EXHIBIT 10.8
EXAR CORPORATION
EXECUTIVE OFFICERS' CHANGE OF CONTROL
SEVERANCE BENEFIT PLAN
SECTION 2. INTRODUCTION.
This EXAR Corporation Executive Officers' Change of Control Severance
Benefit Plan (the "Plan") was approved by the Compensation Committee of the
Board of Directors of EXAR Corporation (the "Company") on June 24, 1999 (the
"Effective Date"). The purpose of the Plan is to encourage valued officers to
work in the Company's best interests during and following a Change of Control
(as defined below) by providing for the payment of severance benefits as set
forth herein. This Plan shall supersede any group severance benefit plan, policy
or practice previously maintained by the Company for the employees described
herein. This Plan shall supersede any agreement between the Eligible Employees
(as defined below) for monetary severance payments, but not for other forms of
severance compensation including stock or accelerated vesting of stock options
as set forth in the EXAR Corporation 1997 Equity Incentive Plan. This Plan
document also is the Summary Plan Description for the Plan.
SECTION 3. DEFINITIONS.
When used herein, the following terms shall have the
following definitions:
(a) "BASE SALARY" shall mean an Eligible Employee's salary from the
Company, at the rate in effect on the date of a Change of Control (or as
increased thereafter), excluding all bonus, commissions and other incentive
compensation, such as, but not by way of limitation, payments under the
Company's Executive Incentive Compensation Program, Sales Incentive Compensation
Program and Key Employee Compensation Program.
(b) "CAUSE" shall mean: (i) conviction of any felony or conviction of
any crime involving moral turpitude or dishonesty; (ii) participation in a fraud
or act of dishonesty against the Company; (iii) conduct by an Eligible Employee
which, based upon a good faith and reasonable factual investigation and
determination by the Company, demonstrates gross incompetence; or (iv)
intentional, material violation by an Eligible Employee of any contract between
the Eligible Employee and the Company or any statutory duty of the Eligible
Employee to the Company that is not corrected within thirty (30) days after
written notice to the Eligible Employee thereof. Physical or mental disability
shall not constitute "Cause."
(c) "CHANGE OF CONTROL" shall mean (i) a dissolution or liquidation of
the Company; (ii) a merger or consolidation in which the Company is not the
surviving corporation; (iii) 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 thirty-five percent (35%) 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; (v) a transaction or group of related transactions
involving the sale of all or substantially all of the Company's assets; or (vi)
the acquisition by any person, entity or group (excluding any employee benefit
plan, or related trust, sponsored or maintained by the Company or any subsidiary
of the Company) of the beneficial ownership, directly or indirectly, of
securities of the Company representing more than thirty-five percent (35%) of
the combined voting power in the election of
directors. For purposes of this paragraph, acquisition of ownership interests
by any Eligible Employee, whether through a "management buy-out" or
otherwise, shall not constitute a "Change of Control."
"ELIGIBLE EMPLOYEES" shall mean those executives as may be designated from
time to time by the Board of Directors to be a participant. The Board of
Directors, or the Compensation Committee of the Board of Directors, may, in
its sole discretion, designate additional employees to be Eligible
Employees under the Plan.
(d) "GOOD REASON" shall mean 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 the Eligible Employee's rate of total compensation
(including base salary, bonus, stock, stock options, etc.); (ii) any reduction
in the package of welfare benefit plans, taken as a whole, provided to the
Eligible Employee (except that employee contributions may be raised to the
extent of any cost increases imposed by third parties) or any action by the
Company which would adversely affect the Eligible Employee's participation or
reduce the Eligible Employee's benefits under any of such plans; (iii) any
change in the Eligible Employee'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 the Eligible
Employee relocate to a worksite that is more than thirty-five (35) miles from
the Eligible Employee's prior worksite, unless the Eligible Employee accepts
such relocation opportunity; (v) failure or refusal of a successor to the
Company to assume the Company's obligations under the Plan; or (vii) material
breach by the Company or any successor to the Company of any of the material
provisions of the Plan.
(e) "TERMINATION DATE" shall mean the date upon which an Eligible
Employee's employment with the Company terminates within thirteen (13) months
after the effective date of a Change of Control.
SECTION 4. ELIGIBILITY FOR BENEFITS.
(a) GENERAL RULES. Subject to the requirements set forth in this
Section 3, and subject to further limitations set forth subsequently in this
Plan, the Company will grant severance benefits to Eligible Employees. As a
condition of receiving severance benefits under the Plan, each Eligible Employee
must execute an effective general waiver and release, on the appropriate form
attached hereto as Exhibits A and B, which releases the Company from any and all
claims the Eligible Employee may have against the Company.
(b) EXCEPTIONS. An employee who otherwise is an Eligible Employee will
not receive severance benefits under the Plan in any of the following
circumstances:
(i) The employee voluntarily terminates employment with the
Company other than for Good Reason.
(ii) The employee voluntarily terminates employment with the
Company in order to accept employment with another entity that is wholly or
partly owned (directly or indirectly) by the Company or a successor to the
Company, or is wholly or partly owned (directly or indirectly) by the parent or
other affiliate of the Company or its successor.
SECTION 5. AMOUNT OF SEVERANCE BENEFITS.
Eligible Employees whose employment is terminated without Cause or for
Good Reason on a Termination Date will receive, subject to Section 5 hereof, a
lump sum payment equal to two (2) times the Eligible Employee's Base Salary. In
the event of an Eligible Employee's death prior to the receipt of a payment to
which he or she is entitled, such payment shall be made to the Eligible
Employee's surviving spouse or, if
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none, to the Eligible Employee's estate. The foregoing severance benefits
shall be subject to applicable federal, state, local and foreign tax
withholdings.
