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                                  EXHIBIT 10.6

                                EXAR CORPORATION

                 1996 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

                              ADOPTED JULY 23, 1996

                    APPROVED BY STOCKHOLDERS AUGUST 29, 1996
                       AMENDED AND RESTATED MARCH 20, 1997
                       AMENDED AND RESTATED JUNE 12, 1997
                     AMENDED AND RESTATED SEPTEMBER 18, 1997
                     AMENDED AND RESTATED SEPTEMBER 10, 1998
                     AMENDED AND RESTATED SEPTEMBER 11, 1998
                       AMENDED AND RESTATED APRIL 13, 2000

1.       PURPOSE

         (a) The purpose of the Exar Corporation 1996 Non-Employee Directors'
Stock Option Plan (the "Plan") is to provide a means by which each director of
Exar Corporation, a Delaware corporation (the "Company") who is not otherwise an
employee of the Company or of any Affiliate of the Company (each such person
being hereafter referred to as a "Non-Employee Director") will be given an
opportunity to purchase stock of the Company.

         (b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended from time to time (the "Code").

         (c) The Company, by means of the Plan, seeks to retain the services of
persons now serving as Non-Employee Directors of the Company, to secure and
retain the services of persons capable of serving in such capacity, and to
provide incentives for such persons to exert maximum efforts for the success of
the Company.

2.       ADMINISTRATION

         (a) The Plan shall be administered by the Board of Directors of the
Company (the "Board") unless and until the Board delegates administration to a
committee, as provided in subparagraph 2(b).

         (b) The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members of the Board (the "Committee"). If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.

3.       SHARES SUBJECT TO THE PLAN

         (a) Subject to the provisions of paragraph 11 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to options granted
under the Plan shall not exceed in the aggregate two hundred fifty thousand
(250,000) shares of the Company's common stock. If any option granted under the
Plan shall for any reason expire or otherwise terminate without having been
exercised in full, the stock not purchased under such option shall again become
available for the Plan.

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         (b) The stock subject to the Plan may be unissued shares or reacquired
 shares, bought on the market or otherwise.

4.       ELIGIBILITY.

         Options shall be granted only to Non-Employee Directors of the Company.

5.       NON-DISCRETIONARY GRANTS.

         (a) Each person who is elected for the first time to be a Non-Employee
Director after the effective date of the Plan shall, on the date of initial
election as a Non-Employee Director by the Board or shareholders of the Company,
automatically be granted an option to purchase eighteen thousand (18,000) shares
of the Company's common stock (subject to adjustment as provided in paragraph 11
hereof) on such date upon the terms and conditions set forth herein (the
"Initial Grant").

         (b) On the date of each Annual Meeting of the Stockholders of the
Company (or the next day that the Company's stock is traded should the stock not
trade on such date), an option to purchase seven thousand five hundred (7,500)
shares of the Company's common stock (subject to adjustment as provided in
paragraph 11 hereof) shall automatically be granted to such person provided that
such person (i) is at that time a Non-Employee Director, and (ii) has served
continuously as a Non-Employee Director since the date of the previous Annual
Meeting of the Stockholders of the Company (the "Annual Grant"); PROVIDED,
HOWEVER, that the Annual Grant for 1998 shall be made on September 11, 1998, and
the number of shares of the Company's Common Stock subject to such Annual Grant
shall equal seven thousand five hundred (7,500) minus the number of shares for
which an option to purchase was granted to such person under this Section 5(b)
on or after September 11, 1997, that had not vested as of September 11, 1998.
Notwithstanding the foregoing, with respect to the Chairman of the Board, the
Annual Grant shall be for twice the number of shares as are granted to other
Non-Employee Directors, or fifteen thousand (15,000) shares of the Company's
common stock (subject to adjustment as provided in paragraph 11 hereof.

         (c) In addition, the Chairman of the board shall be granted an option
to purchase eleven thousand two hundred fifty (11,250) shares of the Company's
common stock (subject to adjustments as provided in paragraph 11 hereof) on
April 13, 2000 upon the terms and conditions set forth in paragraph 7 with the
exception that the option will become exercisable and fully vested in six months
from the date of grant, namely October 13, 2000; provided that the Chairman of
the Board remain in the service of the Company from April 13, 2000 continuously
until October 13, 2000.

