Exhibit 10.1

Monolithic Power Systems, Inc.
Performance Stock Unit Grant Notice
2014 Equity Incentive Plan

 

Monolithic Power Systems, Inc. (the “Company”) hereby awards to Participant the
number of Performance Stock Units (“PSUs”) set forth below (the “Award”). The
Award is subject to all of the terms and conditions as set forth in this
Performance Stock Unit Grant Notice (the “Notice”), the 2014 Equity Incentive
Plan (the “Plan”) and the Performance Stock Unit Agreement (the “Award
Agreement”), both of which are attached hereto and incorporated in their
entirety. Capitalized terms not explicitly defined in this Notice but defined in
the Plan or the Award Agreement will have the same definitions as in the Plan or
the Award Agreement. In the event of any conflict between the terms of the Award
and the Plan, the terms of the Plan will control.

 

Participant:          

Date of Grant:

Vesting Commencement Date:

Purchase Price per Share:

Number of PSUs:

 

Vesting Schedule:

The Award has two vesting components. The performance vesting component is set
forth on Exhibit A. The time-based vesting component is as follows: the Award
vests as to [fraction] of the PSUs (rounded down to the nearest whole PSU) 12
months after the Vesting Commencement Date, with the balance vesting as to
[fraction] of the PSUs (rounded down to the nearest whole PSU) every [# months]
thereafter, subject to Participant’s Continuous Service with the Company through
each such vesting date. Each installment of PSUs that vests hereunder is a
“separate payment” for purposes of Treasury Regulations Section 1.409A-2(b)(2).

 

Issuance Schedule:

Subject to any change on a Capitalization Adjustment and Participant’s payment
of the Purchase Price per Share within two months following the applicable
vesting date, one share of Common Stock will be issued for each PSU that vests
at the time set forth in the Award Agreement. If Participant does not pay the
Purchase Price per Share for the vested PSU within two months after the vesting
date, Participant’s rights to those vested PSUs, and the underlying shares of
Common Stock and related Dividend Equivalents, will be forfeited on the two
month anniversary of such vesting date.

 

Additional Terms/Acknowledgements: Participant acknowledges receipt of, and
understands and agrees to, this Notice, the Award Agreement, the Plan and the
prospectus for the Plan. As of the Date of Grant, this Notice, the Award
Agreement and the Plan set forth the entire understanding between Participant
and the Company regarding the Award and supersede all prior oral and written
agreements on the terms of the Award, with the exception, if applicable, of (i)
the written employment agreement or offer letter agreement entered into between
the Company and Participant specifying the terms that should govern this
specific Award, or, if applicable instead, the severance benefit plan then in
effect and applicable to Participant and (ii) any compensation recovery policy
that is adopted by the Company or is otherwise required by applicable law. By
accepting this Award, Participant consents to receive Plan documents by
electronic delivery and to participate in the Plan through an on-line or
electronic system established and maintained by the Company or another third
party designated by the Company.

 

Monolithic Power Systems, Inc.

 

Participant:

 

 

 

 

 

By:

 

 

 

 

Signature

 

 

Signature

 

 

 

 

 

Title:

 

 

Date:

 

 

 

 

 

 

Date:

 

 

 

 

 

Also Provided:

Award Agreement, 2014 Equity Incentive Plan, Prospectus

  

 
 

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Monolithic Power Systems, Inc.

2014 Equity Incentive Plan

 

Performance Stock Unit Agreement

 

Monolithic Power Systems, Inc. (the “Company”) has awarded you a Performance
Stock Unit Award (the “Award”) that is subject to its 2014 Equity Incentive Plan
(the “Plan”), the Performance Stock Unit Grant Notice (the “Grant Notice”) and
this Performance Stock Unit Agreement (the “Agreement”), for the number of
Performance Stock Units indicated in the Grant Notice. Capitalized terms not
explicitly defined in this Agreement or in the Grant Notice but defined in the
Plan will have the same definitions as in the Plan. In the event of any conflict
between the terms in this Agreement and the Plan, the terms of the Plan will
control.