SECTION 6. LIMITATION ON AMOUNT OF BENEFIT; GOLDEN PARACHUTE TAXES.
(a) Notwithstanding any other provision of the Plan to the contrary,
(i) the severance benefits under this Plan are in lieu of any other benefit
provided under any other group severance plan of the Company and (ii) severance
benefits under this Plan shall be reduced by the amount of any payment to which
the Eligible Employee is entitled under any individual severance agreement or
other arrangement then in effect between the Eligible Employee and the Company.
The accelerated vesting of stock options under the Company's 1997 Equity
Incentive Plan shall not be subject to this Section 5(a).
(b) Notwithstanding any other provision of the Plan to the contrary, 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 an Eligible Employee,
whether paid or payable or distributed or distributable pursuant to the terms of
the Plan or otherwise (the "Payments"), would cause the Eligible Employee 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 the Eligible
Employee, within the later of ninety (90) days of the Termination Date 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 the
Eligible Employee of any Excise Tax on the Payments, 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, the Eligible Employee 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 the Eligible
Employee 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 the Eligible Employee 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 the Eligible
Employee 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 5(b), a determination of the Internal Revenue
Service as to the amount of Excise Tax for which an Eligible Employee 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.
SECTION 7. NOTICE OF TERMINATION.
Any termination by the Company, whether or not for Cause, or by the
Eligible Employee 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 Eligible
Employee, then to the Eligible Employee at the Eligible Employee's 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 the Plan, a Notice of Termination means a written notice which (i)
indicates the specific termination provision in the Plan relied upon and (ii) if
the Termination
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Date is other than the date of receipt of such notice, specifies the
Termination Date (which date shall be not more than fifteen (15) days after
the giving of such notice). The failure by the Company or the Eligible
Employee 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 the Eligible Employee, respectively, or preclude
the Company or the Eligible Employee, respectively, from asserting such fact
or circumstance in enforcing its, his or her rights hereunder.
SECTION 8. TIME OF PAYMENT.
The Company will pay the severance payments described in Section 4
above within thirty (30) days after the Termination Date of an Eligible
Employee, but not sooner than the effective date of the release attached as
Exhibit A or B, as appropriate.
SECTION 9. MITIGATION.
The Eligible Employee shall not be required to mitigate the amount of
the severance benefits payable under this Plan by seeking other employment or
otherwise, and any amount earned by the Eligible Employee after the Termination
Date shall not reduce or otherwise affect the amount of such severance benefits.
SECTION 10. RIGHT TO INTERPRET PLAN; AMEND AND TERMINATE; OTHER ARRANGEMENTS.
(a) EXCLUSIVE DISCRETION. The Plan Administrator (as defined in Section
14 below) shall have the exclusive discretion and authority to establish rules,
forms, and procedures for the administration of the Plan, to construe and
interpret the Plan and to decide any and all questions of fact, interpretation,
definition, computation or administration arising in connection with the
operation of the Plan, including, but not limited to, the eligibility to
participate in the Plan and the amount of benefits to be paid under the Plan.
The rules, interpretations, computations and other actions of the Plan
Administrator shall be binding and conclusive on all persons.
(b) AMENDMENT OR TERMINATION. The Compensation Committee of the Board
of Directors of the Company reserves the right to amend or discontinue this Plan
or the benefits provided hereunder at any time; PROVIDED, HOWEVER, that no such
amendment or termination shall affect the right to any unpaid benefit of any
Eligible Employee whose Termination Date has occurred prior to such amendment or
termination of the Plan, and that no amendment or discontinuance of this Plan
may occur after the effective date of a Change of Control or in anticipation of
a Change of Control. Any action amending or terminating the Plan shall be in
writing and executed by the Chair of the Compensation Committee of the Board of
Directors of the Company.
SECTION 11. NO IMPLIED EMPLOYMENT CONTRACT.
The Plan shall not be deemed (i) to give any Eligible Employee any
right to be retained in the employ of the Company or (ii) to interfere with the
right of the Company to discharge any Eligible Employee or other person at any
time and for any reason, which right is hereby reserved.
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SECTION 12. LEGAL CONSTRUCTION.
This Plan is intended to be governed by and shall be construed in
accordance with the Employee Retirement Income Security Act of 1974 ("ERISA") as
a "welfare benefit plan" as defined in Section 3(1) of ERISA, and, to the extent
not preempted by ERISA, the laws of the State of California. If any term,
provision, covenant or restriction of the Plan is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of the Plan shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated.
SECTION 13. CLAIMS, INQUIRIES AND APPEALS.
(a) APPLICATIONS FOR BENEFITS AND INQUIRIES. Any application for
benefits, inquiries about the Plan or inquiries about present or future rights
under the Plan must be submitted to the Plan Administrator in writing. The Plan
Administrator is:
Compensation Committee
EXAR Corporation
48720 Kato Road
Fremont, CA 94538
Attention: Chair of Compensation Committee
(b) DENIAL OF CLAIMS. In the event that any application for severance
benefits is denied in whole or in part, the Plan Administrator must notify the
Eligible Employee, in writing, of the denial of the application, and of the
Eligible Employee's right to review the denial. The written notice of denial
will be set forth in a manner designed to be understood by the Eligible
Employee, and will include specific reasons for the denial, specific references
to the Plan provision upon which the denial is based, a description of any
information or material that the Plan Administrator needs to complete the review
and an explanation of the Plan's review procedure.
