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                                  EXHIBIT 10.5



                                  PLAN DOCUMENT
                    EXECUTIVE INCENTIVE COMPENSATION PROGRAM

                              FISCAL YEAR 2000 PLAN



1.0   INTENT

      The intention of the Executive Incentive Compensation Program for Fiscal
      Year 2000 is to provide incentives to eligible Exar Corporation executives
      for achieving or surpassing established revenue and pre-tax profit goals
      derived from the FY 2000 Financial Plan.

2.0   MANAGEMENT PARTICIPANT QUALIFICATIONS

      2.1     Direct participation is limited to a small group of executives who
              have an important influence on the operation, profits, and future
              of Exar. Generally, only the corporate officers and the directors
              of major staff or line functions may be eligible.

      2.2     Participation shall be recommended by the President/CEO or
              Executive Vice-President/CFO and is subject to concurrence by the
              Compensation Committee of the Board of Directors.

      2.3     An invitation to participate and the information divulged in
              connection with the program must be considered private and not be
              discussed with others.

3.0   FUNDING OF THE INCENTIVE PLAN POOL

      3.1     General:

              The Incentive Plan Pool will be funded upon achievement of certain
              revenue and pre-tax profit goals. The pre-tax profit goal must be
              met at the pre-established threshold levels before any pool
              funding takes place. Further, this plan will not be funded unless
              there is funding and payout for the Fiscal Year 2000 Key Employee
              Incentive Program

      3.2     Calculation for Pool Funding

              The size of the executive pool is the sum of the fiscal year 2000
              annual base salary of the participants times their respective
              target award percentages. The pool size will be modified according
              to the actual revenue and profit performance levels compared to
              the approved financial plan for fiscal year 2000. Use the table in
              Attachment 2 to determine the pool size. For example, if the
              actual revenue level were $82M, the pool for revenue achievement
              would be $884k. If the pre-tax profit were $9M, the pool for the
              pre-tax profit achievement would be $507.8k. The total pool would
              be $1.3918M ($884k + $507.8k).


      3.3     Calculation for Individual Payout

              The individual payout is determined by factoring one's base
              salary, individual target award percentage, actual corporate
              revenue and pre-tax profit results, and personal performance
              factors.

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4.0   RULES

      4.1     Pre-tax profits or revenues generated by "creative accounting" or
              by system changes will be excluded for purposes of this program.

      4.2     In calculating incentive compensation, "salary" will be the total
              base compensation for the fiscal year, excluding any incentive
              pay, bonus payments, auto allowance, etc.

      4.3.    It is recognized that certain unforeseen events or inequities
              could develop in the plan as established. Consideration will be
              given to unusual circumstances. Such consideration will be made at
              year end only, and the decision of the Compensation Committee will
              be final.

      4.4     Payments will be made in accordance with the final annual
              statements as audited by the Company's independent Certified
              Public Accountants. Amounts earned should be paid prior to June
              15.

      4.5     In order to remove any deterrent to a "Purchase Acquisition", the
              write-off of in-process R&D will be added back to profits for
              calculation of pre-tax profit.

      4.6     The Compensation Committee determines the target award for
              participants.

      4.7     The program is to be in force for FY'2000, and only those who are
              in the employ of the Company and still a member of the eligible
              executive group through the date of payout will qualify for
              payments.

      4.8     As business conditions, participants' position, or the
              corporation's needs change, the Compensation Committee reserves
              the right to modify or cancel at any time with prior notice this
              Incentive Program, and participants should not presume continued
              participation in an Incentive Program.

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