Exar and Sipex have entered into a merger agreement to combine the two companies. Under the terms of the agreement, Sipex stockholders will receive 0.6679 of a share of Exar for each share of Sipex. Exar stockholders will own approximately 67.6% and Sipex stockholders will own approximately 32.4% of Exar after completion of the transaction, which assumes conversion to stock of outstanding Sipex debt and related warrants. Ralph Schmitt, Sipex chief executive officer, will become the chief executive officer of Exar. Interim chief executive officer and chairman, Richard L. Leza, will continue as chairman of the board of directors. The companies expect to realize substantial cost savings as a result of the merger and anticipate Non-GAAP pretax cost savings on an annualized basis of at least $10 million by the second calendar quarter of 2008. As a result of these cost savings together with the anticipated revenue growth and gross margin expansion on Sipex products the transaction is expected to be accretive to Exar's Non-GAAP earnings by the second calendar quarter of 2008.