6.       DEFERRED DIRECTOR FEE GRANTS.

         (a) Each Non-Employee Director may elect to apply a percentage of his
or her fees for any calendar year otherwise payable in cash for his or her
service on the Board or a committee of the Board ("Directors' Fees"), in an
amount equal to at least twenty-five percent (25%) but in no event more than
fifty percent (50%), to the acquisition of an option to purchase shares of the
Company's common stock pursuant to the terms of this paragraph 6 ("Deferred Fee
Option"). Such election is irrevocable and must be filed with the Board or a
delegate of the Board prior to the commencement of the calendar year in which
the Directors' Fees to be deferred are earned. Notwithstanding the foregoing, a
newly elected Non-Employee Director may file such an irrevocable election with
the Board or a delegate of the Board within thirty (30) days of the date the
Non-Employee Director is elected to the Board.

         Each Non-Employee Director who files such a timely election shall
automatically be granted an option under this paragraph 6 on (i) the first
trading day in January of the calendar year for which the deferral election
is to be in effect; or (ii) for a newly elected Non-Employee Director, the
first trading day of the month following the month in which the Non-Employee
Director files such election.

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         Notwithstanding the foregoing, if the number of shares remaining
available for the grant of options under the Plan is not sufficient to cover
non-discretionary option grants under paragraph 5 and Deferred Fee Options, the
available shares shall be first allocated to non-discretionary option grants
under paragraph 5 and then ratably among the Non-Employee Directors eligible to
receive a Deferred Fee Option based on their relative deferred fees.

         (b) The purchase price per share of common stock of the Company for the
shares to be purchased pursuant to the exercise of any Deferred Fee Option shall
be 33-1/3% of the fair market value of the stock on the date such Deferred Fee
Option is granted.

         (c) The number of shares of common stock of the Company subject to a
Deferred Fee Option shall be determined pursuant to the following formula
(rounded down to the nearest whole number):

                  X = A / (B x 66-2/3%), where
                  X is the number of option shares,
                  A is the maximum amount of the Directors' Fees subject to the
                  Non-Employee Director's deferral election, and
                  B is the fair market value per share of stock on the option
                  grant date.

         (d) Each Deferred Fee Option shall vest (become exercisable) in
installments on each date that Directors' Fees would have been payable in cash
had no deferral election been in effect under this paragraph 6 with respect to
the number of shares equal to (1) the aggregate shares subject to the Deferred
Fee Option multiplied by (2) the fraction in which the numerator is the
Directors' Fees that the Non-Employee Director would have received in cash on
such date absent a deferral election and the denominator is the aggregate
Directors' Fees that the Non-Employee Director would have received for the
calendar year in cash absent a deferral election.

         Each Deferred Fee Option shall be fully vested and exercisable in the
event the Non-Employee Director dies or becomes disabled within the meaning of
Section 22(e)(3) of the Code while a director or immediately prior to the
consummation of a corporate reorganization event as described in paragraph
11(b).

         (e) If a Non-Employee Director's term as a director for the Company
shall terminate for any reason, any Deferred Fee Option then held by such
Non-Employee Director, to the extent then exercisable, shall remain exercisable
after the termination of his or her service as a Non-Employee Director for a
period of three (3) years (but in no event beyond seven years from the date of
grant of the Deferred Fee Option). If the Deferred Fee Option is not exercised
during the applicable period, it shall be deemed to have been forfeited and of
no further force or effect.