This written notice will be given to the Eligible Employee within
ninety (90) days after the Plan Administrator receives the application, unless
special circumstances require an extension of time, in which case, the Plan
Administrator has up to an additional ninety (90) days for processing the
application. If an extension of time for processing is required, written notice
of the extension will be furnished to the Eligible Employee before the end of
the initial ninety (90)-day period.
This notice of extension will describe the special circumstances
necessitating the additional time and the date by which the Plan Administrator
is to render its decision on the application. If written notice of denial of the
application for severance benefits is not furnished within the specified time,
the application shall be deemed to be denied. The Eligible Employee will then be
permitted to appeal the denial in accordance with the review procedure described
below.
(c) REQUEST FOR A REVIEW. Any Eligible Employee (or that person's
authorized representative) for whom an application for severance benefits is
denied (or deemed denied), in whole or in part, may appeal the denial by
submitting a request for a review to the Plan Administrator within sixty (60)
days after the application is denied (or deemed denied). The Plan Administrator
will give the Eligible Employee (or his or her representative) an opportunity to
review pertinent documents in preparing a request for a review. A request for a
review shall be in writing and shall be addressed to:
Compensation Committee
EXAR Corporation
48720 Kato Road
Fremont, CA 94538
Attn: Chair of Compensation Committee
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A request for review must set forth all of the grounds on which it is based, all
facts in support of the request and any other matters that the Eligible Employee
feels are pertinent. The Plan Administrator may require the Eligible Employee to
submit additional facts, documents or other material as it may find necessary or
appropriate in making its review.
(d) DECISION ON REVIEW. The Plan Administrator will act on each request
for review within sixty (60) days after receipt of the request, unless special
circumstances require an extension of time (not to exceed an additional sixty
(60) days), for processing the request for a review. If an extension for review
is required, written notice of the extension will be furnished to the Eligible
Employee within the initial sixty (60)-day period. The Plan Administrator will
give prompt, written notice of its decision to the Eligible Employee. In the
event that the Plan Administrator confirms the denial of the application for
benefits in whole or in part, the notice will outline, in a manner calculated to
be understood by the Eligible Employee, the specific Plan provisions upon which
the decision is based. If written notice of the Plan Administrator's decision is
not given to the Eligible Employee within the time prescribed in this Section
12(d), the application will be deemed denied on review.
(e) RULES AND PROCEDURES. The Plan Administrator will establish rules
and procedures, consistent with the Plan and with ERISA, as necessary and
appropriate in carrying out its responsibilities in reviewing severance benefit
claims. The Plan Administrator may require an Eligible Employee who wishes to
submit additional information in connection with an appeal from the denial (or
deemed denial) of severance benefits to do so at the Eligible Employee's own
expense.
(f) EXHAUSTION OF REMEDIES. No legal action for severance benefits
under the Plan may be brought until the Eligible Employee (i) has submitted a
written application for severance benefits in accordance with the procedures
described by Section 12(a) above, (ii) has been notified by the Plan
Administrator that the application is denied (or the application is deemed
denied due to the Plan Administrator's failure to act on it within the
established time period), (iii) has filed a written request for a review of the
application in accordance with the appeal procedure described in Section 12(c)
above and (iv) has been notified in writing that the Plan Administrator has
denied the appeal (or the appeal is deemed to be denied due to the Plan
Administrator's failure to take any action on the claim within the time
prescribed by Section 12(d) above).
SECTION 14. BASIS OF PAYMENTS TO AND FROM PLAN.
All benefits under the Plan shall be paid by the Company. The Plan
shall be unfunded, and benefits hereunder shall be paid only from the general
assets of the Company.
SECTION 15. OTHER PLAN INFORMATION.
(a) EMPLOYER AND PLAN IDENTIFICATION NUMBERS. The Employer
Identification Number assigned to the Company (which is the "Plan Sponsor" as
that term is used in ERISA) by the Internal Revenue Service is 94-1741481. The
Plan Number assigned to the Plan by the Plan Sponsor pursuant to the
instructions of the Internal Revenue Service is 510.
(b) ENDING DATE FOR PLAN'S FISCAL YEAR. The date of the end of the
fiscal year for the purpose of maintaining the Plan's records is December 31.
(c) AGENT FOR THE SERVICE OF LEGAL PROCESS. Service of legal process
may be made upon the Plan Administrator.
(d) PLAN SPONSOR AND ADMINISTRATOR. The "Plan Sponsor" of the Plan is
EXAR Corporation and the "Plan Administrator" of the Plan is the Compensation
Committee of the Board of Directors of the Company, both having the following
address: 48720 Kato Road, Fremont, CA 94538. The Plan Sponsor's and Plan
6
Administrator's telephone number is (510) 668-7112. The Plan Administrator is
the named fiduciary charged with the responsibility for administering the Plan.
SECTION 16. STATEMENT OF ERISA RIGHTS.
Eligible Employees participating in this Plan (which is intended to be
an ERISA welfare benefit plan sponsored by EXAR Corporation) are entitled to
certain rights and protections under ERISA. If you are an Eligible Employee, you
are considered a participant in the Plan and, under ERISA, you are entitled to:
(a) Examine, without charge, at the Plan Administrator's office and at
other specified locations, such as work sites, all Plan documents and copies of
all documents filed by the Plan with the U.S. Department of Labor, such as
detailed annual reports;
(b) Obtain copies of all Plan documents and Plan information upon
written request to the Plan Administrator. The Administrator may make a
reasonable charge for the copies;
(c) Receive a summary of the Plan's annual financial report, in the
case of a plan which is required to file an annual financial report with the
Department of Labor. (Generally, all pension plans and welfare plans with one
hundred (100) or more participants must file these annual reports.)
