighted 30% on Individual Performance. The
President/CEO will assess the performance of each individual participant in the
Program at the conclusion of the fiscal year based upon specific contributions
and achievement of pre-established individual objectives, as approved by the
Compensation Committee. Based on individual performance, a performance factor
will be assigned to the final calculation. The Individual Performance Modifier
is calculated by multiplying the Individual Target Payout by 30% and the result
by the individual performance factor.

 

6.0 Other Program Provisions

 

  6.1 Tax Withholding

Shares issued in respect of an award hereunder are subject to applicable taxes
at the time of payment, and payment of such taxes is the responsibility of the
participant. Subject to the terms of the Plans, upon any distribution of shares
of the Company’s common stock in payment of an award hereunder, the Company may
reduce the number of shares to be delivered by (or otherwise reacquire) the
appropriate number of whole shares, valued at their then fair market

 

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value (with the “fair market value” of such shares determined in accordance with
the applicable provisions of the Plans, to satisfy any withholding obligations
of the Company or its subsidiaries with respect to such distribution of shares
at the minimum applicable withholding rates). In the event that the Company
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
an award hereunder, the Company (or a subsidiary) shall be entitled to require a
cash payment by or on behalf of the participant and/or to deduct from other
compensation payable to the participant any sums required by federal, state or
local tax law to be withheld with respect to such distribution or payment.

 

  6.2 Restrictions on Transfer

Neither the participant’s award hereunder, 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.

 

  6.3 Termination of Employment

Notwithstanding any other provision herein, a participant must be employed with
the Company or one of its subsidiaries on the date on which shares are issued in
payment of awards under the Program to be eligible to receive payment with
respect to his or her award. If a participant’s employment with the Company or a
subsidiary terminates for any reason (whether voluntarily or involuntarily, due
to his death or disability, or otherwise) prior to the payment date, the
participant’s award under the Program will terminate and the participant will
have no further rights with respect thereto or in respect thereof.

 

  6.4 No Right to Continued Employment

Participation in the Program does not constitute a guarantee of employment or
interfere in any way with the right of the Company (or any subsidiary) to
terminate a participant’s employment or to change the participant’s compensation
or other terms of employment at any time. There is no commitment or obligation
on the part of the Company (or any subsidiary) to continue any incentive program
(similar to the Program or otherwise) in any future fiscal year.

 

  6.5 No Stockholder Rights

The participant shall have no rights as a stockholder of the Company, no
dividend rights and no voting rights, with respect to his or her award hereunder
and any shares underlying or issuable in respect of such award until such shares
are actually issued to and held of record by the participant. 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.

 

  6.6 Adjustments

The Compensation Committee may, in its sole discretion, adjust performance
measures, performance goals, relative weights of the measures, and other
provisions of the Plan to the extent (if any) it determines that the adjustment
is necessary or advisable to preserve the intended incentives and benefits to
reflect (1) any material change in corporate capitalization, any material
corporate transaction (such as a reorganization, combination, separation,
merger, acquisition, or any combination of the foregoing), or any complete or
partial liquidation of the Company, (2) any change in accounting policies or
practices, or (3) the effects of any special charges to the Company’s earnings,
or (4) any other similar special circumstances.

 

COMPANY CONFIDENTIAL