Document:

Registrant's 2004 Employee Stock Purchase Plan

 Exhibit 10.3 
  
 MONOLITHIC POWER SYSTEMS, INC. 
  
 2004 EMPLOYEE STOCK PURCHASE PLAN 
  
 The following constitutes the provisions of the 2004 Employee Stock Purchase Plan of Monolithic Power Systems, Inc.

  
 1. Purpose. The purpose of the Plan is to provide
Employees with an opportunity to purchase Common Stock through accumulated payroll deductions. It is the intention of the Company to have the Plan qualify as an “employee stock purchase plan” under Section 423 of the Code. The provisions
of the Plan, accordingly, will be construed so as to extend and limit Plan participation in a manner that is consistent with the requirements of that section of the Code. 
  
 2. Definitions. 
  
 (a) “Administrator” means the Board or any committee thereof designated by the Board in accordance with Section 14.

  
 (b) “Board” means the Board
of Directors of the Company. 
  
 (c)
“Change of Control” means the occurrence of any of the following events: 
  
 (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner”
(as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities; or

  
 (ii) The consummation of the sale or
disposition by the Company of all or substantially all of the Company’s assets; or 
  
 (iii) The consummation of a merger or consolidation of the Company, with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of the Company, or such surviving entity or its parent outstanding immediately after such merger or consolidation. 
  
 (iv) A change in the composition of the Board, as a result
of which fewer than a majority of the Directors are Incumbent Directors. “Incumbent Directors” means Directors who either (A) are Directors as of the effective date of the Plan (pursuant to Section 23), or (B) are elected, or nominated for
election, to the Board with the affirmative votes of at least a majority of those Directors whose election or nomination was not in connection with any transaction described in subsections (i), (ii) or (iii) or in connection with an actual or
threatened proxy contest relating to the election of Directors of the Company. 
  

 (d) “Code” means the Internal Revenue Code of 1986, as amended. Any
reference to a section of the Code herein will be a reference to any successor or amended section of the Code. 
  
 (e) “Common Stock” means the common stock of the Company. 
  
 (f) “Company” means Monolithic Power Systems, Inc., a Delaware corporation. 
  
 (g) “Compensation” means an Employee’s
base straight time gross earnings, commissions (to the extent such commissions are an integral, recurring part of compensation), overtime and shift premium, but exclusive of payments for incentive compensation, bonuses and other compensation.

  
 (h) “Designated Subsidiary”
means any Subsidiary that has been designated by the Administrator from time to time in its sole discretion as eligible to participate in the Plan. 
  
 (i) “Director” means a member of the Board. 
  
 (j) “Employee” means any individual who is a common law employee of an Employer and is
customarily employed for at least twenty (20) hours per week and more than five (5) months in any calendar year by the Employer. For purposes of the Plan, the employment relationship will be treated as continuing intact while the individual is on
sick leave or other leave of absence approved by the Employer. Where the period of leave exceeds ninety (90) days and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship will be
deemed to have terminated on the 91st day of such leave. The Administrator, in its discretion, from time to time may, prior to an Enrollment Date for all options to be granted on such Enrollment Date, determine (on a uniform and nondiscriminatory
basis) that the definition of Employee will or will not include an individual if he or she: (1) has not completed at least two years of service since his or her last hire date (or such lesser period of time as may be determined by the Administrator
in its discretion), (2) customarily works not more than 20 hours per week (or such lesser period of time as may be determined by the Administrator in its discretion), (3) customarily works not more than 5 months per calendar year (or such lesser
period of time as may be determined by the Administrator in its discretion), (4) is an officer or other manager, or (5) is a highly compensated employee under Section 414(q) of the Code. 
  
 (k) “Employer” means any one or all of the Company and its Designated Subsidiaries.

  
 (l) “Enrollment Date” means
the first Trading Day of each Offering Period. 
  
 (m) “Exchange Act” means the Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder. 
  

(n) “Exercise Date” means the last day of each Offering Period. The first Exercise Date under the Plan shall be August
15, 2005. 
  