In addition to creating rights for Eligible Employees, ERISA imposes
duties upon the people responsible for the operation of the employee benefit
plan. The people who operate the Plan, called "fiduciaries" of the Plan, have a
duty to do so prudently and in the interest of you and other Plan participants
and beneficiaries.
No one, including your employer or any other person, may fire you or
otherwise discriminate against you in any way to prevent you from obtaining a
Plan benefit or exercising your rights under ERISA. If your claim for a Plan
benefit is denied in whole or in part, you must receive a written explanation of
the reason for the denial. You have the right to have the Plan review and
reconsider your claim.
Under ERISA, there are steps you can take to enforce the above rights.
For instance, if you request materials from the Plan and do not receive them
within thirty (30) days, you may file suit in a federal court. In such a case,
the court may require the Plan Administrator to provide the materials and pay
you up to $110 a day until you receive the materials, unless the materials were
not sent because of reasons beyond the control of the Plan Administrator. If you
have a claim for benefits that is denied or ignored, in whole or in part, you
may file suit in a state or federal court. If it should happen that the Plan
fiduciaries misuse the Plan's money, or if you are discriminated against for
asserting your rights, you may seek assistance from the U.S. Department of
Labor, or you may file suit in a federal court. The court will decide who should
pay court costs and legal fees. If you are successful, the court may order the
person you have sued to pay these costs and fees. If you lose, the court may
order you to pay these costs and fees, for example, if it finds your claim is
frivolous.
If you have any questions about the Plan, you should contact the Plan
Administrator. If you have any questions about your rights under ERISA, you
should contact the nearest office of the Pension and Welfare Benefits
Administration, U.S. Department of Labor, listed in your telephone directory or
the Division of Technical Assistance and Inquiries, Pension and Welfare Benefits
Administration, U.S. Department of Labor, 200 Constitution Avenue N.W.,
Washington, D.C. 20210.
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EXHIBIT A
RELEASE AGREEMENT - INDIVIDUAL TERMINATION
I UNDERSTAND AND AGREE COMPLETELY TO THE TERMS SET FORTH IN THE EXAR
CORPORATION EXECUTIVE OFFICERS' CHANGE OF CONTROL SEVERANCE BENEFIT PLAN (THE
"PLAN").
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 Agreement, in consideration of
benefits I will receive under the Plan, 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), arising out of or in any way related
to agreements, events, acts or conduct at any time prior to and including the
Effective Date of this Agreement, 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 Americans with
Disabilities Act of 1990; the California Fair Employment and Housing Act, as
amended; tort law; contract law; wrongful discharge; discrimination; fraud;
defamation; emotional distress; and breach of the implied covenant of good faith
and fair dealing.
I acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under ADEA. I also acknowledge that the consideration
given 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 after the Effective Date of this Agreement; (b) I have the right to
consult with an attorney prior to executing this Agreement; (c) I have
twenty-one (21) days to consider this Agreement (although I may choose to
voluntarily execute this Agreement earlier); (d) I have seven (7) days following
the execution of this Agreement by the parties to revoke the Agreement; and (e)
this Agreement shall not be effective until the date upon which the revocation
period has expired, which shall be the eighth (8th) day after this Agreement is
executed by me, provided that the Company has also executed this Agreement by
that date (the "Effective Date").
8
EXAR CORPORATION EMPLOYEE
By: Name:
Title: Date:
Date:
9
EXHIBIT B
RELEASE AGREEMENT - GROUP TERMINATION
I UNDERSTAND AND AGREE COMPLETELY TO THE TERMS SET FORTH IN THE EXAR
CORPORATION EXECUTIVE OFFICERS' CHANGE OF CONTROL SEVERANCE BENEFIT PLAN (THE
"PLAN").
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 Agreement, in consideration of
benefits I will receive under the Plan, 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), arising out of or in any way related
to agreements, events, acts or conduct at any time prior to and including the
Effective Date of this Agreement, 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 Americans with
Disabilities Act of 1990; the California Fair Employment and Housing Act, as
amended; tort law; contract law; wrongful discharge; discrimination; fraud;
defamation; emotional distress; and breach of the implied covenant of good faith
and fair dealing.
I acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under ADEA. I also acknowledge that the consideration
given 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 after the Effective Date of this Agreement; (b) I have the right to
consult with an attorney prior to executing this Agreement; (c) I have
forty-five (45) days to consider this Agreement (although I may choose to
voluntarily execute this Agreement earlier); (d) I have seven (7) days following
the execution of this Agreement by the parties to revoke the Agreement; and (e)
this Agreement shall not be effective until the date upon which the revocation
period has expired, which shall be the eighth (8th) day after this Agreement is
executed by me, provided that the Company has also executed this Agreement by
that date (the "Effective Date"); and (f) I have received with this Agreement a
detailed list of the job titles and ages of all employees who were 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.
10
EXAR CORPORATION EMPLOYEE
By: Name:
Title: Date:
Date:
11
EXAR CORPORATION
EXECUTIVE OFFICERS' CHANGE OF CONTROL
SEVERANCE BENEFIT PLAN
SECTION 17. INTRODUCTION.
This EXAR Corporation Executive Officers' Change of Control Severance
Benefit Plan (the "Plan") was approved by the Compensation Committee of the
Board of Directors of EXAR Corporation (the "Company") on June 24, 1999 (the
"Effective Date"). The purpose of the Plan is to encourage valued officers to
work in the Company's best interests during and following a Change of Control
(as defined below) by providing for the payment of severance benefits as set
forth herein. This Plan shall supersede any group severance benefit plan,
policy or practice previously maintained by the Company for the employees
described herein. This Plan shall supersede any agreement between the Eligible
Employees (as defined below) for monetary severance payments, but not for other
forms of severance compensation including stock or accelerated vesting of stock
options as set forth in the EXAR Corporation 1997 Equity Incentive Plan. This
Plan document also is the Summary Plan Description for the Plan.