 

1.     Grant of the Award. The Award represents your right to be issued on a
future date one share of Common Stock for each Performance Stock Unit that
vests, provided that you pay the Purchase Price per Share for each vested
Performance Stock Unit within two months after the applicable vesting date. If
you do not pay the Purchase Price per Share for the vested Performance Stock
Unit within two months after the applicable vesting date, your rights to that
vested Performance Stock Unit, and the underlying share of Common Stock and the
compensation payable in respect of the related Dividend Equivalents, will be
forfeited on the two month anniversary of the vesting date at no cost to the
Company, and you will have no further right to receive the shares of Common
Stock or the payments in respect of Dividend Equivalents.

 

2.     Vesting. Your Performance Stock Units will vest as provided in the Grant
Notice. Vesting will cease on the termination of your Continuous Service. Any
Performance Stock Units that have not yet vested will be forfeited on the
termination of your Continuous Service.

 

3.     Adjustments to Number of PSUs & Shares of Common Stock.

 

(a)     The Performance Stock Units subject to your Award will be adjusted for
Capitalization Adjustments, as provided in the Plan.

 

(b)     Any additional Performance Stock Units and any shares, cash or other
property (including Dividend Equivalents) that become subject to the Award will
be subject, in a manner determined by the Board, to the terms of the Award,
including the same forfeiture restrictions, restrictions on transferability, and
time and manner of delivery as applicable to the other Performance Stock Units
and shares covered by your Award.

 

(c)     You have no rights to be issued any fractional share of Common Stock or
cash in lieu of such fractional share under this Award. Any fraction of a share
will be rounded down to the nearest whole share.

  

 
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(d)     Each Performance Stock Unit has associated with it one Dividend
Equivalents. If and when a Performance Stock Unit vests, the cash payable under
this Dividend Equivalent award will become vested. Provided you pay the Purchase
Price per Share within two months after the applicable vesting date for the
Performance Stock Units, payment will be made shortly after vesting, and, in all
cases, no later than the date that is the 15th day of the third calendar month
of the applicable year following the year in which the Dividend Equivalent is no
longer subject to a “substantial risk of forfeiture” within the meaning of
Treasury Regulations Section 1.409A-1(d). If necessary to comply with applicable
tax laws, the cash payment will be paid no later than December 31 of the
calendar year in which the Dividend Equivalent is no longer subject to a
“substantial risk of forfeiture” within the meaning of Treasury Regulations
Section 1.409A-1(d). If your Performance Stock Units never vest or are otherwise
forfeited (including due to failure to timely pay the Purchase Price per Share),
your corresponding Dividend Equivalents will immediately expire on the
expiration or other forfeiture of the related Performance Stock Units – and you
will not be entitled to any payout of regular cash dividends in respect of those
forfeited Performance Stock Units. Your Dividend Equivalents will immediately
expire on the issuance of the underlying Shares subject to the Performance Stock
Units that have vested – that is, no additional regular cash dividends that are
declared or paid after that date will accrue for those newly vested shares.
Instead, your rights to receive any regular cash dividends will be solely as a
Company stockholder. Your rights on the Dividend Equivalents are subject to all
of the same terms and conditions as apply to your underlying Performance Stock
Units in respect of which these Dividend Equivalents are granted.

 

4.     Method of Payment. In order to be issued the shares of Common Stock and
related Dividend Equivalents subject to your vested Performance Stock Units, you
must pay the aggregate Purchase Price per Share for your vested Performance
Stock Units within two months following the vesting date for such Performance
Stock Units. You may pay the Purchase Price per Share through one or more of the
following:

 

(a)     Cash, check, bank draft, electronic funds or wire transfer, or money
order payable to the Company.

 

(b)     Offset against the value of cash due to you on the vesting of your
Dividend Equivalents.

 

(c)     Provided that at the vesting date the Common Stock is publicly traded,
using a program developed under Regulation T, as provided by the Federal Reserve
Board that, prior to the issuance of Common Stock, results in either the receipt
of cash (or check) by the Company or the receipt of irrevocable instructions to
pay the aggregate Purchase Price per Share to the Company from the sales
proceeds. This manner of payment is also known as a “broker-assisted exercise,”
“same day sale” or “sell to cover.”

 

(d)     If and only if permitted by the Board at the time the Purchase Price per
Share is due and payable, by a net settlement arrangement pursuant to which the
Company will reduce the number of shares of Common Stock issuable upon vesting
by the largest whole number of shares with a Fair Market Value that does not
exceed the aggregate Purchase Price per Share. You must submit an additional
payment to the extent of any remaining balance of the aggregate Purchase Price
per Share not satisfied by such reduction in the number of whole shares to be
issued.