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 (o) “Fair Market Value” means, as of any date, the value of Common Stock
determined as follows: 
  
 (i) If the Common
Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value will be the closing sales price
for the Common Stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the date of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable, or;

  
 (ii) If the Common Stock is regularly quoted
by a recognized securities dealer but selling prices are not reported, its Fair Market Value will be the mean of the closing bid and asked prices for the Common Stock on the date of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable, or; 
  
 (iii) In the absence of an established market for the Common Stock, its Fair Market Value will be determined in good faith by the Administrator, or; 
  
 (iv) For purposes of the Enrollment Date of the first Offering Period under the Plan, the Fair Market Value
will be the initial price to the public as set forth in the final prospectus deemed to be included within the registration statement on Form S-1 filed with the Securities and Exchange Commission for the initial public offering of the Common Stock
(the “Registration Statement”). 
  
 (p)
“Offering Periods” means the periods of approximately six (6) months during which an option granted pursuant to the Plan may be exercised, (i) commencing on the first Trading Day on or after February 15 of each year and terminating
on the first Trading Day on or following August 15, approximately six (6) months later, and (ii) commencing on the first Trading Day on or after August 15 of each year and terminating on the first Trading Day on or following February 15,
approximately six (6) months later; provided, however, that the first Offering Period under the Plan shall commence with the first Trading Day on or after the date on which the Securities and Exchange Commission declares the Company’s
Registration Statement effective and ending on the first Trading Day on or after August 15, 2005; and provided, further, that the second Offering Period under the Plan shall commence on the first Trading Day on or after February 15, 2005. The
duration and timing of Offering Periods may be changed pursuant to Section 4 of this Plan. 
  
 (q) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of
the Code. 
  
 (r) “Plan” means
this 2004 Employee Stock Purchase Plan. 
  
 (s)
“Purchase Price” means an amount equal to eighty-five percent (85%) of the Fair Market Value of a share of Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower; provided however, that the Purchase Price
may be adjusted by the Administrator pursuant to Section 20. 
  
 (t) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code. 
  
 (u) “Trading Day” means a day on which the U.S. national stock exchanges and the Nasdaq
System are open for trading. 
  

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 3. Eligibility. 
  
 (a) First Offering Period. Any individual who is an Employee immediately prior to the first Offering
Period under the Plan will be automatically enrolled in the first Offering Period. 
  
 (b) Subsequent Offering Periods. Any individual who is an Employee as of the Enrollment Date of any future Offering Period will be
eligible to participate in such Offering Period, subject to the requirements of Section 5. 
  
 (c) Limitations. Any provisions of the Plan to the contrary notwithstanding, no Employee will be granted an option under the Plan
(i) to the extent that, immediately after the grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company or any Parent or Subsidiary of
the Company and/or hold outstanding options to purchase such stock possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital stock of the Company or of any Parent or Subsidiary of the Company, or
(ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans (as defined in Section 423 of the Code) of the Company or any Parent or Subsidiary of the Company accrues at a rate which exceeds twenty-five
thousand dollars ($25,000) worth of stock (determined at the Fair Market Value of the stock at the time such option is granted) for each calendar year in which such option is outstanding at any time. 
  
 4. Offering Periods. The Plan shall be implemented by consecutive
Offering Periods with a new Offering Period commencing on the first Trading Day on or after February 15 and August 15 of each year, or on such other date as the Administrator shall determine, and continuing thereafter until terminated in accordance
with Section 20; provided, however, that the first Offering Period under the Plan shall commence with the first Trading Day on or after the date on which the Securities and Exchange Commission declares the Company’s Registration Statement
effective and ending on the first Trading Day on or after August 15, 2005; and provided, further, that the second Offering Period under the Plan shall commence on the first Trading Day on or after February 15, 2005. The Administrator shall have the
power to change the duration of Offering Periods (including the commencement dates thereof) with respect to future offerings without stockholder approval if such change is announced prior to the scheduled beginning of the first Offering Period to be
affected thereafter. 
  
 5. Participation. 
  
 (a) First Offering Period. An Employee who has become
a participant in the first Offering Period under the Plan pursuant to Section 3(a) will be entitled to continue his or her participation in such Offering Period only if he or she submits to the Company’s payroll office (or its designee) a
properly completed subscription agreement authorizing payroll deductions in the form provided by the Administrator for such purpose (i) no earlier than the effective date of the filing of the Company’s Registration Statement on Form S-8 with
respect to the shares of Common Stock issuable under the Plan (the “Effective Date”) and (ii) no later than five (5) business days from the Effective Date or such other period of time as the Administrator may determine (the
“Enrollment Window”). A participant’s failure to submit the subscription agreement during the Enrollment Window pursuant to this Section 5(a) will result in the automatic termination of his or her participation in the first Offering
Period under the Plan. 
  

