Document:

Prepared by MERRILL CORPORATION

Exhibit 10.9  

EXAR CORPORATION  

2000 EQUITY INCENTIVE PLAN  

ADOPTED SEPTEMBER 7, 2000

AMENDED AND RESTATED EFFECTIVE DECEMBER 6, 2000

AMENDED AND RESTATED EFFECTIVE JANUARY 26, 2001

AMENDED AND RESTATED EFFECTIVE JUNE 21, 2001

STOCKHOLDER APPROVAL NOT REQUIRED  

1.  PURPOSES.  

    The persons eligible to receive Stock Awards are the Employees and Consultants of the Company. The purpose of the Plan is to provide a means by which eligible
recipients of Stock Awards may be given an opportunity to benefit from increases in value of the stock of the Company through the granting of (i) Nonstatutory Stock Options, (ii) stock
bonuses and (iii) rights to purchase restricted stock, all as described below. The Plan is also intended to provide a means by which the Company may grant Stock Awards to persons not previously
employed by the Company as an inducement essential to those persons entering employment contracts with the Company. Such inducement grants may be made to persons who ultimately are employed by the
Company as Officers. 

    The
Company, by means of the Plan, seeks to retain the services of persons who are or will become Employees of or Consultants to the Company or an Affiliate, and to provide incentives
for such persons to exert maximum efforts for the success of the Company and its Affiliates. 

    The
Company intends that the Stock Awards issued under the Plan shall, in the discretion of the Board or any Committee to which responsibility for administration of the Plan has been
delegated pursuant to subsection 3(c), be either (i) Options granted pursuant to Section 6 hereof or (ii) stock bonuses or rights to purchase restricted stock granted pursuant to
Section 8 hereof. 

2.  DEFINITIONS.  

    (a) "Affiliate" means any parent corporation or subsidiary corporation of the Company, whether now or hereafter
existing, as those terms are defined in Sections 424(e) and (f) respectively, of the Code. 

    (b) "Board" means the Board of Directors of the Company. 

    (c) "Code" means the Internal Revenue Code of 1986, as amended. 

    (d) "Committee" means a committee or subcommittee appointed by the Board
in accordance with subsection 3(c) of the Plan. 

    (e) "Company" means Exar Corporation, a Delaware corporation. 

    (f)  "Consultant" means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting services and who is compensated for such services. 

    (g) "Continuous Service" means that the service of an individual to the
Company, whether as an Employee, Officer, Director or Consultant, is not interrupted or terminated. The Board or the Committee may determine, in that party's sole discretion, whether Continuous
Service shall be considered interrupted in the case of any leave of absence approved by the Board or the Committee, including sick leave, military leave, or any other personal leave. Continuous
Service shall not be deemed to have terminated merely because of a change in the capacity in which a person renders
service to the Company or an Affiliate, whether such service is as an Employee, Officer, Director or Consultant or a change in the entity for which the person renders such service, provided that there
is no interruption in the person's service relationship with the Company or an Affiliate. 

 

    (h) "Director" means a member of the Board. 

    (i)  "Employee" means any person employed by the Company or any
Affiliate of the Company. Mere service as a Director or payment of a Director's fee by the Company or an Affiliate shall not be sufficient to constitute "employment" by the Company or an Affiliate. 

    (j)  "Exchange Act" means the Securities Exchange Act of 1934, as
amended. 

    (k) "Fair Market Value" means, as of any date, the lower of
(1) the last quoted per share selling price for the Company's Common Stock on the Nasdaq National Market on the relevant date; or (2) the arithmetic mean of the highest and lowest quoted
selling prices on the Nasdaq National Market on the relevant date. If there were no sales on such date, then "Fair Market Value" means on the nearest trading day before the lower of (1) the
last quoted per share selling price for the Company's Common Stock on the Nasdaq National Market; or (2) the arithmetic mean of the highest and lowest quoted selling prices on the Nasdaq
National Market. 

    Notwithstanding
the preceding, for federal, state, and local income tax purposes, fair market value shall be determined by the Board (or its delegate) in accordance with uniform and
nondiscriminatory standards adopted from time to time. 

    (l)  "Non-Employee Director" means a Director who either
(i) is not a current Employee or Officer of the Company or its parent or subsidiary, does not receive compensation (directly or indirectly) from the Company or its parent or subsidiary for
services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K
promulgated pursuant to the Securities Act ("Regulation S-K")), does not possess an interest in any other transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K, and is not engaged in a business relationship as to which disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a "non-employee director" for purposes of Rule 16b-3. 

    (m) "Nonstatutory Stock Option" means a stock option not intended to
qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 

    (n) "Officer" means a person who possesses the authority of an "officer"
as that term is used in Rule 4460(i)(1)(A) of the Rules of the National Association of Securities Dealers, Inc. For purposes of the Plan, a person in the position of "Vice President" or
higher shall be classified as an "Officer" unless the Board or Committee expressly finds that such person does not possess the authority of an "officer" as that term is used in
Rule 4460(i)(1)(A) of the Rules of the National Association of Securities Dealers, Inc. 

    (o) "Option" means a Nonstatutory Stock Option granted pursuant to the
Plan. 

    (p) "Option Agreement" means a written agreement between the Company and
an Optionholder evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan. 

    (q) "Optionholder" means a person to whom an Option is granted pursuant
to the Plan or, if applicable, such other person who holds an outstanding Option. 

    (r) "Plan" means this 2000 Equity Incentive Plan. 

    (s) "Rule 16b-3" means Rule 16b-3
of the Exchange Act or any successor to Rule 16b-3, as in effect with respect to the Company at the time discretion is being exercised regarding the Plan. 

    (t) "Securities Act" means the Securities Act of 1933, as amended. 

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    (u) "Stock Award" means any right granted under the Plan, including any
Option, any stock bonus, and any right to purchase restricted stock. 

    (v) "Stock Award Agreement" means a written agreement between the
Company and a holder of a Stock Award evidencing the terms and conditions of an individual Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan. 

3.  ADMINISTRATION.  

    (a) The Plan shall be administered by the Board unless and until the Board delegates administration to a Committee, as
provided in subsection 3(c). 

    (b) The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan: 

    (1) To determine from time to time which of the persons eligible under the Plan shall be granted Stock Awards; when and
how each Stock Award shall be granted; whether a Stock Award will be an Option, a stock bonus, a right to purchase restricted stock, or a combination of the foregoing; the provisions of each Stock
Award granted (which need not be identical), including the time or times when a person shall be permitted to receive stock pursuant to a Stock Award; and the number of shares with respect to which a
Stock Award shall be granted to each such person. 

    (2) To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement, in a manner and to the
extent it shall deem necessary or expedient to make the Plan fully effective. 

    (3) To amend the Plan or a Stock Award as provided in Section 13. 

    (4) To terminate or suspend the Plan as provided in Section 14. 

    (5) 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 which are not in conflict with the provisions of the Plan. 

    (c) The Board may delegate administration of the Plan to a committee of the Board composed of two (2) or more
members (the "Committee"), all of the members of which Committee may be, in the discretion of the Board, Non-Employee Directors. 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, including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be to the Committee or such a subcommittee), 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.
In addition, notwithstanding anything in this Section 3 to the contrary, the Board or the Committee may delegate to a subcommittee of one or more members of the Board the authority to grant
Stock Awards to eligible persons who are not then subject to Section 16 of the Exchange Act. 

