Document:

1989 Employee Stock Participation Plan

 Exhibit 10.1 
 EXAR CORPORATION 
 EMPLOYEE STOCK PARTICIPATION PLAN 
 Adopted August 1, 1989 
 Effective January 1, 1990 
 Amended through August 2, 1991 
 Amended through June 24, 1999 
 Amended through October 1, 2002 
 Amended through April 1, 2006 
 1. PURPOSE. 
 (a) The purpose of the Plan is to
provide a means by which employees of Exar Corporation, a Delaware corporation (the “Company”), and its Affiliates, as defined in subparagraph 1(b), which are designated as provided in subparagraph 2(b), may 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 (the “Code”). 
 (c) The Company, by means of the Plan, seeks to retain the services of its employees, to secure and retain the services of new employees, and to provide incentives for such persons to exert maximum efforts for the
success of the Company. 
 (d) The Company intends that the rights to purchase stock of the Company granted under the Plan be considered
options issued under an “employee stock purchase plan” as that term is defined in Section 423(b) of the Code. 
 2. ADMINISTRATION.

 (a) The Plan shall be administered by the Board of Directors (the “Board”) of the Company unless and until the Board
delegates administration to a Committee, as provided in subparagraph 2(c). Whether or not the Board has delegated administration, the Board shall have the final power to determine all questions of policy and expediency that may arise in the
administration of the Plan. 
 (b) The Board shall have the power, subject to, and within the limitations of, the Plan: (i) to determine
when and how rights to purchase stock 
  

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 of the Company shall be granted and the provisions of each offering of such rights (which need not be identical);
(ii) to designate from time to time which Affiliates of the Company shall be eligible to participate in the Plan; (iii) to construe and interpret the Plan and rights granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise of this power, may correction any defect, omission or inconsistency in the Plan, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective;
(iv) to amend the Plan as provided in paragraph 13; and (v) generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company. 
 (c) 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. 
 Subject to the
provisions of paragraph 12 relating to adjustments upon changes in stock, the stock that may be sold pursuant to rights granted under the Plan shall not exceed in the aggregate one million (1,000,000) shares of the Company’s common stock
(the “Common Stock”). If any right granted under the Plan shall for any reason terminate without having been exercised, the Common Stock not purchased under such right shall again become available for the Plan. 
 4. GRANT OF RIGHTS; OFFERING. 
 The Board or the
Committee may from time to time grant or provide for the grant of rights to purchase Common Stock of the Company under the Plan to eligible employees (an “Offering”) on a date or dates (the “Offering Date(s)”) selected by the
Board or the Committee. Each Offering shall be in such form and shall contain such terms and conditions as the Board or the Committee shall deem appropriate. If an employee has more than one right outstanding under the Plan, unless he or she
otherwise indicates in agreements or notices delivered hereunder: (1) each agreement or notice delivered by that employee will be deemed to apply to all of his or her rights under the Plan, and (2) a right with a lower exercise price (or
an earlier-granted right, if two rights have identical exercise prices), will be exercised to the fullest possible extent before a right with a higher exercise price (or a later-granted right, if two rights have identical exercise prices) will be
exercised. The provisions of separate Offerings need not be identical, but each Offering shall include (through incorporation of the provisions of this Plan by reference in the Offering or otherwise) the substance of the provisions contained in
paragraphs 5 through 8, inclusive. 
  

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 5. ELIGIBILITY. 
 (a) Rights may be granted only to employees of the Company or, as the Board or the Committee may designate as provided in subparagraph 2(b), to employees of any Affiliate of the Company. Except as provided in
subparagraph 5(b), an employee of the Company or any Affiliate shall not be eligible to be granted rights under the Plan, unless, on the Offering Date, such employee has been in the employ of the Company or any Affiliate for such continuous period
preceding such grant as the Board or the Committee may require, but in no event shall the required period of continuous employment be equal to or greater than two (2) years. In addition, unless otherwise determined by the Board or the
Committee, no employee of the Company or any Affiliate shall be eligible to be granted rights under the Plan, unless, on the Offering Date, such employee’s customary employment with the Company or such Affiliate is at least twenty
(20) hours per week. 
 (b) The Board or the Committee may provide that, each person who, during the course of an Offering, first
becomes an eligible employee of the Company or designated Affiliate will, on a date or dates specified in the Offering which coincides with the day on which such person becomes an eligible employee or occurs thereafter, receive a right under that
Offering, which right shall thereafter be deemed to be a part of that Offering. Such right shall have the same characteristics as any rights originally granted under that Offering, as described herein, except that: (i) the date on which such
right is granted shall be the “Offering Date” of such right for all purposes; (ii) the Purchase Period (as defined below) for such right shall begin on its Offering Date and end coincident with the end of such offering; and
(iii) the Board or the Committee may provide that if such person first becomes an eligible employee within a specified period of time before the end of the Purchase Period (as defined below) for such Offering, he or she will not receive any
right under that Offering. 
 (c) No employees shall be eligible for the grant of any rights under the Plan if, immediately after any such
rights are granted, such employee owns stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any Affiliate. For purposes of this subparagraph 5(d), the rules of
Section 424(d) of the Code shall apply in determining the stock ownership of any employee, and stock which such employee may purchase under all outstanding rights and options shall be treated as stock owned by such employee. 
 (d) An eligible employee may be granted rights under the Plan only if such rights, together with any other rights granted under “employee stock
purchase plans” of the Company and any Affiliates, as specified by Section 423 (b) (8) 
  