SECTION 18. DEFINITIONS.
When used herein, the following terms shall have the
following definitions:
(a) "BASE SALARY" shall mean an Eligible Employee's salary from the
Company, at the rate in effect on the date of a Change of Control (or as
increased thereafter), excluding all bonus, commissions and other incentive
compensation, such as, but not by way of limitation, payments under the
Company's Executive Incentive Compensation Program, Sales Incentive
Compensation Program and Key Employee Compensation Program.
(b) "CAUSE" shall mean: (i) conviction of any felony or conviction of
any crime involving moral turpitude or dishonesty; (ii) participation in a
fraud or act of dishonesty against the Company; (iii) conduct by an Eligible
Employee which, based upon a good faith and reasonable factual investigation
and determination by the Company, demonstrates gross incompetence; or (iv)
intentional, material violation by an Eligible Employee of any contract between
the Eligible Employee and the Company or any statutory duty of the Eligible
Employee to the Company that is not corrected within thirty (30) days after
written notice to the Eligible Employee thereof. Physical or mental disability
shall not constitute "Cause."
(c) "CHANGE OF CONTROL" shall mean (i) a dissolution or liquidation of
the Company; (ii) a merger or consolidation in which the Company is not the
surviving corporation; (iii) 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 thirty-five percent (35%) 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; (v) a transaction or group of related
transactions involving the sale of all or substantially all of the Company's
assets; or (vi) the acquisition by any person, entity or group (excluding any
employee benefit plan, or related trust, sponsored or maintained by the Company
or any subsidiary of the Company) of the beneficial ownership, directly or
indirectly, of securities of the Company representing more than thirty-five
percent (35%) of the combined voting power in the election of directors. For
purposes of this paragraph, acquisition of ownership interests by any Eligible
Employee, whether through a "management buy-out" or otherwise, shall not
constitute a "Change of Control."
12
(i) "ELIGIBLE EMPLOYEES" shall mean those executives as may be
designated from time to time by the Board of Directors to be a participant.
The Board of Directors, or the Compensation Committee of the Board of
Directors, may, in its sole discretion, designate additional employees to be
Eligible Employees under the Plan.
(d) "GOOD REASON" shall mean 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 the Eligible Employee's rate of total
compensation (including base salary, bonus, stock, stock options, etc.); (ii)
any reduction in the package of welfare benefit plans, taken as a whole,
provided to the Eligible Employee (except that employee contributions may be
raised to the extent of any cost increases imposed by third parties) or any
action by the Company which would adversely affect the Eligible Employee's
participation or reduce the Eligible Employee's benefits under any of such
plans; (iii) any change in the Eligible Employee'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 the Eligible Employee relocate to a worksite that is more than thirty-five
(35) miles from the Eligible Employee's prior worksite, unless the Eligible
Employee accepts such relocation opportunity; (v) failure or refusal of a
successor to the Company to assume the Company's obligations under the Plan; or
(vii) material breach by the Company or any successor to the Company of any of
the material provisions of the Plan.
(e) "TERMINATION DATE" shall mean the date upon which an Eligible
Employee's employment with the Company terminates within thirteen (13) months
after the effective date of a Change of Control.
SECTION 19. ELIGIBILITY FOR BENEFITS.
(i) GENERAL RULES. Subject to the requirements set forth in this
Section 3, and subject to further limitations set forth subsequently in this
Plan, the Company will grant severance benefits to Eligible Employees. As a
condition of receiving severance benefits under the Plan, each Eligible
Employee must execute an effective general waiver and release, on the
appropriate form attached hereto as Exhibits A and B, which releases the
Company from any and all claims the Eligible Employee may have against the
Company.
(b) EXCEPTIONS. An employee who otherwise is an Eligible Employee will
not receive severance benefits under the Plan in any of the following
circumstances:
(i) The employee voluntarily terminates employment with the
Company other than for Good Reason.
(ii) The employee voluntarily terminates employment with the
Company in order to accept employment with another entity that is wholly or
partly owned (directly or indirectly) by the Company or a successor to the
Company, or is wholly or partly owned (directly or indirectly) by the parent or
other affiliate of the Company or its successor.
SECTION 20. AMOUNT OF SEVERANCE BENEFITS.
Eligible Employees whose employment is terminated without Cause or for
Good Reason on a Termination Date will receive, subject to Section 5 hereof, a
lump sum payment equal to the greater of (a) one (1) times the Eligible
Employee's Base Salary or (b) one (1) month of Base Salary for each complete
year of service with the Company, up to a maximum of two (2) times the Eligible
Employee's Base Salary. In the event of an Eligible Employee's death prior to
the receipt of a payment to which he or she is entitled, such payment shall be
made to the Eligible Employee's surviving spouse or, if none, to the Eligible
Employee's estate. The foregoing severance benefits shall be subject to
applicable federal, state, local and foreign tax withholdings.
13
SECTION 21. LIMITATION ON AMOUNT OF BENEFIT; GOLDEN PARACHUTE TAXES.
(a) Notwithstanding any other provision of the Plan to the contrary, (i)
the severance benefits under this Plan are in lieu of any other benefit
provided under any other group severance plan of the Company and (ii) severance
benefits under this Plan shall be reduced by the amount of any payment to which
the Eligible Employee is entitled under any individual severance agreement or
other arrangement then in effect between the Eligible Employee and the Company.