4.  SHARES SUBJECT TO THE PLAN.  

    (a) Subject to the provisions of Section 12 relating to adjustments upon changes in stock, the stock that may be
issued pursuant to Stock Awards shall not exceed in the aggregate four million two hundred thousand (4,200,000) shares of the Company's Common Stock. If any Stock Award shall for any reason expire or
otherwise terminate, in whole or in part, without having been exercised in full, the 

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stock not acquired under such Stock Award shall revert to and again become available for issuance under the Plan. 

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

5.  ELIGIBILITY.  

    (a) Stock Awards may be granted only to Employees or Consultants. 

    (b) The aggregate number of shares issued pursuant to Stock Awards granted to Officers shall not exceed forty percent
(40%) of the number of shares reserved for issuance under the Plan, as determined at the time of each such issuance to an Officer, except that there shall be excluded from this calculation shares
issued to Officers not previously employed by the Company pursuant to Stock Awards granted as an inducement essential to such individuals entering into employment relationships with the Company. 

    (c) A Consultant shall not be eligible for the grant of a Stock Award if, at the time of grant, a
Form S-8 Registration Statement under the Securities Act ("Form S-8") is not available to register either the offer or the sale of the Company's securities to
such Consultant because of the nature of the services that the Consultant is providing to the Company, or because the Consultant is not a natural person, or as otherwise provided by the rules
governing the use of Form S-8, unless the Company determines both (i) that such grant (A) shall be registered in another manner under the Securities Act
(e.g., on a Form S-3 Registration Statement) or (B) does not require registration under the Securities Act in order to comply
with the requirements of the Securities Act, if applicable, and (ii) that such grant complies with the securities laws of all other relevant jurisdictions. 

6.  OPTION PROVISIONS.  

    Each Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. The provisions of separate Options need not
be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions: 

    (a) Term. No Option shall be exercisable after the expiration of ten
(10) years from the date it was granted. 

    (b) Price. Except as otherwise provided in Section 7 of the Plan,
the exercise price of each Option shall be not less than one hundred percent (100%) of the Fair Market Value of the stock subject to the Option on the date of grant. 

    (c) Consideration. The purchase price of stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the time the Option is exercised, or (ii) at the discretion of the Board or
the Committee, at the time of the grant of the Option, (A) by delivery to the Company of other common stock of the Company, (B) according to a deferred payment arrangement (however, in
the event the Company is then incorporated in the state of Delaware, then payment of the common stock's "par value" as defined in the Delaware General Corporation Law shall not be made by deferred
payment), or other arrangement (which may include, without limiting the generality of the foregoing, the use of other common stock of the Company) with the person to whom the Option is granted or to
whom the Option is transferred pursuant to subsection 6(d) or (C) in any other form of legal consideration that may be acceptable to the Board. Unless otherwise specifically provided in the
Option, the purchase price of common stock of the Company
acquired pursuant to an Option that is paid by delivery to the Company of other Company common stock acquired directly or indirectly from the Company, shall be paid only by shares of common stock of
the Company that have been held for more than six (6) months (or such longer or shorter period of 

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time required to avoid a charge to earnings for financial accounting purposes). In the case of any deferred payment arrangement, interest shall be compounded at least annually and shall be charged at
the minimum rate of interest necessary to avoid the treatment as interest, under any applicable provisions of the Code, of any amounts other than amounts stated to be interest under the deferred
payment arrangement. 

    (d) Transferability. An Option shall not be transferable except by will
or by the laws of descent and distribution, and shall be exercisable during the lifetime of the person to whom the Option is granted only by such person; provided, however, that an Option may be
transferred to the extent provided in the Option Agreement. The person to whom the Option is granted may, but need not, designate, by delivering written notice of the same to the Company (in a form
acceptable to the Company) during such person's lifetime, a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option and receive any and all
proceeds thereof. If no such designation is made during the Optionholder's lifetime, the estate or the person to whom the Option is transferred by will or by the laws of descent and distribution
shall, in the event of the death of the Optionholder, thereafter be entitled to exercise the Option and receive any and all proceeds thereof. 

    (e) Vesting. The total number of shares of stock subject to an Option
may, but need not, be allotted in periodic installments (which may, but need not, be equal). From time to time during each of such installment periods, the Option may become exercisable ("vest") with
respect to some or all of the shares allotted to that period, and may be exercised with respect to some or all of the shares allotted to such period and/or any prior period as to which the Option was
not fully exercised. During the remainder of the term of the Option (if its term extends beyond the end of the installment periods), the Option may be exercised from time to time with respect to any
shares then remaining subject to the Option. The provisions of this subsection 6(e) are subject to any Option provisions governing the minimum number of shares as to which an Option may be exercised. 

    (f)  Termination of Employment or Relationship as a Director or
Consultant. In the event an Optionholder's Continuous Service terminates (other than upon the Optionholder's death or disability), the Optionholder may exercise the Option (to
the extent that the Optionholder was entitled to exercise it as of the date of termination) but only within such period of time ending on the earlier of (i) the date three (3) months
following the termination of the Optionholder's Continuous Service (or such longer or shorter period as specified in the Option Agreement), or (ii) the expiration of the term of the Option as
set forth in the Option Agreement; provided, however, if the Optionholder is terminated for cause, then the Option shall terminate on the date Optionholder's Continuous Service ceases. If, at the date
of termination, the Optionholder is not entitled to exercise the entire Option, the shares covered by the unexercisable portion of the Option shall revert to and again become available for issuance
under the Plan. If, after termination, the Optionholder does not exercise the Option within the time specified in
the Option Agreement, the Option shall terminate, and the shares covered by such Option shall revert to and again become available for issuance under the Plan. 

    An
Optionholder's Option Agreement may also provide that if the exercise of the Option following the termination of the Optionholder's Continuous Service (other than upon the
Optionholder's death or disability) would result in liability under Section 16(b) of the Exchange Act, then the Option shall terminate on the earlier of (i) the expiration of the term of
the Option set forth in the Option Agreement, or (ii) the tenth (10th) day after the last date on which such exercise would result in such liability under Section 16(b) of the Exchange
Act. Finally, an Optionholder's Option Agreement may also provide that if the exercise of the Option following the termination of the Optionholder's Continuous Service (other than upon the
Optionholder's death or disability) would be prohibited at any time solely because the issuance of shares would violate the registration requirements under the Securities Act, then the Option shall
terminate on the earlier of (i) the expiration of the term of the Option set forth in the first paragraph of this subsection 6(f), or (ii) the expiration of a period of three 

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(3) months after the termination of the Optionholder's Continuous Service during which the exercise of the Option would not be in violation of such registration requirements. 

    (g) Disability of Optionholder. In the event an Optionholder's
Continuous Service terminates as a result of the Optionholder's disability, the Optionholder may exercise the Option (to the extent that the Optionholder was entitled to exercise it as of the date of
termination), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination (or such longer or shorter period specified in the
Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, at the date of termination, the Optionholder is not entitled to exercise the entire
Option, the shares covered by the unexercisable portion of the Option shall revert to and again become available for issuance under the Plan. If, after termination, the Optionholder does not exercise
the Option within the time specified herein, the Option shall terminate, and the shares covered by such Option shall revert to and again become available for issuance under the Plan. 

    (h) Death of Optionholder. In the event of the death of an Optionholder
during, or within a period specified in the Option Agreement after the termination of, the Optionholder's Continuous Service, the Option may be exercised (to the extent the Optionholder was entitled
to exercise the Option as of the date of death) by the Optionholder's estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise
the Option upon the Optionholder's death pursuant to subsection 6(d), but only within the period ending on the earlier of (i) the date eighteen (18) months following the date of death
(or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of such Option as set forth in the Option Agreement. If, at the time of death, the
Optionholder was not entitled to exercise the entire Option, the shares covered by the unexercisable portion of the Option shall revert to and again become available for issuance under the Plan. If,
after death, the Option is not exercised within the time specified herein, the Option shall terminate, and the shares covered by such Option shall revert to and again become available for issuance
under the Plan. 