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 (b) Subsequent Offering Periods. An Employee who is eligible to participate in the
Plan pursuant to Section 3(b) may become a participant by (i) submitting to the Company’s payroll office (or its designee), on or before a date prescribed by the Administrator prior to an applicable Enrollment Date, a properly completed
subscription agreement authorizing payroll deductions in the form provided by the Administrator for such purpose, or (ii) following an electronic or other enrollment procedure prescribed by the Administrator. 
  
 6. Payroll Deductions. 
  
 (a) At the time a participant enrolls in the Plan pursuant
to Section 5, he or she will elect to have payroll deductions made on each payday during the Offering Period in an amount not exceeding 15% of the Compensation which he or she receives on each such payday. 
  
 (b) Payroll deductions authorized by a participant will
commence on the first payday following the Enrollment Date and will end on the last payday in the Offering Period to which such authorization is applicable, unless sooner terminated by the participant as provided in Section 10; provided, however,
that for the first Offering Period under the Plan, payroll deductions will commence on the first payday on or following the end of the Enrollment Window. 
  
 (c) All payroll deductions made for a participant will be credited to his or her account under the Plan and will be withheld in whole
percentages only. A participant may not make any additional payments into such account. 
  
 (d) A participant may discontinue his or her participation in the Plan as provided in Section 10, or may change the rate of his or her
payroll deductions during the Offering Period by (i) properly completing and submitting to the Company’s payroll office (or its designee), on or before a date prescribed by the Administrator prior to an applicable Exercise Date, a new
subscription agreement authorizing the change in payroll deduction rate in the form provided by the Administrator for such purpose, or (ii) following an electronic or other procedure prescribed by the Administrator; provided, however, that a
participant may only make one payroll deduction change during each Offering Period. If a participant has not followed such procedures to change the rate of payroll deductions, the rate of his or her payroll deductions will continue at the originally
elected rate throughout the Offering Period and future Offering Periods (unless terminated as provided in Section 10). The Administrator may, in its sole discretion, limit the nature and/or number of payroll deduction rate changes that may be made
by participants during any Offering Period. Any change in payroll deduction rate made pursuant to this Section 6(d) will be effective as of the first full payroll period following five (5) business days after the date on which the change is made by
the participant (unless the Administrator, in its sole discretion, elects to process a given change in payroll deduction rate more quickly). 
  
 (e) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(c), a
participant’s payroll deductions may be decreased to zero percent (0%) at any time during a Offering Period. Subject to Section 423(b)(8) of the Code and Section 3(c) hereof, payroll deductions will recommence at the rate originally elected by
the participant effective as of the beginning of the first Offering Period which is scheduled to end in the following calendar year, unless terminated by the participant as provided in Section 10. 
  

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 (f) At the time the option is exercised, in whole or in part, or at the time some or all
of the Company’s Common Stock issued under the Plan is disposed of, the participant must make adequate provision for the Company’s federal, state, or other tax withholding obligations, if any, which arise upon the exercise of the option or
the disposition of the Common Stock. At any time, the Company may, but will not be obligated to, withhold from the participant’s compensation the amount necessary for the Company to meet applicable withholding obligations, including any
withholding required to make available to the Company any tax deductions or benefits attributable to the sale or early disposition of Common Stock by the Employee. 
  
 7. Grant of Option. On the Enrollment Date of each Offering Period, each Employee participating in such Offering
Period will be granted an option to purchase on each Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of shares of Common Stock determined by dividing such participant’s payroll deductions accumulated
prior to such Exercise Date and retained in the participant’s account as of the Exercise Date by the applicable Purchase Price; provided that in no event will a participant be permitted to purchase during each Offering Period more than 2,000
shares of Common Stock (subject to any adjustment pursuant to Section 19), and provided further that such purchase will be subject to the limitations set forth in Sections 3(c) and 13. The Employee may accept the grant of such option (i) with
respect to the first Offering Period under the Plan, by submitting a properly completed subscription agreement in accordance with the requirements of Section 5(a) on or before the last day of the Enrollment Window, and (ii) with respect to any
future Offering Period under the Plan, by electing to participate in the Plan in accordance with the requirements of Section 5(b). The Administrator may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximum
number of shares of Common Stock that a participant may purchase during each Offering Period. Exercise of the option will occur as provided in Section 8, unless the participant has withdrawn pursuant to Section 10. The option will expire on the last
day of the Offering Period. 
  