The accelerated vesting of stock options under the Company's 1997 Equity
Incentive Plan shall not be subject to this Section 5(a).
(b) Notwithstanding any other provision of the Plan to the contrary, 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 an Eligible
Employee, whether paid or payable or distributed or distributable pursuant to
the terms of the Plan or otherwise (the "Payments"), would cause the Eligible
Employee 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
the Eligible Employee, within the later of ninety (90) days of the Termination
Date 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 the Eligible Employee of any Excise Tax on the Payments, 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, the Eligible Employee 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 the
Eligible Employee 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 the Eligible Employee 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 the Eligible
Employee 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 5(b), a determination of the Internal Revenue
Service as to the amount of Excise Tax for which an Eligible Employee 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.
14
SECTION 22. NOTICE OF TERMINATION.
Any termination by the Company, whether or not for Cause, or by the
Eligible Employee 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
Eligible Employee, then to the Eligible Employee at the Eligible Employee's
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 the Plan, a Notice of Termination means a written
notice which (i) indicates the specific termination provision in the Plan
relied upon and (ii) if the Termination Date is other than the date of receipt
of such notice, specifies the Termination Date (which date shall be not more
than fifteen (15) days after the giving of such notice). The failure by the
Company or the Eligible Employee 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 the Eligible Employee,
respectively, or preclude the Company or the Eligible Employee, respectively,
from asserting such fact or circumstance in enforcing its, his or her rights
hereunder.
SECTION 23. TIME OF PAYMENT.
The Company will pay the severance payments described in Section 4
above within thirty (30) days after the Termination Date of an Eligible
Employee, but not sooner than the effective date of the release attached as
Exhibit A or B, as appropriate.
SECTION 24. MITIGATION.
The Eligible Employee shall not be required to mitigate the amount of
the severance benefits payable under this Plan by seeking other employment or
otherwise, and any amount earned by the Eligible Employee after the Termination
Date shall not reduce or otherwise affect the amount of such severance benefits.
SECTION 25. RIGHT TO INTERPRET PLAN; AMEND AND TERMINATE; OTHER ARRANGEMENTS.
(a) EXCLUSIVE DISCRETION. The Plan Administrator (as defined in
Section 14 below) shall have the exclusive discretion and authority to
establish rules, forms, and procedures for the administration of the Plan, to
construe and interpret the Plan and to decide any and all questions of fact,
interpretation, definition, computation or administration arising in connection
with the operation of the Plan, including, but not limited to, the eligibility
to participate in the Plan and the amount of benefits to be paid under the
Plan. The rules, interpretations, computations and other actions of the Plan
Administrator shall be binding and conclusive on all persons.
(b) AMENDMENT OR TERMINATION. The Compensation Committee of the Board
of Directors of the Company reserves the right to amend or discontinue this
Plan or the benefits provided hereunder at any time; PROVIDED, HOWEVER, that no
such amendment or termination shall affect the right to any unpaid benefit of
any Eligible Employee whose Termination Date has occurred prior to such
amendment or termination of the Plan, and that no amendment or discontinuance
of this Plan may occur after the effective date of a Change of Control or in
anticipation of a Change of Control. Any action amending or terminating the
Plan shall be in writing and executed by the Chair of the Compensation
Committee of the Board of Directors of the Company.
SECTION 26. NO IMPLIED EMPLOYMENT CONTRACT.
The Plan shall not be deemed (i) to give any Eligible Employee any
right to be retained in the employ of the Company or (ii) to interfere with the
right of the Company to discharge any Eligible Employee or other person at any
time and for any reason, which right is hereby reserved.
15
SECTION 27. LEGAL CONSTRUCTION.
This Plan is intended to be governed by and shall be construed in
accordance with the Employee Retirement Income Security Act of 1974 ("ERISA")
as a "welfare benefit plan" as defined in Section 3(1) of ERISA, and, to the
extent not preempted by ERISA, the laws of the State of California. If any
term, provision, covenant or restriction of the Plan is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of the Plan
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
SECTION 28. CLAIMS, INQUIRIES AND APPEALS.
(a) APPLICATIONS FOR BENEFITS AND INQUIRIES. Any application for
benefits, inquiries about the Plan or inquiries about present or future rights
under the Plan must be submitted to the Plan Administrator in writing. The Plan
Administrator is:
Compensation Committee
EXAR Corporation
48720 Kato Road
Fremont, CA 94538
Attention: Chair of Compensation Committee
(b) DENIAL OF CLAIMS. In the event that any application for severance
benefits is denied in whole or in part, the Plan Administrator must notify the
Eligible Employee, in writing, of the denial of the application, and of the
Eligible Employee's right to review the denial. The written notice of denial
will be set forth in a manner designed to be understood by the Eligible
Employee, and will include specific reasons for the denial, specific references
to the Plan provision upon which the denial is based, a description of any
information or material that the Plan Administrator needs to complete the
review and an explanation of the Plan's review procedure.
This written notice will be given to the Eligible Employee within
ninety (90) days after the Plan Administrator receives the application, unless
special circumstances require an extension of time, in which case, the Plan
Administrator has up to an additional ninety (90) days for processing the
application. If an extension of time for processing is required, written notice
of the extension will be furnished to the Eligible Employee before the end of
the initial ninety (90)-day period.
This notice of extension will describe the special circumstances
necessitating the additional time and the date by which the Plan Administrator
is to render its decision on the application. If written notice of denial of
the application for severance benefits is not furnished within the specified
time, the application shall be deemed to be denied. The Eligible Employee will
then be permitted to appeal the denial in accordance with the review procedure
described below.