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   7.  DEFERRED SALARY GRANTS.  

    (a) Any Employee who is selected by the Board or Committee ("Deferral Participant") may elect to apply a portion of his
or her base salary, in an amount equal to at least five thousand dollars ($5,000) but in no event more than fifty thousand dollars ($50,000), to the acquisition of an Option to purchase shares of the
Company's common stock pursuant to the terms of this Section 7 ("Deferred Salary Option"). Such election is irrevocable and must be filed with the Company prior to the commencement of the
calendar year in which the base salary to be deferred is earned. Notwithstanding the foregoing, a newly hired, elected or appointed Deferral Participant may file an irrevocable election with the
Company within thirty (30) days of the date the Deferral Participant commences employment with the Company. 

    Each
Deferral Participant who files such a timely election shall automatically be granted an Option under this Section 7 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 hired Deferral Participant, the first trading day of the month following the month the Deferral Participant
files such election. 

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

X=
A / (B × 662/3%), where

X is the number of Option shares,

A is the maximum amount of base salary subject to the deferral election, and

B is the Fair Market Value per share of the common stock on the Option grant date. 

    (c) The purchase price per share of common stock of the Company for the shares to be purchased pursuant to the exercise
of any Deferred Salary Option shall be thirty three and one third percent (331/3%) of the fair market value of the Company's common stock on the date such Deferred Salary Option is
granted. 

    (d) Each Deferred Salary Option shall vest (become exercisable) equally over the twelve (12) month period that is
the calendar year in which salary is deferred, and shall terminate on the earlier of (i) ten (10) years from the date the Option was granted, or (ii) three (3) years
following termination of the Deferral Participant's employment with the Company or an Affiliate. If the Deferred Salary Option is not exercised during the applicable period, it shall be deemed to have
been forfeited and of no further force or effect. 

8.  TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK.  

    Each stock bonus or restricted stock purchase agreement shall be in such form and shall contain such terms and conditions as the Board or the Committee shall
deem appropriate. The terms and conditions of stock bonus or restricted stock purchase agreements may change from time to time, and the terms and conditions of separate agreements need not be
identical, but each stock bonus or restricted stock purchase agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each of
the following provisions as appropriate: 

    (a) Purchase Price.  The purchase price under each
restricted stock purchase agreement shall be such amount as the Board or Committee shall determine and designate in such Stock Award Agreement. Notwithstanding the foregoing, the Board or the
Committee may determine that eligible participants in the Plan may be awarded stock pursuant to a stock bonus agreement in consideration for past services actually rendered to the Company or for its
benefit. 

    (b) Transferability.  No rights under a stock bonus or
restricted stock purchase agreement shall be transferable by any participant under the Plan, either voluntarily or by operation of law, except 

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where such assignment is required by law or expressly authorized by the terms of the applicable Stock Award Agreement. 

    (c) Consideration.  The purchase price of stock acquired
pursuant to a stock purchase agreement shall be paid either: (i) in cash at the time of purchase; (ii) at the discretion of the Board or the Committee, according to a deferred payment
arrangement or other arrangement with the person to whom the stock is sold; or (iii) in any other form of legal consideration that may be acceptable to the Board or the Committee in its
discretion. Notwithstanding the foregoing, the Board or the Committee to which administration of the Plan has been delegated may award stock pursuant to a stock bonus agreement in consideration for
past services actually rendered to the Company or for its benefit. 

    (d) Vesting.  Shares of stock sold or awarded under the
Plan may, but need not, be subject to a repurchase option in favor of the Company in accordance with a vesting schedule to be determined by the Board or the Committee. 

    (e) Termination of Employment or Relationship as a Director or
Consultant. In the event an Optionholder's Continuous Service terminates, the Company may repurchase or otherwise reacquire any or all of the shares of stock
held by that person which have not vested as of the date of termination under the terms of the stock bonus or restricted stock purchase agreement between the Company and such person. 

9.  COVENANTS OF THE COMPANY.  

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

    (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 Stock Award; provided, however, that this undertaking shall not require the Company to register under the Securities
Act either the Plan, any Stock Award granted under the Plan or any stock issued or issuable pursuant to any such Stock Award. 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 Stock Awards unless and until such authority is obtained. 

10.  USE OF PROCEEDS FROM STOCK.  

    Proceeds from the sale of stock pursuant to Stock Awards shall constitute general funds of the Company. 

11.  MISCELLANEOUS.  

    (a) The Board shall have the power to accelerate the time at which a Stock Award may first be exercised or the time
during which a Stock Award or any part thereof will vest, notwithstanding the provisions in the Stock Award stating the time at which it may first be exercised or the time during which it will vest. 

    (b) No Employee, Director or Consultant or any person to whom a Stock Award is transferred under subsection 6(d) or 8(b)
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 Stock Award unless and until such person has satisfied all requirements for
exercise of the Stock Award pursuant to its terms. 

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    (c) Nothing in the Plan or any instrument executed or Stock Award granted pursuant thereto shall confer upon any
Employee or Consultant or other holder of Stock Awards any right to continue to serve the Company or any Affiliate in the capacity in effect at the time the Stock Award was granted or shall affect the
right of the Company or any Affiliate to terminate (i) the employment of any Employee with or without cause, or (ii) the service of a Consultant subject to the terms of such Consultant's
agreement with the Company or any Affiliate. In the event that a holder of Stock Awards is permitted or otherwise entitled to take a leave of absence, the Board or Committee shall have the unilateral
right to (i) determine whether such leave of absence will be treated as a termination of employment or relationship as consultant for purposes of the Plan and corresponding provisions of any
outstanding Stock Awards, and (ii) suspend or otherwise delay the time or times at which the shares subject to the Stock Awards would otherwise vest. The status of any person as an eligible
Employee or Consultant shall not be construed as a commitment that any Stock Award will be granted under the Plan to such eligible Employee or Consultant, or to eligible Employees or Consultants
generally. 

    (d) Payments and other benefits received by an Optionholder under the Plan or under an Option granted pursuant to the
Plan shall not be deemed a part of an Optionholder's regular, recurring compensation for purposes of the termination, indemnity or severance pay law of any country and shall not be included in, nor
have any effect on, the determination of benefits under any other employee benefit plan, contract or similar arrangement provided by the Company or a Group Company, unless expressly so provided by
such other plan, contract or arrangement, or unless the Board expressly determines that an Option or portion of an Option should be included to reflect competitive compensation practices or to
recognize that an Option has been granted in lieu of a portion of competitive cash compensation. 

    (e) The Company may require any person to whom a Stock Award is granted, or any person to whom a Stock Award is
transferred pursuant to subsection 6(d) or 8(b), as a condition of exercising or acquiring stock under any Stock Award, (1) to give written assurances satisfactory to the Company as to such
person's knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial
and business matters, and that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the Stock Award; and (2) to give written assurances satisfactory to the Company stating that such person is acquiring the stock
subject to the Stock Award for such person's own account and not with any present intention of selling or otherwise distributing the stock. The foregoing 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, 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. 