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 of the Code, do not permit such employee’s rights to purchase stock of the Company or any affiliate to accrue at a
rate which exceeds twenty-five thousand dollars ($25,000) of fair market value of such stock (determined at the time such rights are granted) for each calendar year in which such rights are outstanding at any time. 
 6. RIGHTS; PURCHASE PRICE. 
 (a) On each Offering
Date, each eligible employee, pursuant to an offering made under the Plan, shall be granted the right to purchase the number of shares of Common Stock of the Company purchasable with up to fifteen percent (15%) of such employee’s Base
Compensation (as defined in Section 7(a)) during the period which begins on the Offering Date (or such later date as the Board determines for a particular Offering) and ends on the date stated in the Offering, which date shall be no more than
twenty-seven (27) months after the Offering Date (the “Purchase Period”). In connection with each Offering made under this Plan, the Board or the Committee shall specify a maximum number of shares which may be purchased by any
employee as well as a maximum aggregate number of shares which may be purchased by all eligible employees pursuant to such Offering. In addition, in connection with each such Offering, the Board or the Committee may specify a maximum aggregate
number of shares which may be purchased by all eligible employees on any given Exercise Date (as defined in the Offering) under the Offering. If the aggregate purchase of shares upon exercise of rights granted under the Offering would exceed any
such maximum aggregate number, the Board or the Committee shall make a pro rata allocation of the shares available in as nearly a uniform manner as shall be practicable and as it shall deem to be equitable. 
 (b) The purchase price of stock acquired pursuant to rights granted under the Plan shall be equal to ninety-five percent (95%) of the fair market
value of the stock on the last trading day within the Purchase Period. 
 7. PARTICIPATION; WITHDRAWAL; TERMINATION. 
 (a) An eligible employee may become a participant in an Offering by delivering an agreement to the Company within the time specified in the Offering, in
such form as the Company provides. Each such agreement shall authorize payroll deductions of up to fifteen percent (15%) of such employee’s Base Compensation during the Purchase Period. Base Compensation is defined as total cash
compensation exclusive of commissions (other than that of selected sales personnel), bonuses, overtime, allowances, loans, educational assistance and premium pay such as shift differential, but including amounts elected to be deferred by the
employee (that would otherwise have been paid) under the Company’s 401(k) Plan. The payroll deductions made for each participant shall be credited to an account for such participant under the Plan and shall be deposited with the general funds
of the Company. At any time during the 
  