7.       OPTION PROVISIONS.

         Each option shall be subject to the following terms and conditions:

         (a) The term of each option commences on the date it is granted and,
unless sooner terminated as set forth herein, expires on the date
("Expiration Date") seven (7) years from the date of grant. If the optionee's
service as a Non-Employee Director terminates for any reason or for no
reason, the option shall terminate on the earlier of the Expiration Date or
the date twelve (12) months following the date of termination of such
service; PROVIDED, HOWEVER, that if a Non-Employee Director becomes an
employee or consultant of the Company while holding an option issued under
the Plan, the option shall terminate on the earlier of the Expiration Date or
the date twelve (12) months after the date on which both the directorship and
the employment or consulting relationship of the optionee with the Company
terminate. Notwithstanding the foregoing, if such termination is due to the
optionee's death or permanent and total disability, within the meaning of
Section 422(c)(6) of the

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Code, the option shall terminate on the earlier of the Expiration Date or
twelve (12) months following termination of such directorship or service. In
any and all circumstances, an option may be exercised following termination
of the optionee's service as a Non-Employee Director or employee of or
consultant to the Company or any Affiliate only as to that number of shares
as to which it was exercisable on the date of termination of such service
under the provisions of subparagraph 7(e).

         (b) The exercise price of each option shall be one hundred percent
(100%) of the fair market value of the stock subject to such option on the date
such option is granted.

         (c) Payment of the exercise price of each option is due in full in cash
at the time of exercise.

         (d) An option shall not be transferable except by will or by the laws
of descent and distribution, or pursuant to a domestic relations order
satisfying the requirements of Rule 16(a)-12 under the Securities Exchange Act
of 1934 and shall be exercisable during the lifetime of the person to whom the
option is granted only by such person (or by his guardian or legal
representative) or transferee pursuant to such an order. Notwithstanding the
foregoing, the optionee may, by delivering written notice to the Company in a
form satisfactory to the Company, designate a third party who, in the event of
the death of the optionee, shall thereafter be entitled to exercise the option.

         (e) An option granted in an Initial Grant shall become exercisable in
annual installments over a period of three (3) years from the date of grant,
with thirty-three and one third percent (33-1/3%) becoming exercisable at the
end of each anniversary of the date of grant, provided that the optionee has,
during the entire period prior to such vesting date, continuously served as a
Non-Employee Director or employee of or consultant to the Company or any
Affiliate of the Company, whereupon such option shall become fully exercisable
in accordance with its terms with respect to that portion of the shares
represented by that installment.

         (f) An option granted in an Annual Grant shall become exercisable in
monthly installments over a period of twelve (12) months from the date of grant,
with eight and one-third percent (8-1/3%) becoming exercisable at the end of
each full month following the date of grant, provided that the optionee has,
during the entire period prior to such vesting date, continuously served as a
Non-Employee Director or employee of or consultant to the Company or any
Affiliate of the Company, whereupon such option shall become fully exercisable
in accordance with its terms with respect to that portion of the shares
represented by that installment.

         (g) If a Non-Employee Director's term as a Director of the Company
expires and the Non-Employee Director is not elected or appointed to an
immediate subsequent term as a Director of the Company, any option then held by
such Non-Employee Director shall become fully vested and exercisable in
accordance with its terms.

         (h) The Company may require any optionee, or any person to whom an
option is transferred under subparagraph 7(d), as a condition of exercising any
such option: (i) to give written assurances satisfactory to the Company as to
the optionee's knowledge and experience in financial and business matters; and
(ii) to give written assurances satisfactory to the Company stating that such
person is acquiring the stock subject to the option for such person's own
account and not with any present intention of selling or otherwise distributing
the stock. These requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (i) the issuance of the shares upon the
exercise of the option has been registered under a then-currently-effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), or (ii), as to any particular requirement, a determination is
made by counsel for the Company that such requirement need not be met in the
circumstances under the then-applicable securities laws.

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         (i) Notwithstanding anything to the contrary contained herein, an
option may not be exercised unless the shares issuable upon exercise of such
option are then registered under the Securities Act or, if such shares are not
then so registered, the Company has determined that such exercise and issuance
would be exempt from the registration requirements of the Securities Act.

8.       COVENANTS OF THE COMPANY.

         (a) During the terms of the options granted under the Plan, the Company
shall keep available at all times the number of shares of stock required to
satisfy such options.