    (f)  To the extent provided by the terms of a Stock Award Agreement, the person to whom a Stock Award is granted may
satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of stock under a Stock Award by any of the following means or by a combination of such means:
(1) tendering a cash payment; (2) authorizing the Company to withhold shares from the shares of the common stock otherwise issuable to the participant as a result of the exercise or
acquisition of stock under the Stock Award; or (3) delivering to the Company owned and unencumbered shares of Company common stock. Notwithstanding the foregoing, the Company shall not be
authorized to withhold shares of Common Stock at rates in excess of the minimum statutory withholding rates for federal and state tax purposes, including payroll taxes. 

12.  ADJUSTMENTS UPON CHANGES IN STOCK.  

    (a) If
any change is made in the stock subject to the Plan, or subject to any Stock Award (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in 

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property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by
the Company), the Plan shall automatically be adjusted as appropriate in the type(s) and maximum number of securities subject to the Plan pursuant to subsection 4(a) and the outstanding Stock Awards
will be appropriately adjusted in the type(s) and number of securities and price per share of stock subject to such outstanding Stock Awards. (The conversion of any convertible securities of the
Company shall not be treated as a "transaction not involving the receipt of consideration by the Company.") 

    (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 Stock Awards shall become vested and exercisable in full for a period of at least
ten (10) days. Outstanding Stock Awards that have not been exercised prior to such event shall terminate on the date of such event unless assumed by a successor corporation. 

13.  AMENDMENT OF THE PLAN AND STOCK AWARDS.  

    (a) The Board at any time, and from time to time, may amend the Plan. However, except as provided in Section 12
relating to adjustments upon changes in stock, no amendment shall be effective unless approved by the stockholders of the Company to the extent stockholder approval is necessary for the Plan to
satisfy the requirements of Rule 16b-3 of the Exchange Act or any Nasdaq or securities exchange listing requirements. 

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

    (c) The Board at any time, and from time to time, may amend the terms of any one or more Stock Award; provided, however,
that the rights and obligations under any Stock Award shall not be impaired by any such amendment unless (i) the Company requests the consent of the person to whom the Stock Award was granted
and (ii) such person consents in writing. 

14.  TERMINATION OR SUSPENSION OF THE PLAN.  

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

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

15.  EFFECTIVE DATE OF PLAN.  

    The Plan shall become effective on the date on which it is adopted by the Board. 

10Prepared by MERRILL CORPORATION

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Exhibit 10.10  

EXECUTIVE EMPLOYMENT AGREEMENT  

    This
EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the      day of December, 2000 (the "Effective
Date"), by and between EXAR CORPORATION, a Delaware corporation (the "Company"), and DONALD L. CIFFONE,
JR. ("Executive"). 

    WHEREAS, the Company desires to continue to employ Executive to provide executive management services to the Company and wishes to
provide Executive with certain compensation and benefits in return for Executive's continued services; and 

    WHEREAS, Executive wishes to continue to be employed by the Company and provide executive management services to the Company in return
for certain compensation and benefits; 

    NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, it is hereby agreed by and between the parties
hereto as follows: 

 
 

ARTICLE 1    
    
    DEFINITIONS    
  

    For purposes of the Agreement, the following terms are defined as follows: 

    1.1  "Board" means the Board of Directors of the Company. 

    1.2  "Cause" means misconduct, including: (i) conviction of any felony or any crime involving
moral turpitude or dishonesty; (ii) participation in a fraud or act of dishonesty against the Company; (iii) willful breach of the Company's policies; (iv) intentional damage to
the Company's property; (v) a material breach of the Proprietary Rights and Nondisclosure Agreement dated October 21, 1996, between the Company and Executive; or (vi) conduct
which in the good faith and reasonable determination of the Board demonstrates unacceptable job performance or unfitness to serve. Physical or mental disability shall not constitute "Cause." 

    1.3  "Change of Control" means (i) a merger or consolidation in which the Company is not the
surviving corporation; (ii) 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; (iv) 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, and in each case
Executive is not offered a similar executive level position with the surviving entity. 

    1.4  "Change of Control Plan" means the Exar Corporation Executive Officers' Change of Control Severance
Benefit Plan, adopted effective as of June 24, 1999 by the Company for the benefit of certain of its eligible executive employees. 

    1.5  "Code" means the Internal Revenue Code of 1986, as amended. 

    1.6  "Common Stock" means the common stock of the Company. 

    1.7  "Company" means Exar Corporation, a Delaware corporation, or, following a Change of Control, the
surviving entity resulting from such transaction. 

    1.8  "Consulting Agreement" means the Consulting Agreement entered into by and between the Company and
Executive, substantially in the form attached hereto as Exhibit A. Service under the Consulting Agreement shall commence as of the termination of Executive's employment with the Company,
provided that such termination is not for Cause, and further provided that such termination is not covered by Section 4.2 hereof. 

 

    1.9  "Executive Incentive Program" means the Executive Incentive Compensation Program maintained by the
Company for the benefit of its eligible executive employees. 

    1.10  "Fiscal Year" means the twelve (12) month period ending on each March 31. 

    1.11  "Good Reason" means any one of the following events which occurs within thirteen (13) months
after the effective date of a Change of Control: (i) any reduction of Executive's rate of total compensation (including base salary and stock options); (ii) any material reduction in the
package of welfare benefit plans, taken as a whole, provided to Executive (except that the terms of benefits, including without limitation employee contributions, may be changed to the extent required
by third party providers) or any action by the Company that would materially adversely affect Executive's participation or materially reduce Executive's benefits under any of such plans;
(iii) any material change in Executive's responsibilities, duties, authority, title, reporting relationship or offices resulting in any diminution of position (including, but not limited to, a
change of responsibility from company-wide responsibility to division-level responsibility); (iv) request that Executive relocate to a worksite that is both more than
thirty-five (35) miles from Executive's prior worksite and more than thirty-five (35) miles from Executive's personal residence (as of the Effective Date), unless
Executive accepts such relocation opportunity; (v) failure or refusal of a successor to the Company to assume the Company's obligations under this Agreement; or (vii) material breach by
the Company or any successor to the Company of any of the material provisions of this Agreement. 

 
 

ARTICLE 2    
    
    EMPLOYMENT BY THE COMPANY    
  

    2.1  Position and Duties.  Subject to the terms set forth herein, the Company agrees to continue to
employ Executive in the position of President and Chief Executive Officer, and Executive hereby accepts such employment. Executive shall serve in an executive capacity, shall continue to perform such
duties as are customarily associated with the position of President and Chief Executive Officer and such other duties as are assigned to Executive by the Board, and shall report solely and directly to
the Board. During the term of this Agreement, Executive shall devote his best efforts and substantially all of his business time and attention (except for vacation periods as set forth herein and
reasonable
periods of illness or other incapacities permitted by the Company's general employment policies or as otherwise set forth in this Agreement) solely to the business of the Company. 

    2.2  Term.  The term of this Agreement shall commence on the Effective Date and shall continue until the
earlier of (i) the termination of Executive's employment with the Company or (ii) March 31, 2004. Within a reasonable period of time prior to September 30, 2003, provided
that Executive's employment has not then terminated, Executive and the Company shall commence negotiations in order to determine, no later than September 30, 2003, whether to renew this
Agreement immediately following its scheduled termination date on March 31, 2004 or to continue Executive's employment without a written agreement; provided,
however, that a failure to renew this Agreement shall in no way prevent either the continuation of this Agreement through March 31, 2004 or the continuation of the
employment relationship beyond such date without a written agreement. Executive's service under the Consulting Agreement shall commence as of the termination of Executive's employment with the
Company, provided that his employment is not terminated for Cause, and further provided that such termination is not covered by either Section 4.1 or 4.2 hereof. 