 8. Exercise of Option.

  
 (a) Unless a participant withdraws from the
Plan as provided in Section 10, his or her option for the purchase of shares of Common Stock will be exercised automatically on the Exercise Date, and the maximum number of full shares subject to option will be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her account. No fractional shares of Common Stock will be purchased; any payroll deductions accumulated in a participant’s account which are not sufficient to purchase
a full share will be retained in the participant’s account for the subsequent Offering Period, subject to earlier withdrawal by the participant as provided in Section 10. Any other monies left over in a participant’s account after the
Exercise Date will be returned to the participant. During a participant’s lifetime, a participant’s option to purchase shares hereunder is exercisable only by him or her. 
  
 (b) Notwithstanding any contrary Plan provision, if the Administrator determines that, on a given Exercise
Date, the number of shares of Common Stock with respect to which options are to be exercised may exceed (i) the number of shares of Common Stock that were available for sale under the Plan on the Enrollment Date of the applicable Offering Period, or
(ii) the number of shares of Common Stock available for sale under the Plan on such Exercise Date, the Administrator may in its sole discretion (x) provide that the Company will make a pro rata allocation of the shares of Common Stock available for
purchase on such Enrollment Date or Exercise Date, as applicable, 

  

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in as uniform a manner as will be practicable and as it will determine in its sole discretion to be equitable among all participants exercising options to
purchase Common Stock on such Exercise Date, and continue all Offering Periods then in effect, or (y) provide that the Company will make a pro rata allocation of the shares of Common Stock available for purchase on such Enrollment Date or Exercise
Date, as applicable, in as uniform a manner as will be practicable and as it will determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and terminate any or all
Offering Periods then in effect pursuant to Section 20. The Company may make pro rata allocation of the shares of Common Stock available on the Enrollment Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any
authorization of additional shares of Common Stock for issuance under the Plan by the Company’s shareholders subsequent to such Enrollment Date. 
  
 9. Delivery. As soon as administratively practicable after each Exercise Date on which a purchase of shares of Common Stock occurs, the Company
will arrange the delivery to each participant, as appropriate, the shares purchased upon exercise of his or her option in a form determined by the Administrator (in its sole discretion) and pursuant to rules established by the Administrator. The
Company may permit or require that shares be deposited directly with a broker designated by the Company or to a designated agent of the Company, and the Company may utilize electronic or automated methods of share transfer. The Company may require
that shares be retained with such broker or agent for a designated period of time and/or may establish other procedures to permit tracking of disqualifying dispositions of such shares. No participant will have any voting, dividend, or other
shareholder rights with respect to shares of Common Stock subject to any option granted under the Plan until such shares have been purchased and delivered to the participant as provided in this Section 9. 
  
 10. Withdrawal. 
  
 (a) Under procedures established by the Administrator, a
participant may withdraw all but not less than all the payroll deductions credited to his or her account and not yet used to exercise his or her option under the Plan at any time by (i) submitting to the Company’s payroll office (or its
designee) a written notice of withdrawal in the form prescribed by the Administrator for such purpose, or (ii) following an electronic or other withdrawal procedure prescribed by the Administrator. All of the participant’s payroll deductions
credited to his or her account will be paid to such participant as promptly as practicable after the effective date of his or her withdrawal and such participant’s option for the Offering Period will be automatically terminated, and no further
payroll deductions for the purchase of shares will be made for such Offering Period. If a participant withdraws from an Offering Period, payroll deductions will not resume at the beginning of the succeeding Offering Period unless the participant
re-enrolls in the Plan in accordance with the provisions of Section 5. 
  
 (b) A participant’s withdrawal from an Offering Period will not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted by the Company or in succeeding
Offering Periods which commence after the termination of the Offering Period from which the participant withdraws. 
  
 11. Termination of Employment. Upon a participant’s ceasing to be an Employee, for any reason, he or she will be deemed to have elected to
withdraw from the Plan and the payroll deductions credited to such participant’s account during the Offering Period but not yet used to purchase shares of Common Stock under the Plan will be returned to such participant or, in the case of his
or her death, to the person or persons entitled thereto under Section 15, and such participant’s option will be automatically terminated. The preceding sentence notwithstanding, a participant who receives payment in lieu of notice of
termination of employment will be treated as continuing to be 

  

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an Employee for the participant’s customary number of hours per week of employment during the period in which the participant is subject to such payment
in lieu of notice. 
  
