Executive Incentive Compensation Program
Fiscal Year 2006
The intention of the Executive Incentive Compensation Program for Fiscal Year 2006 is to provide incentives to eligible
Exar Corporation executives for achieving or surpassing established revenue and operating income goals derived from the
FY 2006 Financial Plan. (see Attachment 1, FY 2006 Financial Plan and amended Plan as a result of the Infineon purchase
2.0 Management Participant Qualifications
2.1 Direct participation is limited to a small group of executives who have an important influence on the operation, profits,
and future of Exar. Generally, only the corporate officers and the directors of major staff or line functions may be
2.2 Participation shall be recommended by the President/CEO and is subject to concurrence by the Compensation
Committee of the Board of Directors.
2.3 An invitation to participate and the information divulged in connection with the program must be considered private
and not be discussed with others.
3.0 Funding of the Incentive Plan Pool
The Incentive Plan Pool will be funded upon achievement of certain revenue and operating income goals. The
operating income goal must be met at the pre-established threshold levels before any pool funding takes place (see
Attachment 2, Incentive Pool Funding Matrices). NOTE: operating income thresholds exclude consideration of
amortization of intangibles resulting from tethys product. Further, this plan will not be funded unless there is funding
and payout for the Fiscal Year 2006 Key Employee Incentive Program.
3.2 Calculation for Pool Funding
The size of the executive pool is the sum of the fiscal year 2006 annual base salary of the participants times their
respective target award percentages. The pool size will be modified according to the actual revenue and operating
income performance levels. Use the ta