    2.3  Employment at Will.  Executive's employment is at will, and both the Company and Executive shall
have the right to terminate, with written notice, Executive's employment with the Company at any time, and for any reason, with or without Cause. If Executive's employment with the Company is
terminated, Executive shall be eligible to receive severance benefits only to the extent provided in Article 4 of this Agreement. 

2

 

    2.4  Employment Policies.  The employment relationship between the parties shall also be governed by the
general employment policies and practices of the Company, including those relating to protection of confidential information and assignment of inventions, except that to the extent that the terms of
this Agreement differ from or are in conflict with the Company's general employment policies or practices, this Agreement shall control. 

 
 

ARTICLE 3    
    
    COMPENSATION    
  

    3.1  Base Salary.  Executive shall receive for continued employment with the Company, during the term of
this Agreement, a base salary at an annual (July 1-June 30) rate of six hundred fifteen thousand dollars
($615,000), payable in equal installments on the regular payroll dates of the Company, which payroll dates shall occur at least twice monthly, subject to applicable tax withholding. Such base salary
(the "Annual Base Salary") shall be subject to increase as determined by the Board during the annual focal review period. 

    3.2  Incentive Compensation Payment.  During the term of this Agreement, Executive shall be eligible to
receive an annual target incentive compensation payment for each Fiscal Year, beginning with the Fiscal Year ending March 31, 2002, and continuing through and including the Fiscal Year ending
March 31, 2004, the amount of which incentive compensation payment shall be determined pursuant to the terms and conditions of the Company's Executive Incentive Program based on a target award
percentage equal to seventy-five percent (75%). 

    3.3  Stock Option Grant.  The Board shall grant to Executive (i) on the Effective Date an option
to purchase three hundred thousand (300,000) shares of Common Stock with an exercise price to be determined by the Board equal to the fair market value of Common Stock on the Effective Date, which
option shall vest on each monthly anniversary date of the Effective Date as to 1/36 of the shares of Common Stock, and (ii) on each April 1 following the Effective Date,
beginning with April 1, 2001, and continuing through and including April 1, 2003, an option to purchase one hundred thousand (100,000) shares of Common Stock with an exercise price to be
determined by the Board equal to the fair market value of Common Stock on the relevant April 1, which option shall vest on each monthly anniversary date of the relevant April 1 as to
1/36 of the shares of Common Stock subject to the option. Grants pursuant to the preceding clause (ii) shall be subject to appropriate adjustment in the event of a change to the
Company's Common Stock without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transactions not involving the receipt of consideration by the Company).
Options granted pursuant to this Section 3.3 shall be granted under, and shall be subject to the terms of, the Company's 2000 Equity Incentive Plan and Executive's Stock Option Agreement
thereunder. 

    3.4  Professional Services.  The Company shall, during the term of this Agreement, reimburse Executive in
an amount not to exceed ten thousand dollars ($10,000) per Fiscal Year for documented costs incurred by Executive for obtaining professional services, including, but not limited to, legal, tax
planning, accounting and investment services. 

    3.5  Standard Company Benefits.  During the term of this Agreement, Executive shall be entitled to all
rights and benefits for which he is eligible under the terms and conditions of the standard Company benefits and compensation practices that may be in effect from time to time and are provided by the
Company to its executive employees generally, including health, disability, life and 

3

 

accidental death insurance coverage. In addition, Executive shall be entitled to receive the following benefits during the term of this Agreement: 

    (a) the Company shall provide Executive with four (4) weeks' paid vacation for each Fiscal Year (plus paid
holidays), which Executive may take in accordance with the Company's standard policy regarding vacation time; 

    (b) the Company shall provide Executive with life insurance coverage pursuant to a term life insurance policy in an
amount equal to one million dollars ($1,000,000). 

    (c) the Company shall provide Executive with a monthly automobile allowance equal to three thousand dollars ($3,000);
and 

    (d) the Company, pursuant to the terms and conditions of the Company's Executive Health Plan, shall reimburse Executive
up to ten thousand dollars ($10,000) for each Fiscal Year for the documented cost of covered medical expenses, without the need for any contribution by Executive. 

    3.6  Employment Beyond Termination Date of this Agreement.  Sections 3.4 and 3.5 shall continue to apply
to Executive for so long as he is employed by the Company, whether or not pursuant to this Agreement. 

 
 

ARTICLE 4    
    
    SEVERANCE AND CHANGE OF CONTROL BENEFITS    
  

    4.1  Severance Benefits for Certain Terminations Without Regard to Change of Control.  If Executive's
employment is terminated by the Company without Cause during the term of this Agreement and prior to the effective date of a Change of Control, Executive shall, within thirty (30) days
following the date on which the Release described in Section 4.3 becomes effective in accordance with its terms, receive the following severance benefits: (i) a lump sum payment equal to
the sum of Executive's Annual Base Salary as in effect during the last regularly scheduled payroll period immediately preceding the termination of Executive's employment plus an additional amount
equal to (A) if Executive's employment is terminated prior to October 1, the greater of the incentive compensation payment actually paid to Executive under the Executive Incentive
Program for the last Fiscal Year ending with or prior to the termination date of Executive's employment or the target incentive compensation
payment for such last Fiscal Year, or (B) if Executive's employment is terminated on or after October 1, the greater of the target incentive compensation payment that Executive could
become entitled to receive under the Executive Incentive Program for the Fiscal Year in which Executive's employment is terminated or the incentive compensation payment actually paid to Executive
under the Executive Incentive Program for the last Fiscal Year ending with or prior to the termination date of Executive's employment, such lump sum payment to be subject to applicable tax
withholding; and (ii) Executive shall be credited with twelve (12) months of additional vesting under all unvested outstanding options to purchase Common Stock then held by Executive,
and all options held by Executive shall be exercisable for up to fifteen (15) months following the termination of Executive's employment. For purposes of clause (ii) in the preceding
sentence, Executive shall receive the option vesting credit and continued option exercisability therein provided only if Executive has executed the Consulting Agreement, and in the event of
termination of the Consulting Agreement for any reason, such vesting credit shall cease and continued option exercisability shall be determined solely in accordance with the terms of grant of the then
outstanding vested options. 

    4.2  Severance Benefits for Certain Terminations Within Thirteen (13) Months Following Change of Control.  

     (a)  Severance Benefits.  If Executive's employment is terminated by the Company without Cause or by the Executive for Good
Reason, in either case within thirteen (13) months following 

4

 

the effective date of a Change of Control and during the term of this Agreement, Executive shall, within thirty (30) days following the date on which the Release described in Section 4.3
becomes effective in accordance with its terms, receive the following severance benefits: (i) a lump sum payment equal to two (2) times the sum of Executive's Annual Base Salary as in
effect during the last regularly scheduled payroll period immediately preceding the termination date of Executive's employment plus an additional amount equal to (A) if Executive's employment
is terminated prior to October 1, the greater of the incentive compensation payment actually paid to Executive under the Executive Incentive Program for the last Fiscal Year ending with or
prior to the termination date of Executive's employment or the target incentive compensation payment for such last Fiscal Year, or (B) if Executive's employment is terminated on or after
October 1, the greater of the target incentive compensation payment that Executive could become entitled to receive under the Executive Incentive Program for the Fiscal Year in which
Executive's employment is terminated or the incentive compensation payment actually paid to Executive under the Executive Incentive Program for the last Fiscal Year ending with or prior to the
termination date of Executive's employment, such lump sum payment to be subject to applicable tax withholding; and (ii) the vesting and exercisability of all unvested outstanding options to
purchase Common Stock then held by Executive shall be fully accelerated. 