 12. Interest. No interest will
accrue on the payroll deductions of a participant in the Plan. 
  
 13. Stock. 
  
 (a) Subject to
adjustment upon changes in capitalization of the Company as provided in Section 19, the maximum number of shares of Common Stock which will be made available for sale under the Plan will be the sum of 200,000 shares of Common Stock plus an annual
increase to be added on the first day of each fiscal year of the Company beginning in fiscal year 2005, equal to the lesser of (i) 1,000,000 shares of Common Stock, (ii) 2% of the outstanding shares of Common Stock on such date (for purposes of
which calculation only shares actually outstanding shall be counted and not shares issuable upon conversion or exercise of other securities) or (iii) an amount determined by the Board. 
  
 (b) Shares of Common Stock to be delivered to a participant under the Plan will be registered in the name of
the participant or in the name of the participant and his or her spouse. 
  
 14. Administration. The Board or a committee of members of the Board who will be appointed from time to time by, and will serve at the pleasure of, the Board, will administer the Plan. The Administrator will
have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility, to adjudicate all disputed claims filed under the Plan and to establish such procedures that it deems necessary for
administration of the Plan (including, without limitation, to adopt such procedures and sub-plans as are necessary or appropriate to permit the participation in the Plan by employees who are foreign nationals or employed outside the United States).
The Administrator, in its sole discretion and on such terms and conditions as it may provide, may delegate to one or more individuals all or any part of its authority and powers under the Plan. Every finding, decision and determination made by the
Administrator (or its designee) will, to the full extent permitted by law, be final and binding upon all parties. 
  
 15. Designation of Beneficiary. 
  
 (a) A participant may designate a beneficiary who is to receive any shares of Common Stock and cash, if any, from the participant’s
account under the Plan in the event of such participant’s death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such participant of such shares and cash. In addition, a participant may designate a
beneficiary who is to receive any cash from the participant’s account under the Plan in the event of such participant’s death prior to exercise of the option. If a participant is married and the designated beneficiary is not the spouse,
spousal consent will be required for such designation to be effective. 
  
 (b) Such designation of beneficiary may be changed by the participant at any time. In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the
time of such participant’s death, the Company will deliver such shares and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the
Company may designate. 
  

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 (c) All beneficiary designations under this Section 15 will be made in such form and
manner as the Administrator may prescribe from time to time. 
  
 16. Transferability. Neither payroll deductions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive shares of Common Stock under the Plan may be assigned, transferred,
pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 15) by the participant. Any such attempt at assignment, transfer, pledge or other disposition will be without effect,
except that the Company may treat such act as an election to withdraw from an Offering Period in accordance with Section 10. 
  
 17. Use of Funds. All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and
the Company will not be obligated to segregate such payroll deductions. Until shares of Common Stock are issued under the Plan (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company),
a participant will only have the rights of an unsecured creditor with respect to such shares. 
  
 18. Reports. Individual accounts will be maintained for each participant in the Plan. Statements of account will be given to participating Employees at least annually, which statements will set forth the
amounts of payroll deductions, the Purchase Price, the number of shares of Common Stock purchased and the remaining cash balance, if any. 
  
 19. Adjustments, Dissolution, Liquidation or Change of Control. 
  
 (a) Adjustments. In the event that any dividend or other distribution (whether in the form of cash,
Common Stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Common Stock or other securities of the
Company, or other change in the corporate structure of the Company affecting the Common Stock such that an adjustment is determined by the Administrator (in its sole discretion) to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan, then the Administrator will, in such manner as it may deem equitable, adjust the number and class of Common Stock which may be delivered under the Plan, the Purchase Price
per share and the number of shares of Common Stock covered by each option under the Plan which has not yet been exercised, and the numerical limits of Sections 7 and 13. 
  
 (b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the
Company, the Offering Period then in progress will be shortened by setting a new Exercise Date (the “New Exercise Date”), and will terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided
otherwise by the Board. The New Exercise Date will be before the date of the Company’s proposed dissolution or liquidation. The Board will notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that
the Exercise Date for the participant’s option has been changed to the New Exercise Date and that the participant’s option will be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn
from the Offering Period as provided in Section 10. 
  