         (b) The Company shall seek to obtain from each regulatory commission or
 agency having jurisdiction over the Plan such authority as may be required to
 issue and sell shares of stock upon exercise of the options granted under the
 Plan; PROVIDED, HOWEVER, that this undertaking shall not require the Company to
 register under the Securities Act either the Plan, any option granted under the
 Plan, or any stock issued or issuable pursuant to any such option. If, after
 reasonable efforts, the Company is unable to obtain from any such regulatory
 commission or agency the authority which counsel for the Company deems
 necessary for the lawful issuance and sale of stock under the Plan, the Company
 shall be relieved from any liability for failure to issue and sell stock upon
 exercise of such options.

9.       USE OF PROCEEDS FROM STOCK.

         Proceeds from the sale of stock pursuant to options granted under the
Plan shall constitute general funds of the Company.

10.      MISCELLANEOUS.

         (a) Neither an optionee nor any person to whom an option is transferred
under subparagraph 7(d) shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to such option unless
and until such person has satisfied all requirements for exercise of the option
pursuant to its terms.

         (b) Nothing in the Plan or in any instrument executed pursuant thereto
shall confer upon any Non-Employee Director any right to continue in the service
of the Company or any Affiliate or shall affect any right of the Company, its
Board or shareholders or any Affiliate to terminate the service of any
Non-Employee Director with or without cause.

         (c) No Non-Employee Director, individually or as a member of a group,
and no beneficiary or other person claiming under or through him, shall have any
right, title or interest in or to any option reserved for the purposes of the
Plan except as to such shares of common stock, if any, as shall have been
reserved for him pursuant to an option granted to him.

         (d) In connection with each option made pursuant to the Plan, it shall
be a condition precedent to the Company's obligation to issue or transfer shares
to a Non-Employee Director, or to evidence the removal of any restrictions on
transfer, that such Non-Employee Director make arrangements satisfactory to the
Company to insure that the amount of any federal or other withholding tax that
may be required to be withheld with respect to such sale or transfer, or such
removal or lapse, is made available to the Company for timely payment of such
tax.

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11.      ADJUSTMENTS UPON CHANGES IN STOCK.

         (a) If any change is made in the stock subject to the Plan, or subject
to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the Plan and outstanding
options will be appropriately adjusted in the class(es) and maximum number of
shares subject to the Plan and the class(es) and number of shares and price per
share of stock subject to outstanding options.

         (b) In the event of: (1) a dissolution or liquidation of the Company;
(2) a merger or consolidation in which the Company is not the surviving
corporation; (3) a reverse merger in which the Company is the surviving
corporation but the shares of the Company'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; or (4) any other capital
reorganization in which more than fifty percent (50%) of the shares of the
Company 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 the Company, then all outstanding options shall become exercisable in full
for a period of at least ten (10) days prior to such event. Outstanding options
which have not been exercised prior to such event shall terminate on the date of
such event unless assumed by a successor corporation.

12.      AMENDMENT OF THE PLAN.

         (a) The Board at any time, and from time to time, may amend the Plan.
Except as provided in paragraph 11 relating to adjustments upon changes in
stock, no amendment shall be effective unless approved by the stockholders of
the Company where stockholder approval is necessary for the Plan to comply with
the requirements of Rule 16b-3 or Nasdaq or securities exchange listing
requirements.

         (b) Rights and obligations under any option granted before any
amendment of the Plan shall not be impaired by such amendment unless (i) the
Company requests the consent of the person to whom the option was granted and
(ii) such person consents in writing.

13.      TERMINATION OR SUSPENSION OF THE PLAN.

         (a) The Board may suspend or terminate the Plan at any time. No options
may be granted under the Plan while the Plan is suspended or after it is
terminated.

         (b) Rights and obligations under any option granted while the Plan is
in effect shall not be impaired by suspension or termination of the Plan, except
with the consent of the person to whom the option was granted.

14.      EFFECTIVE DATE OF PLAN; CONDITIONS OF EXERCISE.

         The Plan shall become effective on the date approved by the Board,
provided that no options may be exercised unless and until the Plan is approved
by the stockholders of the Company.

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