    (b)  Tax Gross-Up Payment.  In the event it shall be determined, either by the Company or by
a final determination of the Internal Revenue Service, that any payment, distribution or benefit by or from the Company to or for the benefit of Executive pursuant to Section 4.2(a) or
otherwise (the "Payment") would cause Executive to become subject to the excise tax imposed by Section 4999 of the Code (the
"Excise Tax"), then the Company shall pay to or for the benefit of Executive, within the later of ninety (90) days of the termination date of Executive's employment or ninety (90) days
of the date of determination referred to above, an additional amount (the "Gross-Up Payment") in an amount that shall fund the payment by Executive of any Excise Tax on the Payment, as
well as any income taxes imposed on the Gross-Up Payment, any Excise Tax imposed on the Gross-Up Payment and any interest or penalties imposed with respect to taxes on the
Gross-Up Payment or any Excise Tax. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to pay federal, state and local income taxes at
the highest nominal marginal rate of such federal, state and local income taxation in the calendar year in which the Gross-Up Payment is due, net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local taxes. In the event that the Excise Tax is subsequently determined to be less than the amount taken into account to determine the
amount of the Gross-Up Payment, then Executive shall repay to the Company at that time the portion of the Gross-Up Payment attributable to such reduction (plus an amount equal
to any tax reduction, whether of the Excise Tax, any applicable income tax, or any applicable employment tax, which Executive has received as a result of such initial repayment). In the event that the
Excise Tax is subsequently determined, whether by the Company or by a final determination of the Internal Revenue Service, to be more than the amount taken into account to determine the amount of the
Gross-Up Payment, then the Company shall pay to Executive an additional amount, which shall be determined using the same methods as were used for calculating the Gross-Up
Payment, with respect to such excess. For purposes of this Section 4(b), a determination of the Internal Revenue Service as to the amount of Excise Tax for which an Executive is liable shall
not be treated as final until the time that either (i) the Company agrees to acquiesce to the determination of the Internal Revenue Service or (ii) the determination of the Internal
Revenue Service has been upheld in a court of competent jurisdiction and the Company decides not to appeal such judicial decision or such decision is not appealable. If the Company chooses to contest
the determination of the Internal Revenue Service, then all costs, attorneys' fees, charges assessed and other expenses shall be borne and paid when due by the Company. 

5

 

    4.3  Release.  Upon the occurrence of a termination that would entitle Executive to receive severance
benefits pursuant to Sections 4.1 or 4.2 that are conditioned upon the execution of an effective release, and prior to the receipt of such severance benefits, Executive shall execute a release (the
"Release") in the form attached hereto as Exhibit B or Exhibit C, as appropriate. Such Release shall specifically relate to all of Executive's rights and claims in existence at the time
of such execution and shall confirm Executive's obligations under the Company's standard form of proprietary information agreement. It is understood that Executive has a certain period to consider
whether to execute such Release, and Executive may revoke such Release within seven (7) days after execution. In the event Executive does not execute such Release within the applicable period,
or if Executive revokes such Release within the subsequent seven (7) day period, none of the aforesaid benefits shall be payable under this Agreement. 

    4.4  Mitigation.  Executive shall not be required to mitigate damages or the amount of any payment
provided under this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Agreement be reduced by any compensation earned by Executive as a
result of employment by another employer or otherwise. 

    4.5  Other Terminations.  Only terminations of employment described in the foregoing provisions of this
Article 4 shall entitle Executive to severance benefits pursuant to the terms of this Agreement. Accordingly, terminations for any reason not so described (such as, without limitation, on
account of Executive's disability or death) shall not entitle Executive to such severance benefits; provided, however, that the provisions of this
Article 4 shall continue to apply to Executive with respect to terminations of employment with the Company described in Sections 4.1 and 4.2 even if, at the time of such termination, Executive
is not employed pursuant to this Agreement. 

6

  

 
 

ARTICLE 5    
    
    OUTSIDE ACTIVITIES    
  

    During the term of Executive's employment by the Company and continuing through the term of the Consulting Agreement, except on behalf of the Company,
Executive shall not directly or indirectly, whether as an officer, director, employee, stockholder, partner, proprietor, associate, representative, consultant, or in any capacity whatsoever engage in,
become financially interested in, be employed by or have any business connection with any other person, corporation, firm, partnership or other entity whatsoever that was known by Executive to compete
directly with the Company, throughout the world, in any line of business engaged in (or planned to be engaged in) by the Company. Notwithstanding the foregoing, Executive may own, as a passive
investor, securities of any competitor corporation, so long as Executive's direct holdings in any one such corporation shall not in the aggregate constitute more than 1% of the voting stock of such
corporation. In addition, Executive may, with approval of the Board, serve as a director on the boards of directors of other corporations and business entities so long as such corporations or business
entities do not compete directly with the Company, in any area of the world, in any line of business engaged in (or planned to be engaged in) by the Company, and so long as such service does not
materially interfere with the performance of Executive's duties hereunder. Executive also may engage in civic and not-for-profit activities so long as such activities do not
materially interfere with the performance of Executive's duties hereunder. 

 
 

ARTICLE 6    
    
    NONINTERFERENCE    
  

    While employed by the Company, and for one (1) year immediately following the date on which Executive terminates employment or otherwise ceases
providing services to the Company, Executive agrees not to interfere with the business of the Company by soliciting or attempting to solicit any employee of the Company to terminate such employee's
employment in order to become an employee of or a consultant or independent contractor to or for any person, corporation, firm, partnership or other entity whatsoever. Executive's duties under this
Article 6 shall survive termination of Executive's employment with the Company and the termination of this Agreement. 

 
 

ARTICLE 7    
    
    GENERAL PROVISIONS    
  

    7.1  Notices.  Subject to the remaining provisions of this Section 7.1, any notices provided
hereunder must be in writing and shall be deemed effective upon the earlier of personal delivery (including personal delivery by telex) or the third day after mailing by first class mail, to the
Company at its primary office location and to Executive at Executive's address as listed on the Company payroll. Any termination by the Company, whether or not for Cause, or by Executive for Good
Reason, shall be communicated by a Notice of Termination to the other party hereto given by hand delivery or by registered or certified mail, return receipt requested, postage prepaid, if to the
Executive, then to Executive at his address as set forth in the Company's records, and, if to the Company, to Exar Corporation, 48720 Kato Road, Fremont, California 94538 Attention: Law Department.
For purposes of this Agreement, a Notice of Termination means a written notice which (i) indicates the specific termination provision in the Agreement relied upon and (ii) if the
termination date of Executive's employment is other than the date of receipt of such notice, specifies such termination date (which date shall be not more than fifteen (15) days after the
giving of such notice). The failure by the Company or Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause or of Good Reason shall not
waive any right of the Company or of Executive, respectively, or preclude the Company or Executive, respectively, from asserting such fact or circumstance in enforcing its or his rights under this
Agreement. 

7

 

    7.2  Severability.  Whenever possible, each provision of this Agreement will be interpreted in such
manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein. 

    7.3  Waiver.  If either party should waive any breach of any provisions of this Agreement, they shall not
thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement, unless such waiver is agreed to in writing by both parties. 