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 (c) Change of Control. In the event of a Change of Control, each outstanding
option will be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the option, any Offering
Period then in progress will be shortened by setting a new Exercise Date (the “New Exercise Date”) and such Offering Period will end on the New Exercise Date. The New Exercise Date will be before the date of the Company’s proposed
Change of Control. The Board will notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant’s option has been changed to the New Exercise Date and that the
participant’s option will be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10. 
  
 20. Amendment or Termination. 
  
 (a) The Administrator may at any time and for any reason
terminate or amend the Plan. Except as provided in Section 19, no such termination can affect options previously granted under the Plan, provided that an Offering Period may be terminated by the Administrator on any Exercise Date if the
Administrator determines that the termination or suspension of the Plan is in the best interests of the Company and its stockholders. Except as provided in Section 19 and this Section 20, no amendment may make any change in any option theretofore
granted which adversely affects the rights of any participant. To the extent necessary to comply with Section 423 of the Code (or any successor rule or provision or any other applicable law, regulation or stock exchange rule), the Company will
obtain stockholder approval in such a manner and to such a degree as required. 
  
 (b) Without stockholder consent and without regard to whether any participant rights may be considered to have been “adversely
affected,” the Administrator will be entitled to change the Offering Periods, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in the Company’s processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each participant properly correspond with amounts withheld from the participant’s
Compensation, and establish such other limitations or procedures as the Administrator determines in its sole discretion advisable which are consistent with the Plan. 
  
 (c) In the event the Administrator determines that the ongoing operation of the Plan may result in
unfavorable financial accounting consequences, the Board may, in its discretion and, to the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting consequence including, but not limited to: 
  
 (i) altering the Purchase Price for any Offering Period
including an Offering Period underway at the time of the change in Purchase Price; 
  
 (ii) shortening any Offering Period so that Offering Period ends on a new Exercise Date, including an Offering Period underway at the time
of the Board action; and 
  

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 (iii) allocating shares. 
  
 Such modifications or amendments will not require stockholder approval or the consent of any Plan participants. 
  
 21. Notices. All notices or other communications by a participant to
the Company under or in connection with the Plan will be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof. 
  
 22. Conditions Upon Issuance of Shares. Shares of Common Stock will
not be issued with respect to an option under the Plan unless the exercise of such option and the issuance and delivery of such shares pursuant thereto will comply with all applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, including the rules and regulations promulgated thereunder, the Exchange Act and the requirements of any stock exchange upon which the shares may then be listed, and will be further subject to the
approval of counsel for the Company with respect to such compliance. 
  
 As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being purchased only for investment
and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law. 
  
 23. Term of Plan. The Plan will become effective upon the earlier to
occur of its adoption by the Board or its approval by the stockholders of the Company. It will continue in effect for a term of twenty (20) years, unless sooner terminated under Section 20. 
  

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 SAMPLE SUBSCRIPTION AGREEMENT 
  
 MONOLITHIC POWER SYSTEMS, INC. 
  
 2004 EMPLOYEE STOCK PURCHASE PLAN 
  
 SUBSCRIPTION AGREEMENT 
  

			
	                      Original
Application
	 	Offering Date:                    
	                      Change in
Payroll Deduction Rate
	 	 
	                      Change of
Beneficiary(ies)
	 	 

  

	1.	                         hereby elects to participate
in the Monolithic Power Systems, Inc. 2004 Employee Stock Purchase Plan (the “Plan”) and subscribes to purchase shares of the Company’s Common Stock in accordance with this Subscription Agreement and the Plan.

  

	2.	I hereby authorize payroll deductions from each paycheck in the amount of
                        % of my Compensation on each payday (from 0 to 15%) during the Offering Period in accordance with
the Plan. (Please note that no fractional percentages are permitted.) 

  

	3.	I understand that said payroll deductions will be accumulated for the purchase of shares of Common Stock at the applicable Purchase Price determined in accordance with the Plan. I
understand that if I do not withdraw from an Offering Period, any accumulated payroll deductions will be used to automatically exercise my option. 

  

	4.	I have received a copy of the complete Plan. I understand that my participation in the Plan is in all respects subject to the terms of the Plan. I understand that my ability to
exercise the option under this Subscription Agreement is subject to shareholder approval of the Plan. 

  

	5.	Shares of Common Stock purchased for me under the Plan should be issued in the name(s) of Employee or Employee and Spouse only. 