 

 
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5.     Securities Law Compliance. You will not be issued any Common Stock
underlying the Performance Stock Units or other shares with respect to your
Performance Stock Units (or payments in respect of your Dividend Equivalents)
unless either (i) the shares are registered under the Securities Act, or (ii)
the Company has determined that such issuance would be exempt from the
registration requirements of the Securities Act. Your Award also must comply
with other applicable laws and regulations governing the Award, and you will not
receive shares underlying your Performance Stock Units (or payments in respect
of your Dividend Equivalents) if the Company determines that such receipt would
not be in material compliance with such laws and regulations.

 

6.     Transferability. Prior to the time that shares of Common Stock have been
delivered to you, you may not transfer, pledge, sell or otherwise dispose of any
portion of the Performance Stock Units or the shares in respect of your
Performance Stock Units. For example, you may not use shares that may be issued
in respect of your Performance Stock Units as security for a loan, nor may you
transfer, pledge, sell or otherwise dispose of such shares. This restriction on
transfer will lapse on delivery to you of shares in respect of your vested
Performance Stock Units.

 

(a)     Death. Your Performance Stock Units are not transferable other than by
will and by the laws of descent and distribution. At your death, your executor
or administrator of your estate will be entitled to receive, on behalf of your
estate, Common Stock or other consideration under this Award.

 

(b)     Domestic Relations Orders. If you receive written permission from the
Board or its duly authorized designee, and provided that you and the designated
transferee enter into transfer and other agreements required by the Company, you
may transfer your right to receive the distribution of Common Stock or other
consideration under your Performance Stock Units, in accordance with a domestic
relations order or official marital settlement agreement that contains the
information required by the Company to effectuate the transfer. You are
encouraged to discuss with the Company’s General Counsel the proposed terms of
any such transfer prior to finalizing the domestic relations order or marital
settlement agreement to verify that you may make such transfer, and if so, to
help ensure the required information is contained within the domestic relations
order or marital settlement agreement. The Company is not obligated to allow you
to transfer your Award in connection with your domestic relations order or
marital settlement agreement.

 

7.     Date of Issuance.

 

(a)     The issuance of shares in respect of the Performance Stock Units (and
payments in respect of your Dividend Equivalents) is intended to comply with
Treasury Regulations Section 1.409A-1(b)(4) and will be construed and
administered in such a manner. As a result, subject to your payment of the
applicable Purchase Price per Share, the shares (and payments) will be issued no
later than the date that is the 15th day of the third calendar month of the
applicable year following the year in which the shares of Common Stock under
this Award are no longer subject to a “substantial risk of forfeiture” within
the meaning of Treasury Regulations Section 1.409A-1(d).

 

 
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(b)     If the Company determines that it is necessary to comply with applicable
tax laws, the shares (and payments) will be issued, subject to your payment of
the applicable Purchase Price per Share, no later than December 31 of the
calendar year in which the shares are no longer subject to a “substantial risk
of forfeiture” within the meaning of Treasury Regulations Section 1.409A-1(d).

 

8.     Dividends. You will receive no benefit or adjustment to your Performance
Stock Units with respect to any cash dividend, stock dividend or other
distribution except as provided in the Plan with respect to a Capitalization
Adjustment. Please see Section 3(d) regarding Dividend Equivalents.

 

9.     Restrictive Legends. The Common Stock issued with respect to your
Performance Stock Units will be endorsed with appropriate legends determined by
the Company.

 

10.     Award not a Service Contract. Your Continuous Service is not for any
specified term and may be terminated by you or by the Company or an Affiliate at
any time, for any reason, with or without cause and with or without notice.
Nothing in this Agreement (including, but not limited to, the vesting of your
Performance Stock Units or the issuance of the shares subject to your
Performance Stock Units or payments in respect of your Dividend Equivalents),
the Plan or any covenant of good faith and fair dealing that may be found
implicit in this Agreement or the Plan shall: (i) confer on you any right to
continue in the employ or service of, or affiliation with, the Company or an
Affiliate; (ii) constitute any promise or commitment by the Company or an
Affiliate regarding the fact or nature of future positions, future work
assignments, future compensation or any other term or condition of employment or
affiliation; (iii) confer any right or benefit under this Agreement or the Plan
unless such right or benefit has specifically accrued under the terms of this
Agreement or Plan; or (iv) deprive the Company of the right to terminate you at
will and without regard to any future vesting opportunity that you may have.

