Related Party Transactions and Outside Related Director Information

Atheros Communications, Inc. (ATHR)

4/7/2006 Proxy Information

We have a consulting agreement with Teresa H. Meng, who is also a director. Dr. Meng’s consulting agreement is described above in the section entitled “Directors’ Compensation.”

We have entered into indemnification agreements with each of our current directors and executive officers. These agreements will require us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. We also intend to enter into indemnification agreements with our future directors and executive officers. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange Commission, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

We had an offer letter agreement with Thomas J. Foster, formerly our Vice President of Sales, entered into on October 21, 2001, that was terminated on March 6, 2006 in connection with Mr. Foster’s departure from Atheros. Under the agreement, Mr. Foster was originally entitled to an annual base salary of $175,000 and a target commission at 100% of quota of $150,000. In January 2004, Mr. Foster’s annual base salary was increased to $200,001, and in January 2005 his annual base salary was increased to $208,001. Pursuant to the offer letter, Mr. Foster was granted in 2001 an option to purchase 224,999 shares of common stock, with the first 25% vesting after one year of employment and the remaining shares vesting monthly over the following 36 months. The agreement provided that in the event Mr. Foster was involuntarily or constructively terminated within 13 months following a change of control, the vesting of his options would be accelerated by the lesser of six months or 50% and he would receive six months of his annual target salary. Options held by Mr. Foster that were not vested on March 6, 2006 have terminated. Pursuant to a severance and release agreement that we entered into with Mr. Foster in March 2006, we paid Mr. Foster severance in the amount of $104,000, equal to six months of his base salary, upon his termination in March 2006, and we have agreed to pay the health insurance coverage for Mr. Foster and his enrolled dependents for six months after the effective date of his termination.