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 Purchase Period a participant may terminate his or her payroll deductions. A participant may reduce, increase or begin
such payroll deductions after the beginning of any Purchase Period only as provided for in the Offering. A participant may not make any additional payments into his or her account unless expressly provided for in the Offering. 
 (b) If a participant terminates his or her payroll deductions, such participant may withdraw from the Offering by delivering to the Company a notice of
withdrawal in such form as the Company provides. Such withdrawal may be elected at any time prior to the end of the Purchase Period. Upon such withdrawal from the offering by a participant, the Company shall distribute to such participant all of his
or her accumulated payroll deductions (reduced to the extent, if any, such deductions have been used to acquire stock for the participant) under the Offering without interest, and such participant’s interest in that Offering shall be
automatically terminated. A participant’s withdrawal from an Offering will have no effect upon such participant’s eligibility to participate in any other Offerings under the Plan but such participant will be required to deliver a new
participation agreement in order to participate in other Offerings under the Plan. 
 (c) Rights granted pursuant to any Offering under the
Plan shall terminate immediately upon cessation of any participating employee’s employment with the Company or an Affiliate, for any reason, and the Company shall distribute to such terminated employee all of his or her accumulated payroll
deductions (reduced to the extent, if any, such deductions have been used to acquire stock for the terminated employee), without interest; provided, however, that subject to the right of the terminated employee to withdraw from the Offering and
receive a distribution of his or her accumulated payroll deductions (as described in paragraph 7(b), in the event that a participating employee’s employment ceases within three (3) months of the next Exercise Date, the balance in such
employee’s account shall be held and used to purchase Common Stock for the terminated employee on such Exercise Date pursuant to the terms of the ongoing Offering. 
 (d) Rights granted under the Plan shall not be transferable, and shall be exercisable only by the person to whom such rights are granted. 
 8. EXERCISE. 
 (a) On each exercise date, as defined in the relevant Offering (an “Exercise
Date”), each participant’s accumulated payroll deductions (without any increase for interest) will be applied to the purchase of whole shares of stock of the Company, up to the maximum number of shares permitted pursuant to the terms of
the Plan and the applicable Offering, at the purchase price specified in the Offering. No fractional shares shall be issued upon the exercise of rights granted under the Plan. The amount, if any, of accumulated payroll deductions 
  

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 remaining in each participant’s account after the purchase of shares which is less than the amount required to
purchase one share of stock on the final Exercise Date of an Offering shall be held in each such participant’s account for the purchase of shares under the next Offering under the Plan, unless such participant withdraws from such next Offering,
as provided in subparagraph 7(b), or is no longer eligible to be granted rights under the Plan, as provided in paragraph 5, in which case such amount shall be distributed to such participant after such Exercise Date, without interest. The amount, if
any, of accumulated payroll deductions remaining in any participant’s account after the purchase of shares which is equal to the amount required to purchase whole shares of stock on the final Exercise Date of an Offering shall be distributed in
full to such participant after such Exercise Date, without interest. 
 (b) No rights granted under the Plan may be exercised to any extent
unless the Plan (including rights granted thereunder) is covered by an effective registration statement pursuant to the Securities Act of 1933, as amended (the “Securities Act”). If, on an Exercise Date of any Offering hereunder, the Plan
is not so registered, no rights granted under the Plan or any Offering shall be exercised and all payroll deductions accumulated during the purchase period shall be distributed to the participants, without interest. 
 9. COVENANTS OF THE COMPANY. 
 (a) During the terms of
the rights granted under the Plan, the Company shall keep available at all times the number of shares of stock required to satisfy such rights. 
 (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 rights granted under the Plan. 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
relieve from any liability for failure to issue and sell stock upon exercise of such rights unless and until such authority is obtained. 
 10. USE OF
PROCEEDS FROM STOCK. 
 Proceeds from the sale of stock pursuant to rights granted under the Plan shall constitute general funds of the
Company. 
  

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 11. RIGHTS AS A STOCKHOLDER. 
 A participant shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to rights granted under the Plan unless and until certificates representing such
shares shall have been issued. 
 12. ADJUSTMENTS UPON CHANGES IN STOCK. 
 (a) If any change is made in the stock subject to the Plan, or subject to any rights 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 Board shall make appropriate adjustments in the maximum number of shares subject to the Plan and the number of
shares and price per share of stock subject to outstanding rights. 
 (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, then, as determined by the Board in its sole discretion, any surviving corporation shall assume outstanding rights or substitute similar rights for those under the Plan, such rights shall continue in full
force and effect, or such rights shall be exercised immediately prior to such event. 
 13. AMENDMENT OF THE PLAN. 
 (a) The Board at any time, and from time to time, may amend the Plan. However, except as provided in paragraph 12 relating to adjustments upon changes in
stock, no amendment shall be effective unless approved by the shareholders of the Company within twelve (12) months before or after the adoption of the amendment, where the amendment will: (i) increase the number of shares reserved for
rights under the Plan; or (ii) modify the provisions as to eligibility for participation in the Plan or modify the Plan in any other way to the extent such modification requires shareholder approval in order for the Plan to obtain employee
stock purchase plan treatment under Section 423 of the Code. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible employees with the maximum benefits provided
or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to employee stock purchase plans and/or to bring the Plan and/or rights granted under it into compliance therewith. 
  