 

11.     Withholding Obligations.

 

(a)     On each vesting date, and on or before the time you receive a
distribution of the shares underlying your Performance Stock Units (or payments
in respect of your Dividend Equivalents), and at any other time as reasonably
requested by the Company in accordance with applicable tax laws, you agree to
make adequate provision for any sums required to satisfy the federal, state,
local and foreign tax withholding obligations of the Company or any Affiliate
that arise in connection with your Award (the “Withholding Taxes”).
Specifically, the Company or an Affiliate may, in its sole discretion, satisfy
all or any portion of the Withholding Taxes relating to your Award by any of the
following means or by a combination of such means: (i) withholding from any
compensation otherwise payable to you by the Company or an Affiliate; (ii)
causing you to tender a cash payment (which may be in the form of a check,
electronic wire transfer or other method permitted by the Company); (iii)
permitting or requiring you to enter into a “same day sale” commitment with a
broker-dealer that is a member of the Financial Industry Regulatory Authority (a
“FINRA Dealer”) whereby you irrevocably elect to sell a portion of the shares to
be delivered in connection with your Performance Stock Units to satisfy the
Withholding Taxes and whereby the FINRA Dealer irrevocably commits to forward
the proceeds necessary to satisfy the Withholding Taxes directly to the Company
and/or its Affiliates; or (iv) subject to the approval of the independent
members of the Board, withholding shares of Common Stock from the shares of
Common Stock issued or otherwise issuable to you in connection with your
Performance Stock Units with a fair market value (measured as of the date shares
of Common Stock are issued to you) equal to the amount of such Withholding
Taxes; provided, however, that the number of such shares of Common Stock so
withheld will not exceed the amount necessary to satisfy the Company’s required
tax withholding obligations using the minimum statutory withholding rates for
federal, state, local and foreign tax purposes, including payroll taxes, that
are applicable to supplemental taxable income.

 

 
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(b)     Unless the Withholding Taxes of the Company and/or any Affiliate are
satisfied, the Company will have no obligation to deliver to you any Common
Stock (or payments in respect of your Dividend Equivalents).

 

(c)     If the Company’s obligation to withhold arises prior to the delivery to
you of Common Stock or it is determined after the delivery of Common Stock to
you that the amount of the Company’s withholding obligation was greater than the
amount withheld by the Company, you agree to indemnify and hold the Company
harmless from any failure by the Company to withhold the proper amount.

 

12.     Unsecured Obligation. Your Award is unfunded, and as a holder of vested
Performance Stock Units (and Dividend Equivalents), you will be considered an
unsecured creditor of the Company with respect to the Company’s obligation, if
any, to issue shares or other property or compensation pursuant to this
Agreement. You will not have voting or any other rights as a stockholder of the
Company with respect to the shares to be issued pursuant to this Agreement until
such shares are issued to you. On such issuance, you will obtain full voting and
other rights as a stockholder of the Company. Nothing contained in this
Agreement, and no action taken pursuant to its provisions, will create or be
construed to create a trust of any kind or a fiduciary relationship between you
and the Company or any other person.

 

13.     Notices. Any notices provided for in this Agreement or the Plan will be
given in writing (including electronically) and will be deemed effectively given
on receipt or, in the case of notices delivered by the Company to you, five days
after deposit in the U.S. mail, postage prepaid, addressed to you at the last
address you provided to the Company. The Company may, in its sole discretion,
decide to deliver any documents related to participation in the Plan and this
Award by electronic means or to request your consent to participate in the Plan
by electronic means. By accepting this Award, you consent to receive such
documents by electronic delivery and to participate in the Plan through an
on-line or electronic system established and maintained by the Company or
another third party designated by the Company.

 

14.     Miscellaneous.

 

(a)     The rights and obligations of the Company under your Award will be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder will inure to the benefit of, and be enforceable by the
Company’s successors and assigns.

 

 
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(b)     You agree on request to execute any further documents or instruments
necessary or desirable in the sole determination of the Company to carry out the
purposes or intent of your Award.