    7.4  Complete Agreement.  As of the Effective Date, this Agreement wholly supersedes and renders without
further force or effect the letters dated September 9, 1996 and September 10, 1996 from the
Company to Executive (which letters set forth, respectively, the terms of Executive's employment by the Company and Executive's severance benefits following either a Change of Control or the
termination of his employment without cause), the Change of Control Plan, to the extent that it may apply to Executive, and all other agreements relating to compensation and benefits between the
Company and Executive, constitutes the entire agreement between Executive and the Company and is the complete, final, and exclusive embodiment of their agreement with regard to this subject matter.
This Agreement is entered into without reliance on any promise or representation other than those expressly contained herein or therein, and it cannot be modified or amended except in a writing signed
by Executive and by an officer of the Company. 

    7.5  Counterparts.  This Agreement may be executed in separate counterparts, any one of which need not
contain signatures of more than one party, but all of which taken together will constitute one and the same Agreement. 

    7.6  Headings.  The headings of the sections hereof are inserted for convenience only and shall not be
deemed to constitute a part hereof nor to affect the meaning thereof. 

    7.7  Successors and Assigns.  This Agreement is intended to bind and inure to the benefit of and be
enforceable by Executive and the Company, and their respective successors, assigns, heirs, executors and administrators, except that (i) Executive may not assign any of Executive's duties
hereunder and Executive may not assign any of Executive's rights hereunder, without the written consent of the Company, which shall not be withheld unreasonably and (ii) the Company may assign
its rights and duties hereunder only to a parent or subsidiary of the Company or to a corporation or other entity that will become the Company's successor in interest due to a merger, consolidation,
acquisition or similar transaction. 

    7.8  Arbitration.  Unless otherwise prohibited by law or specified below, all disputes, claims and causes
of action, in law or equity, arising from or relating to this Agreement or its enforcement, performance, breach, or interpretation shall be resolved solely and exclusively by final and binding
arbitration held in Santa Clara County, California through Judicial Arbitration & Mediation Services/Endispute ("JAMS") under the then existing JAMS arbitration rules. However, nothing in this
section is intended to prevent either party from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. Each party in any such arbitration
shall be responsible for its own attorneys' fees, costs and necessary disbursement; provided, however, that if one party refuses to arbitrate and the
other party seeks to compel arbitration by court order, if such other party prevails, it shall be entitled to recover reasonable attorneys' fees, costs and necessary disbursements. Pursuant to
California Civil Code Section 1717, each party warrants that it was represented by counsel in the negotiation and execution of this Agreement, including the attorneys' fees provision herein. 

8

 

    7.9  Attorneys' Fees.  If either party hereto brings any action to enforce rights hereunder, each party
in any such action shall be responsible for its own attorneys' fees and costs incurred in connection with such action. 

    7.10  Choice of Law.  All questions concerning the construction, validity and interpretation of this
Agreement will be governed by the law of the State of California without regard to its principles of conflicts of law. 

    IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. 

	 	 	EXAR CORPORATION
	 	 	By:	 	 
	 	 	 	 	

	 	 	Date:	 	 
	 	 	 	 	

	ACCEPTED AND AGREED THIS

          DAY OF DECEMBER, 2000	 	 	 	 
	

 DONALD L. CIFFONE, JR.	
 	

 	
 	

 

Exhibit A:
Consulting Agreement

Exhibit B: Release (Individual Termination)

Exhibit C: Release (Group Termination) 

9

  

 
 

EXHIBIT A
  CONSULTING AGREEMENT    
  

CONSULTING AGREEMENT  

    This CONSULTING AGREEMENT (the "Agreement") is made as of the       
day of             , 200      , by and between EXAR CORPORATION, including
its affiliates and wholly owned subsidiaries, a Delaware corporation, with its principal place of business at 48720 Kato Road, Fremont, California 94538 (the "Company"), and  DONALD L. CIFFONE, JR., an
individual residing at                          (the "Consultant"). 

    FOR
AND IN CONSIDERATION of the mutual promises and conditions set forth below, the Company and Consultant agree as follows: 

	1.
	SERVICES

    The
Company agrees to retain Consultant for the term specified in Section 2 to render services to the Company in the field of Consultant's expertise for the purpose of
providing executive management services. Consultant shall exercise his best skill and judgment in performing such services under this Agreement. 

	2.
	TERM

    The
Effective Date of this Agreement shall be the date on which Consultant's employment with the Company is terminated pursuant to the Executive Employment Agreement entered into as
of December 6, 2000 between the Company and Executive (the "Employment Agreement"); provided, however, that the Effective Date shall not occur and this Agreement shall have no force or effect
in the event that Consultant's employment with the Company is terminated by the Company for Cause, as such term is defined in the Employment Agreement, or on account of Consultant's death or
disability. Consultant's service under this Agreement shall continue until the one (1) year anniversary of the Effective Date, unless terminated earlier as provided in Section 5,
although the parties hereto may agree
in writing to extend the term of Consultant's service under this Agreement. Consultant's commencement and continuation of service under this Agreement shall constitute continuous service with the
Company for purposes of continued vesting and exercisability of any outstanding Company stock options or Company restricted stock held by Consultant as of the Effective Date. 

	3.
	CONSULTING FEES

    The
Company will pay Consultant consulting fees in an amount equal to one thousand dollars ($1,000) per month during the term of this Agreement, payable within thirty (30) days
of the Company's receipt from Consultant of an invoice for the relevant month, which invoice shall be in a form acceptable to the Company. Payment to Consultant shall be mailed to his address, as
listed in Section 10. 

	4.
	RELATIONSHIP

    Consultant's
relationship with the Company during the term of this Agreement is that of an independent contractor, and nothing stated or implied herein shall be construed to make
Consultant an employee (common law or otherwise) of the Company (or any affiliated company) within the meaning or application of any national or state unemployment insurance law, old age benefit law,
workmen's compensation or industrial accident law, or other industrial or labor law, any tax law, or any employee benefit plan maintained by the Company. Consultant hereby acknowledges his status as
an independent contractor, and not as an employee (common law or otherwise), of the Company during the term of this Agreement. Consultant hereby waives, during the term of this Agreement, any claim
for benefits or rights extended to employees of the Company to the extent that such benefits or rights are not provided to Consultant under this Agreement. 

A–1

 

    While Consultant shall control the detail, manner, and method of performing the services to be rendered, it is understood that all services performed under this Agreement shall be
subject to inspection by and approval of the Company. 

	5.
	TERMINATION

    (a) Either
party may, at its option, terminate this Agreement if the other party: (i) defaults in the performance of a material obligation hereunder, provided
such default has not been corrected within thirty (30) days after receipt of notice describing such default; (ii) becomes a party to any proceeding
involving his or its bankruptcy or other insolvency; or (iii) ceases to be actively engaged in business or financially incapable of fulfilling its obligations under this Agreement. 

    (b) Nothing
contained herein shall limit any other remedies that either party may have for the default of the other party under this Agreement. 

	6.
	CONFIDENTIALITY

    The
nature of the work performed and any information belonging to the Company or any third party with which Consultant may become familiar will be treated as confidential and may not
be disclosed without the written consent of the Company, except as provided herein. Consultant agrees to keep in strictest confidence all information relating to the business affairs of the Company
which may be acquired in connection with or as a result of this Agreement. During the term of this Agreement and at any time thereafter, without the prior written consent of the Company, Consultant
will not publish, communicate, divulge, disclose or use any of such information which has been designated as secret, confidential or proprietary, or from the surrounding circumstances of which ought
to be treated as secret or confidential. 

	7.
	NON-SOLICITATION/HIRE

    During
the term of this Agreement, and for one (1) year following the date on which Consultant's services under this Agreement are terminated, Consultant agrees not to
interfere with the business of the Company by soliciting or attempting to solicit any employee of the Company to terminate such employee's employment in order to become an employee of or a consultant
or independent contractor to or for any person, corporation, firm, partnership or other entity whatsoever. Consultant's duties under this Section 7 shall survive termination of Consultant's
services for the Company and the termination of this Agreement. 