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 (b) Rights and obligations under any rights granted before amendment of the Plan shall not be altered or
impaired by any amendment of the Plan, except with the consent of the person to whom such rights were granted. 
 14. TERMINATION OR SUSPENSION OF THE
PLAN. 
 (a) The Board may suspend or terminate the Plan at any time. No rights may be granted under the Plan while the Plan is suspended
or after it is terminated. 
 (b) Rights and obligations under any rights granted while the Plan is in effect shall not be altered or
impaired by suspension or termination of the Plan, except with the consent of the person to whom such rights were granted. 
 15. EFFECTIVE DATE OF PLAN.

 The Plan shall become effective as determined by the Board, but no rights granted under the Plan shall be exercised unless and until
the Plan has been approved by the vote of the shareholders of the Company, and, if required, an appropriate permit has been issued by the Commissioner of Corporations of the State of California. 
  

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 EXAR CORPORATION 
 EMPLOYEE STOCK PARTICIPATION PLAN OFFERING 
 Adopted August 1, 1989 
 Effective January 1, 1990 
 Amended through August 2, 1991 
 Amended through June 24, 1999 
 Amended through October 1, 2002 
 Amended through April 1, 2006 
 1. GRANT; OFFERING DATE. 
 The Board of Directors of Exar Corporation, a Delaware corporation (the “Company”), pursuant to the Company’s Employee Stock Participation
Plan (the “Plan”), hereby authorizes the grant of rights to purchase shares of the common stock of the Company (“Common Stock”) to all Eligible Employees effective on January 1st, April 1st, July 1st and October 1st of each year beginning with the calendar year 1990 (the “Offering Dates”). Rights granted under this Offering are intended to qualify as options
issued under an “employee stock purchase plan” as that term is defined in Section 423(b) of the Internal Revenue Code of 1986, as amended (the “Code”). The granting of rights pursuant to each Offering hereunder shall occur
on each respective Offering Date unless, prior to such date (a) the Board of Directors determines that such Offering shall not occur, or (b) no shares remain available for issuance under the Plan in connection with the Offering, or
(c) if required, an appropriate permit has not been issued by the Commissioner of Corporations of the State of California covering the rights to be granted and the shares to be issued in connection with the Offering. 
 2. ELIGIBLE EMPLOYEES. 
 All Eligible Employees of the
Company shall be granted rights to purchase Common Stock under each Offering on the Offering Date of such Offering. “Eligible Employees” are employees of the Company whose customary employment with the Company is at least twenty
(20) hours per week; provided that no employee who is disqualified by subparagraph 5(c) or 5(d) of the Plan shall be an Eligible Employee. 
 3.
RIGHTS. 
 Subject to the limitations contained in the Plan, on each Offering Date each Eligible Employee shall be granted the right to
purchase the number of shares of Common Stock purchasable with up to ten percent (10%) of such employee’s Base Compensation (as defined in the Plan) paid during the purchase period for such Offering. The purchase period for each Offering
shall 
  

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 commence on the Offering Date and end on the next to occur of March 31st, June 30th, September 30th or December 31st (the “Purchase Period”). However, no employee may purchase under any given Offering more than two thousand (2,000) shares of Common Stock, and
the maximum aggregate number of shares available to be purchased by all Eligible Employees under any given Offering is sixty thousand (60,000) shares. If the aggregate purchase of shares of Common Stock upon exercise of rights granted under the
offering would exceed the maximum aggregate number of shares available, the Board shall make a pro rata allocation of the shares available in a uniform and equitable manner. 
 4. PURCHASE PRICE. 
 The purchase price of the Common Stock shall be the equal to ninety-five percent
(95%) of the fair market value of the stock, determined, respectively, based on the average of the low and the high price of the Common Stock on the last trading day within the Purchase Period. 
 5. PARTICIPATION. 
 An Eligible Employee shall become
a participant in an Offering by delivering an agreement authorizing payroll deductions of up to ten (10%) of such employee’s Base Compensation during the period for which such authorization is effective. Such deductions may be in whole
percentages or fixed dollar amounts only, and a participant may not make additional payments into his or her account. The agreement shall be in such form as the Company provides, and must be delivered to the Company at least two weeks prior to the
issuance of the first payroll check for the Purchase Period. A participant may increase or decrease his or her participation percentage during a Purchase Period by delivering notice to the Company, in such form as the Company provides, at least two
weeks prior to the issuance of the payroll check for which it is to be effective. A participant may withdraw from an Offering and receive his or her accumulated payroll deductions (reduced to the extent such deductions have been used to acquire
stock for the participant) by delivering a withdrawal notice to the Company in such form as the Company provides. Upon receipt of such notice, the Company will distribute to the participant as soon as practicable such participant’s accumulated
payroll deductions (reduced to the extent such deductions have been used to acquire stock for the participant), without interest. 
 6. TERMINATION.