 

(c)     You acknowledge and agree that you have reviewed your Award in its
entirety, have had an opportunity to obtain the advice of counsel prior to
executing and accepting your Award, and fully understand all provisions of your
Award.

 

(d)     This Agreement will be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

 

(e)     All obligations of the Company under the Plan and this Agreement will be
binding on any successor to the Company, whether the existence of such successor
is the result of a direct or indirect purchase, merger, consolidation, or
otherwise, of all or substantially all of the business and/or assets of the
Company.

 

15.     Governing Plan Document. Your Award is subject to all the provisions of
the Plan, the provisions of which are hereby made a part of your Award, 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. Your
Award (and any compensation paid or shares issued under your Award) is subject
to recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer
Protection Act and any implementing regulations thereunder, any clawback policy
adopted by the Company and any compensation recovery policy otherwise required
by applicable law. No recovery of compensation under such a clawback policy will
be an event giving rise to a right to voluntarily terminate employment on a
resignation for “good reason,” or for a “constructive termination” or any
similar term under any plan of or agreement with the Company. You hereby
acknowledge receipt or the right to receive a document providing the information
required by Rule 428(b)(1) promulgated under the Securities Act, which includes
the Plan prospectus. In addition, you acknowledge receipt of the Company’s
policy permitting officers and directors to sell shares only during certain
“window” periods and the Company’s insider trading policy, in effect from time
to time.

 

16.     Severability. If all or any part of this Agreement or the Plan is
declared by any court or governmental authority to be unlawful or invalid, such
unlawfulness or invalidity will not invalidate any portion of this Agreement or
the Plan not declared to be unlawful or invalid. Any Section of this Agreement
(or part of such a Section) so declared to be unlawful or invalid shall, if
possible, be construed in a manner which will give effect to the terms of such
Section or part of a Section to the fullest extent possible while remaining
lawful and valid.

 

17.     Effect on Other Employee Benefit Plans. The value of the Award subject
to this Agreement will not be included as compensation, earnings, salaries, or
other similar terms used when calculating the Employee’s benefits under any
employee benefit plan sponsored by the Company or any Affiliate, except as such
plan otherwise expressly provides. The Company expressly reserves its rights to
amend, modify, or terminate any of the Company’s or any Affiliate’s employee
benefit plans.

 

 
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18.     Amendment. Any amendment to this Agreement must be in writing, signed by
a duly authorized representative of the Company. The Board reserves the right to
amend this Agreement in any way it may deem necessary or advisable to carry out
the purpose of the grant as a result of any change in applicable laws or
regulations or any future law, regulation, interpretation, ruling, or judicial
decision.

 

19.     Compliance with Section 409A of the Code. This Award is intended to
comply with the “short-term deferral” rule set forth in Treasury Regulation
Section 1.409A-1(b)(4). However, if this Award fails to satisfy the requirements
of the short-term deferral rule and is otherwise not exempt from, and therefore
deemed to be deferred compensation subject to, Section 409A of the Code, and if
you are a “Specified Employee” (within the meaning set forth Section
409A(a)(2)(B)(i) of the Code) as of the date of your separation from service
(within the meaning of Treasury Regulation Section 1.409A-1(h)), then the
issuance of any shares or other payments that would otherwise be made on the
date of the separation from service or within the first six months thereafter
will not be made on the originally scheduled dates and will instead be issued in
a lump sum on the date that is six months and one day after the date of the
separation from service, with the balance of the shares issued and other
payments made thereafter in accordance with the original vesting and issuance
schedule set forth above, but if and only if such delay in the issuance of the
shares and payment of the compensation is necessary to avoid the imposition of
taxation on you in respect of the shares under Section 409A of the Code. Each
installment of Performance Stock Units (and the related Dividend Equivalents)
that vests is a “separate payment” for purposes of Treasury Regulation Section
1.409A-2(b)(2).

 

20.     No Obligation to Minimize Taxes. The Company has no duty or obligation
to minimize the tax consequences to you of this Award and will not be liable to
you for any adverse tax consequences to you arising in connection with this
Award. You are hereby advised to consult with your own personal tax, financial
and/or legal advisors regarding the tax consequences of this Award and by
signing the Grant Notice, you have agreed that you have done so or knowingly and
voluntarily declined to do so.

 

 

 

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