16
(c) REQUEST FOR A REVIEW. Any Eligible Employee (or that person's
authorized representative) for whom an application for severance benefits is
denied (or deemed denied), in whole or in part, may appeal the denial by
submitting a request for a review to the Plan Administrator within sixty (60)
days after the application is denied (or deemed denied). The Plan Administrator
will give the Eligible Employee (or his or her representative) an opportunity
to review pertinent documents in preparing a request for a review. A request
for a review shall be in writing and shall be addressed to:
Compensation Committee
EXAR Corporation
48720 Kato Road
Fremont, CA 94538
Attn: Chair of Compensation Committee
A request for review must set forth all of the grounds on which it is based,
all facts in support of the request and any other matters that the Eligible
Employee feels are pertinent. The Plan Administrator may require the Eligible
Employee to submit additional facts, documents or other material as it may find
necessary or appropriate in making its review.
(d) DECISION ON REVIEW. The Plan Administrator will act on each
request for review within sixty (60) days after receipt of the request, unless
special circumstances require an extension of time (not to exceed an additional
sixty (60) days), for processing the request for a review. If an extension for
review is required, written notice of the extension will be furnished to the
Eligible Employee within the initial sixty (60)-day period. The Plan
Administrator will give prompt, written notice of its decision to the Eligible
Employee. In the event that the Plan Administrator confirms the denial of the
application for benefits in whole or in part, the notice will outline, in a
manner calculated to be understood by the Eligible Employee, the specific Plan
provisions upon which the decision is based. If written notice of the Plan
Administrator's decision is not given to the Eligible Employee within the time
prescribed in this Section 12(d), the application will be deemed denied on
review.
(e) RULES AND PROCEDURES. The Plan Administrator will establish rules
and procedures, consistent with the Plan and with ERISA, as necessary and
appropriate in carrying out its responsibilities in reviewing severance benefit
claims. The Plan Administrator may require an Eligible Employee who wishes to
submit additional information in connection with an appeal from the denial (or
deemed denial) of severance benefits to do so at the Eligible Employee's own
expense.
(f) EXHAUSTION OF REMEDIES. No legal action for severance benefits
under the Plan may be brought until the Eligible Employee (i) has submitted a
written application for severance benefits in accordance with the procedures
described by Section 12(a) above, (ii) has been notified by the Plan
Administrator that the application is denied (or the application is deemed
denied due to the Plan Administrator's failure to act on it within the
established time period), (iii) has filed a written request for a review of the
application in accordance with the appeal procedure described in Section 12(c)
above and (iv) has been notified in writing that the Plan Administrator has
denied the appeal (or the appeal is deemed to be denied due to the Plan
Administrator's failure to take any action on the claim within the time
prescribed by Section 12(d) above).
SECTION 29. BASIS OF PAYMENTS TO AND FROM PLAN.
All benefits under the Plan shall be paid by the Company. The Plan
shall be unfunded, and benefits hereunder shall be paid only from the general
assets of the Company.
17
SECTION 30. OTHER PLAN INFORMATION.
(a) EMPLOYER AND PLAN IDENTIFICATION NUMBERS. The Employer
Identification Number assigned to the Company (which is the "Plan Sponsor" as
that term is used in ERISA) by the Internal Revenue Service is 94-1741481.
The Plan Number assigned to the Plan by the Plan Sponsor pursuant to the
instructions of the Internal Revenue Service is 510.
(b) ENDING DATE FOR PLAN'S FISCAL YEAR. The date of the end of the
fiscal year for the purpose of maintaining the Plan's records is December 31.
(c) AGENT FOR THE SERVICE OF LEGAL PROCESS. Service of legal process
may be made upon the Plan Administrator.
(d) PLAN SPONSOR AND ADMINISTRATOR. The "Plan Sponsor" of the Plan
is EXAR Corporation and the "Plan Administrator" of the Plan is the
Compensation Committee of the Board of Directors of the Company, both having
the following address: 48720 Kato Road, Fremont, CA 94538. The Plan Sponsor's
and Plan Administrator's telephone number is (510) 668-7112. The Plan
Administrator is the named fiduciary charged with the responsibility for
administering the Plan.
SECTION 31. STATEMENT OF ERISA RIGHTS.
Eligible Employees participating in this Plan (which is intended to
be an ERISA welfare benefit plan sponsored by EXAR Corporation) are entitled
to certain rights and protections under ERISA. If you are an Eligible
Employee, you are considered a participant in the Plan and, under ERISA, you
are entitled to:
(a) Examine, without charge, at the Plan Administrator's office and
at other specified locations, such as work sites, all Plan documents and
copies of all documents filed by the Plan with the U.S. Department of Labor,
such as detailed annual reports;
(b) Obtain copies of all Plan documents and Plan information upon
written request to the Plan Administrator. The Administrator may make a
reasonable charge for the copies;
(c) Receive a summary of the Plan's annual financial report, in the
case of a plan which is required to file an annual financial report with the
Department of Labor. (Generally, all pension plans and welfare plans with one
hundred (100) or more participants must file these annual reports.)
In addition to creating rights for Eligible Employees, ERISA imposes
duties upon the people responsible for the operation of the employee benefit
plan. The people who operate the Plan, called "fiduciaries" of the Plan, have
a duty to do so prudently and in the interest of you and other Plan
participants and beneficiaries.
No one, including your employer or any other person, may fire you or
otherwise discriminate against you in any way to prevent you from obtaining a
Plan benefit or exercising your rights under ERISA. If your claim for a Plan
benefit is denied in whole or in part, you must receive a written explanation
of the reason for the denial. You have the right to have the Plan review and
reconsider your claim.