 Rights granted under the Offering shall terminate immediately upon cessation of any participating employee’s employment with the
Company for any reason prior to end of the Purchase Period of the Offering and the Company will distribute as soon as practicable such terminated employee’s accumulated payroll deductions (reduced to the extent such deductions have been used to
acquire stock for the participant) to him or her, without interest. 
  

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 7. EXERCISE. 
 On each Exercise Date, each participant’s accumulated payroll deductions (without any increase for interest) shall be applied to the purchase of whole shares of Common Stock, up to the maximum number of shares permitted under the Plan
and the Offering. “Exercise Date” shall be defined as each March 31st, June 30th, September 30th and December 31st or the immediately preceding business day if
any such date is not a business day. The amount of accumulated payroll deductions remaining in each participant’s account at the end of a Purchase Period (after the purchase of shares) which is less than the amount required to purchase one
share of stock on the Exercise Date of such Purchase Period shall be held in each such participant’s account for the purchase of shares under the next Offering under the Plan, unless such participant withdraws from such next Offering or is no
longer eligible to be granted rights under the Plan, in which case such amount shall be distributed as soon as practicable to such participant after the end of the Purchase Period, without interest. The amount, if any, of accumulated payroll
deductions remaining in any participant’s account (after the purchase of shares) which is equal to the amount required to purchase whole shares of stock on the Exercise Date shall be distributed as soon as practicable in full to such
participant after the end of each Purchase Period, without interest. 
 8. TRANSFER. 
 Rights granted under each Offering shall not be transferable, and shall be exercisable only by the person to whom such rights are granted. 
 9. NOTICES AND AGREEMENTS. 
 Any notices or agreements
provided for in an Offering or the Plan shall be given in writing, in a form provided by the Company, and unless specifically provided for in the Plan or this Offering shall be deemed effectively given upon receipt or, in the case of notices and
agreements delivered by the Company, five (5) days after deposit in the United States mail, postage prepaid. 
 10. EXERCISE CONTINGENT ON
REGISTRATION OF PLAN AND SHAREHOLDER APPROVAL. 
 No rights granted under an offering may be exercised to any extent unless the Plan
(including rights granted thereunder) is covered by an effective registration statement pursuant to the Securities Act of 1933, as amended. If on an Exercise Date the Plan is not so registered, no rights granted under the Offering shall be exercised
on such date and all payroll deductions accumulated 
  

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 during the Purchase Period (reduced to the extent such deductions have been used to acquire stock under the Offering)
will be distributed to the participants, without interest. 
 11. OFFERING SUBJECT TO PLAN. 
 Each Offering is subject to all the provisions of the Plan, and its provisions are hereby made a part of the Offering, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of an Offering and those of the Plan (including interpretations,
amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan), the provisions of the Plan shall control. 
  

 41996 Non-Employee Directors' Stock Option Plan

 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 
 Amended and Restated September 4, 2003 
 Amended and Restated June 13, 2005 
 Amended and Restated March 22, 2006 
 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 one million two
hundred fifty thousand (1,250,000) 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. 
 (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 fifty four thousand (54,000) shares of the Company’s common stock (subject to adjustment as provided in
paragraph 10 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 twenty two thousand five hundred (22,500) 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 (non-employee), the Annual Grant shall be for twice the number of shares as are granted to other
Non-Employee Directors, or forty five thousand (45,000) shares of the Company’s common stock (subject to adjustment as provided in paragraph 10 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 
  

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 paragraph 6 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. 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 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 6(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 on the date of each annual meeting of stockholders 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. 
  

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 (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 6(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. 
 (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. 
 7. 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. 
  

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 8. 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. 
 9. MISCELLANEOUS. 
 (a) Neither an optionee nor any person to whom an option is transferred under subparagraph 6(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. 
 10. 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. 
  

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 11. AMENDMENT OF THE PLAN. 
 (a) The Board at any time, and from time to time, may amend the Plan. Except as provided in paragraph 10 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. 
 12. 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. 
 13. EFFECTIVE DATE OF PLAN; CONDITIONS OF
EXERCISE. 
 The Plan shall become effective or 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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