	8.
	NONCOMPETE

    During
the term of this Agreement, except on behalf of the Company, Consultant shall not directly or indirectly, whether as an officer, director, employee, stockholder, partner,
proprietor, associate, representative, consultant, or in any capacity whatsoever engage in, become financially interested in, be employed by or have any business connection with any other person,
corporation, firm, partnership or other entity whatsoever that was known by Consultant to compete directly with the Company, throughout the world, in any line of business engaged in (or planned to be
engaged in) by the Company. Notwithstanding the previous sentence, Consultant may own, as a passive investor, securities of any competitor corporation, so long as Consultant's direct holdings in any
one such corporation shall not in the aggregate constitute more than 1% of the voting stock of such corporation. In addition, Consultant may, with approval of the Board of Directors of the Company,
serve as a director on the
boards of directors of other corporations and business entities so long as such corporations or business entities do not compete directly with the Company, in any area of the world, in any line of
business engaged in (or planned to be engaged in) by the Company, and so long as such service does not materially interfere with the performance of Consultant's duties hereunder. 

A–2

 
	9.
	TAXES

    Consultant
shall be solely responsible for the payment, wherever payable, of any income taxes or other taxes, contributions or insurance premiums that pertain to the compensation
received hereunder. 

	10.
	NOTICES

    Any
notice or other communication required to be given under the terms of this Agreement shall be deemed to have been given upon personal delivery or upon the lapse of three
(3) days following deposit for delivery by certified or registered United States mail, postage fully prepaid and addressed to the party at the Company's or Consultant's respective address as
shown herein (or at such other address to which one party gives the other by the same means of notice). 

    Notice
and payment to Consultant shall be sent to the following address: 

	

	

	

	

    Notice
to the Company shall be sent to the following address: 

EXAR
CORPORATION

48720 Kato Road

Fremont, California 94538

Attn: Legal Department 

	11.
	GENERAL

    (a) This
Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings between them relating to the subject
matter hereunder (with the exception of the Employment Agreement, certain provisions of which, by their terms, may continue in effect during the term of this Agreement), and no modification of this
Agreement shall be binding on either party unless it is in writing and signed by both parties. 

    (b) The
rights and obligations of the parties to this Agreement shall be governed by and construed in accordance with the laws of the State of California. The parties
hereto subject themselves to the jurisdiction of the state and federal courts of the State of California residing within the County of Alameda with respect to any dispute, disagreement or claim
arising hereunder, and agree that any such dispute, disagreement or claim shall be exclusively resolved by such California state or federal court. 

    (c) The
prevailing party in any legal, arbitration or dispute resolution action brought by one party against the other regarding the performance, interpretation,
enforcement or with respect to any matter arising out of or in connection with this Agreement shall be entitled, in addition to any other rights and remedies it may have, to reimbursement for its
expenses incurred thereby, including court costs and reasonable attorneys' fees. 

    (d) Neither
party shall assign this Agreement or any rights hereunder without the prior written consent of the other. Subject to this restriction, this Agreement shall
benefit and bind the successors and assigns of the parties. 

    The
parties hereto have caused this Agreement to be executed as of the date first above written. 

	EXAR CORPORATION	 	DONALD L. CIFFONE, JR.
	

By:	
 	

  
	
 	

By:	
 	

  

	Title:	 	  
	 	Title:	 	  

	Date:	 	  
	 	Date:	 	  

A–3

  

 
 

EXHIBIT B    
    
    RELEASE
  (INDIVIDUAL TERMINATION)    
  

    Certain capitalized terms used in this Release are defined in the Executive Employment Agreement (the "Agreement") which I have executed and of which this
Release is a part. 

    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 Release, in consideration of benefits I will receive under the Agreement, 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 or any claim to severance benefits pursuant to the terms
of the Agreement), arising out of or in any way related to agreements, events, acts or conduct at any time prior to and including the date I execute this Release, 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 Employee
Retirement Income Security Act of 1974, as amended; the federal Americans with Disabilities Act of 1990; the California Fair Employment and Housing Act, as amended; tort law; contract law; statutory
law; common law; wrongful discharge; discrimination; fraud; defamation; emotional distress; and breach of the implied covenant of good faith and fair dealing; provided,
however, that nothing in this paragraph shall be construed in any way to release the Company from its obligation to indemnify me pursuant to the Company's indemnification
obligation pursuant to agreement or applicable law. 

    I
acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA. I also acknowledge that the consideration given under the Agreement 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 on or after the date I execute this Release; (B) I have the right to consult
with an attorney prior to executing this Release; (C) I have twenty-one (21) days to consider this Release (although I may choose to voluntarily execute this Release
earlier); (D) I have seven (7) days following my execution of this Release to revoke the 

B–1

 

Release; and (E) this Release shall not be effective until the date upon which the revocation period has expired, which shall be the eighth (8th) day after this Release is executed by me. 

	 	 	DONALD L. CIFFONE, JR.
	

 	
 	

	 	 	Date:	 	 
	 	 	 	 	

B–2

  

 
 

EXHIBIT C    
    
    RELEASE
  (GROUP TERMINATION)    
  

    Certain capitalized terms used in this Release are defined in the Executive Employment Agreement (the "Agreement") which I have executed and of which this
Release is a part. 

    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 Release, in consideration of benefits I will receive under the Agreement, 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 or any claim to severance benefits pursuant to the terms
of the Agreement), arising out of or in any way related to agreements, events, acts or conduct at any time prior to and including the date I execute this Release, 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 Employee
Retirement Income Security Act of 1974, as amended; the federal Americans with Disabilities Act of 1990; the California Fair Employment and Housing Act, as amended; tort law; contract law; statutory
law; common law; wrongful discharge; discrimination; fraud; defamation; emotional distress; and breach of the implied covenant of good faith and fair dealing; provided,
however, that nothing in this paragraph shall be construed in any way to release the Company from its obligation to indemnify me pursuant to the Company's indemnification
obligation pursuant to agreement or applicable law. 

    I
acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA. I also acknowledge that the consideration given under the Agreement 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 on or after the date I execute this Release; (B) I have the right to consult
with an attorney prior to executing this Release; (C) I have forty-five (45) days to consider this Release (although I may choose to voluntarily execute this Release
earlier); (D) I have seven (7) days following my execution of this Release to revoke the Release; (E) this Release shall not be effective until the date upon which the revocation
period has expired, which shall be the eighth day (8th) after this Release is executed by me; and (F) I have received with this Release a detailed list of the job titles and ages of all
employees who were 

C–1

 

terminated in this group termination and the ages of all employees of the Company in the same job classification or organizational unit who were not terminated. 

	 	 	DONALD L. CIFFONE, JR.
	

 	
 	

	 	 	Date:	 	 
	 	 	 	 	

C–2

QuickLinks

ARTICLE 1 DEFINITIONS

ARTICLE 2 EMPLOYMENT BY THE COMPANY

ARTICLE 3 COMPENSATION

ARTICLE 4 SEVERANCE AND CHANGE OF CONTROL BENEFITS

ARTICLE 5 OUTSIDE ACTIVITIES

ARTICLE 6 NONINTERFERENCE

ARTICLE 7 GENERAL PROVISIONS

EXHIBIT A CONSULTING AGREEMENT

EXHIBIT B RELEASE (INDIVIDUAL TERMINATION)

EXHIBIT C RELEASE (GROUP TERMINATION)

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