Exhibit 10.2

December 23, 2008

Mr. George Apostol

[Address]

Dear George:

This letter sets forth the terms of your continued employment with Exar
Corporation (“Exar”) as Chief Technology Officer, reporting to Pete Rodriguez,
President and Chief Executive Officer, and amends and restates in its entirety
the letter agreement between you and Exar dated May 19, 2008. Your annual salary
will continue to be $240,000 paid bi-weekly in accordance with Exar’s standard
payroll practices.

As a hiring incentive, you were paid a signing bonus of $20,000. If your
employment with Exar and its subsidiaries terminates for any reason (other than
a reduction-in-force initiated by Exar) prior to the first anniversary of your
hire date, you must repay the full amount of the signing bonus to Exar within 60
days following your termination.

You have been included in the FY2009 Executive Incentive Compensation Program,
effective from April 1, 2008 to March 31, 2009. Your target award is 40% of your
annual base salary. Your actual bonus will be determined and paid in accordance
with the terms of the program.

In connection with your commencing employment with Exar, you were granted an
option to purchase 150,000 shares of Exar common stock and 15,000 restricted
stock units. These awards are subject to the terms and conditions set forth in
the applicable award agreements.

In the event there is a Change of Control and your employment is terminated
within twelve (12) months following the Change of Control date either by Exar
without Cause or by you for Good Reason, (i) all options, restricted stock unit
awards and other equity-based awards granted to you by Exar, to the extent then
outstanding and otherwise unvested, will immediately vest, and (ii) you will be
entitled to receive, within sixty (60) days following your termination and
subject to all applicable withholdings, a lump sum severance payment equal to
three months base salary plus one month base salary for each year of completed
service with Exar, to a maximum aggregate severance payment equal to six months
base salary; provided, however, that Exar’s obligation to provide such
accelerated vesting and such severance payment shall be contingent upon your
providing to Exar, upon or promptly following your last day of employment with
Exar, a valid, executed general release agreement substantially in the form
attached hereto as Exhibit A, and such release agreement not having been revoked
by you pursuant to any revocation rights afforded by applicable law.

As used herein, the term “Cause” means (i) your conviction of any felony or
conviction of any crime involving moral turpitude or dishonesty;
(ii) participation in a fraud or act of dishonesty against Exar; (iii) conduct
by you which, based upon a good faith and reasonable factual investigation and
determination by Exar, demonstrates gross incompetence; or (iv) intentional,
material violation by you of any contract between you and Exar or any statutory
duty of you to Exar that is not corrected within thirty (30) days after written
notice to you thereof. Physical or mental disability shall not constitute
“Cause.”

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As used herein, the term “Good Reason” means, without your express written
consent, (i) a material diminution in your authority, duties or responsibilities
or (ii) a material diminution in your base compensation, provided that any such
diminution shall not constitute “Good Reason” unless both (x) you provide
written notice to Exar of the condition claimed to constitute Good Reason within
ninety (90) days of the initial existence of such condition, and (y) Exar fails
to remedy such condition within thirty (30) days of receiving such written
notice thereof; and provided, further, that in all events the termination of
your employment with Exar shall not be treated as a termination for “Good
Reason” unless such termination occurs not more than six (6) months following
the initial existence of the condition claimed to constitute “Good Reason.”

As used herein, the term “Change of Control” means (i) a dissolution or
liquidation of Exar; (ii) a merger or consolidation in which Exar is not the
surviving corporation; (iii) a reverse merger in which Exar is the surviving
corporation but the shares of Exar’s common stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise; (iv) any other capital
reorganization in which more than thirty-five percent (35%) of the shares of
Exar entitled to vote are exchanged, excluding in each case a capital
reorganization in which the sole purpose is to change the state of incorporation
of Exar; (v) a transaction or group of related transactions involving the sale
of all or substantially all of Exar’s assets; or (vi) the acquisition by any
person, entity or group (excluding any employee benefit plan, or related trust,
sponsored or maintained by Exar or any Exar subsidiary) of the beneficial
ownership, directly or indirectly, of securities of Exar representing more than
thirty-five percent (35%) of the combined voting power in the election of
directors. For purposes of this paragraph, acquisition of ownership interests by
any employee of Exar or its subsidiaries, whether through a “management buy-out”
or otherwise, shall not constitute a “Change of Control.”

Please sign and date in the space provided below to indicate your acceptance of
the terms set forth herein and return one copy to Diane Hill, fax
(510) 668-7011.

 

Sincerely,    Agreed and Accepted:      /s/ Diane Hill   

/s/ George Apostol

    

12/30/08

Diane Hill

Vice President

Human Resources

   George Apostol      Date   

5/30/08

   Start Date     

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EXHIBIT A

FORM OF RELEASE

I acknowledge that I 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.” I hereby expressly waive and relinquish all rights
and benefits under that section and any law of any jurisdiction of similar
effect with respect to my release of any claims I may have against the Company.

Except as otherwise set forth in this Agreement, in consideration of benefits I
will receive under my offer letter, I hereby release, acquit and forever
discharge the Company, its parents and subsidiaries, and their officers,
directors, agents, servants, employees, shareholders, successors, assigns and
affiliates, of and from 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 (other than any claim for
indemnification I may have as a result of any third party action against me
based on my employment with the Company), arising out of or in any way related
to agreements, events, acts or conduct at any time prior to and including the
Effective Date of this Agreement, including but not limited to: all such claims
and demands directly or indirectly arising out of or in any way connected with
my employment with the Company or the termination of that employment, including
but not limited to, claims of intentional and negligent infliction of emotional
distress, any and all tort claims for personal injury, 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,
severance pay, or any other form of compensation; claims pursuant to any
federal, state or local law or cause of action including, but not limited to,
the federal Civil Rights Act of 1964, as amended; the federal Age Discrimination
in Employment Act of 1967, as amended (“ADEA”); the federal Americans with
Disabilities Act of 1990; the California Fair Employment and Housing Act, as
amended; tort law; contract law; wrongful discharge; discrimination; fraud;
defamation; emotional distress; and breach of the implied covenant of good faith
and fair dealing.

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