Under ERISA, there are steps you can take to enforce the above
rights. For instance, if you request materials from the Plan and do not
receive them within thirty (30) days, you may file suit in a federal court.
In such a case, the court may require the Plan Administrator to provide the
materials and pay you up to $110 a day until you receive the materials,
unless the materials were not sent because of reasons beyond the control of
the Plan Administrator. If you have a claim for benefits that is denied or
ignored, in whole or in part, you may file suit in a state or federal court.
If it should happen that the Plan fiduciaries misuse the Plan's money, or if
you are discriminated against for asserting your rights, you may seek
assistance from the U.S. Department of Labor, or you may file suit in a
federal court. The court will
18
decide who should pay court costs and legal fees. If you are successful, the
court may order the person you have sued to pay these costs and fees. If you
lose, the court may order you to pay these costs and fees, for example, if it
finds your claim is frivolous.
If you have any questions about the Plan, you should contact the
Plan Administrator. If you have any questions about your rights under ERISA,
you should contact the nearest office of the Pension and Welfare Benefits
Administration, U.S. Department of Labor, listed in your telephone directory
or the Division of Technical Assistance and Inquiries, Pension and Welfare
Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue
N.W., Washington, D.C. 20210.
19
EXHIBIT A
RELEASE AGREEMENT - INDIVIDUAL TERMINATION
I UNDERSTAND AND AGREE COMPLETELY TO THE TERMS SET FORTH IN THE EXAR
CORPORATION EXECUTIVE OFFICERS' CHANGE OF CONTROL SEVERANCE BENEFIT PLAN (THE
"PLAN").
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 Agreement, in consideration of
benefits I will receive under the Plan, 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), arising out of or in any
way related to agreements, events, acts or conduct at any time prior to and
including the Effective Date of this Agreement, 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 Americans with Disabilities Act of 1990; the
California Fair Employment and Housing Act, as amended; tort law; contract
law; wrongful discharge; discrimination; fraud; defamation; emotional
distress; and breach of the implied covenant of good faith and fair dealing.
I acknowledge that I am knowingly and voluntarily waiving and
releasing any rights I may have under ADEA. I also acknowledge that the
consideration given 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 after the Effective Date of this Agreement; (b) I have
the right to consult with an attorney prior to executing this Agreement; (c)
I have twenty-one (21) days to consider this Agreement (although I may choose
to voluntarily execute this Agreement earlier); (d) I have seven (7) days
following the execution of this Agreement by the parties to revoke the
Agreement; and (e) this Agreement shall not be effective until the date upon
which the revocation period has expired, which shall be the eighth (8th) day
after this Agreement is executed by me, provided that the Company has also
executed this Agreement by that date (the "Effective Date").
20
EXAR CORPORATION EMPLOYEE
By: Name:
Title: Date:
Date:
21
EXHIBIT B
RELEASE AGREEMENT - GROUP TERMINATION
I UNDERSTAND AND AGREE COMPLETELY TO THE TERMS SET FORTH IN THE EXAR
CORPORATION EXECUTIVE OFFICERS' CHANGE OF CONTROL SEVERANCE BENEFIT PLAN (THE
"PLAN").
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 Agreement, in consideration of
benefits I will receive under the Plan, 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), arising out of or in any
way related to agreements, events, acts or conduct at any time prior to and
including the Effective Date of this Agreement, 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 Americans with Disabilities Act of 1990; the
California Fair Employment and Housing Act, as amended; tort law; contract
law; wrongful discharge; discrimination; fraud; defamation; emotional
distress; and breach of the implied covenant of good faith and fair dealing.
I acknowledge that I am knowingly and voluntarily waiving and
releasing any rights I may have under ADEA. I also acknowledge that the
consideration given 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 after the Effective Date of this Agreement; (b) I have
the right to consult with an attorney prior to executing this Agreement; (c)
I have forty-five (45) days to consider this Agreement (although I may choose
to voluntarily execute this Agreement earlier); (d) I have seven (7) days
following the execution of this Agreement by the parties to revoke the
Agreement; and (e) this Agreement shall not be effective until the date upon
which the revocation period has expired, which shall be the eighth (8th) day
after this Agreement is executed by me, provided that the Company has also
executed this Agreement by that date (the "Effective Date"); and (f) I have
received with this Agreement a detailed list of the job titles and ages of
all employees who were 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.
22
EXAR CORPORATION EMPLOYEE
By: Name:
Title: Date:
Date:
23
EXAR CORPORATION
EXECUTIVE OFFICERS' CHANGE OF CONTROL
SEVERANCE BENEFIT PLANS
- ------------------------------------------------------- -----------------------------------------------------
GROUP I GROUP II
- ---------------------------- -------------------------- -------------------------- --------------------------
NAME EFFECTIVE NAME EFFECTIVE
- ---------------------------- -------------------------- -------------------------- --------------------------
Donald L. Ciffone, Jr. 06/24/99 Susan J. Hardman 03/06/00
- ---------------------------- -------------------------- -------------------------- --------------------------
Michael J. Class 06/24/99 Thomas W. Jones 06/24/99
- ---------------------------- -------------------------- -------------------------- --------------------------
Roubik Gregorian 06/24/99 Thomas R. Melendrez 06/24/99
- ---------------------------- -------------------------- -------------------------- --------------------------
Ronald W. Guire 06/24/99 Stephen W. Michael 06/24/99
- ---------------------------- -------------------------- -------------------------- --------------------------
John Sramek 06/24/99
- ---------------------------- -------------------------- -------------------------- --------------------------
24