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
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 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.
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,
including determination of the exercise price of such right; (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.
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(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) 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 no less than the lesser of: (i) an amount equal to
eighty-five percent (85%) of the fair market value of the stock on the
Offering Date; or (ii) an amount equal to eighty-five percent (85%) of the
fair market value of the stock on the date of purchase.
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 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
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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 cases 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 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.
(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
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 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 one
thousand (1,000) shares of Common Stock, and the maximum aggregate number of
shares available to be purchased by all Eligible Employees under any given
Offering is forty thousand (40,000) 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.
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4. PURCHASE PRICE.
The purchase price of the Common Stock shall be the lesser of
eighty-five percent (85%) of the fair market value of the Common Stock on the
Offering Date or eighty-five percent (85%) of the fair market value of the
Common Stock on the date of purchase, determined, respectively, based on the
average of the low and the high price of the Common Stock on the first and
last trading days 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.
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.
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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 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.
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