  

	6.	 I understand that if I dispose of any shares received by me pursuant to the Plan within 2 years after the Offering Date (the first day of the Offering Period during
which I purchased such shares) or one year after the Exercise Date, I will be treated for federal income tax purposes as having received ordinary income at the time of such disposition in an amount equal to the excess of the fair market value of the
shares at the time such shares were purchased by me over the price which I paid for the shares. I hereby agree to notify the Company in writing within 30 days after the date of any disposition of my shares and I will make adequate provision for
Federal, state or other tax withholding obligations, if any, which arise upon the disposition of the Common Stock. The Company may, but will not be obligated to, withhold from my compensation the amount necessary to meet any applicable
withholding obligation including any withholding necessary to make available to the Company any tax deductions or 

  

	 	 
benefits attributable to sale or early disposition of Common Stock by me. If I dispose of such shares at any time after the expiration of the 2-year and
1-year holding periods, I understand that I will be treated for federal income tax purposes as having received income only at the time of such disposition, and that such income will be taxed as ordinary income only to the extent of an amount equal
to the lesser of (1) the excess of the fair market value of the shares at the time of such disposition over the purchase price which I paid for the shares, or (2) 15% of the fair market value of the shares on the first day of the Offering Period.
The remainder of the gain, if any, recognized on such disposition will be taxed as capital gain. 

  

	7.	I hereby agree to be bound by the terms of the Plan. The effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the Plan.

  

	8.	In the event of my death, I hereby designate the following as my beneficiary(ies) to receive all payments and/or shares due me under the Plan: 

  

							
	NAME: (Please print)	 	 

					
	(First)	 	(Middle)	  	(Last)

					
			
	 	 	 	  	 
	Relationship	 	 	  	 
			
	 	 	 	  	 
	Percentage Benefit	 	 	  	(Address)

					
		
	NAME: (please print)	 	 

					
	(First)	 	(Middle)	  	(Last)

					
			
	 	 	 	  	 
	Relationship	 	 	  	 
			
	 	 	 	  	 
	Percentage of Benefit	 	 	  	(Address)

  

 -2- 

			
	 Employee’s Social
 Security Number:
	  	 
		
	Employee’s Address:	  	 
		
	 	  	 
		
	 	  	 

  
 I UNDERSTAND THAT THIS SUBSCRIPTION
AGREEMENT WILL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME. 
  

							
				
	 Dated:
	 	  	 	 	 	  
	 	 	 	 	 	 	 Signature of Employee

				
	  	 	  	 	 	 	  
	 	 	 	 	 	 	 Spouse’s Signature (If beneficiary other than spouse)

  

 -3- 

 SAMPLE WITHDRAWAL NOTICE 
  
 MONOLITHIC POWER SYSTEMS, INC. 
  
 2004 EMPLOYEE STOCK PURCHASE PLAN 
  
 NOTICE OF WITHDRAWAL 
  
 The undersigned participant in the Offering Period of the Monolithic Power Systems, Inc. 2004 Employee Stock Purchase Plan which began on
                            ,
                 (the “Offering Date”) hereby notifies the Company that he or she hereby withdraws from the Offering Period. He or she hereby directs
the Company to pay to the undersigned as promptly as practicable all the payroll deductions credited to his or her account with respect to such Offering Period. The undersigned understands and agrees that his or her option for such Offering Period
will be automatically terminated. The undersigned understands further that no further payroll deductions will be made for the purchase of shares in the current Offering Period and the undersigned will be eligible to participate in succeeding
Offering Periods only by delivering to the Company a new Subscription Agreement. 
  

	
	Name and Address of Participant:
	
	 
	
	 
	
	 
	
	 Signature:

	
	 

			
		
	 Date:Form of Directors' and Officers' Indemnification Agreement

  
 Exhibit 10.4

  
 MONOLITHIC POWER SYSTEMS, INC. 
  
 INDEMNIFICATION AGREEMENT 
  
 This Indemnification Agreement (“Agreement”) is effective as of
                ,              by and between Monolithic Power Systems, Inc., a Delaware
corporation (the “Company”), and the indemnitee listed on the signature page hereto (“Indemnitee”). 
  
 WHEREAS, the Company desires to attract and retain the services of highly qualified individuals, such as Indemnitee, to serve the Company and its related
entities; 
  
 WHEREAS, in order to induce Indemnitee to continue
to provide services to the Company, the Company wishes to provide for the indemnification of, and the advancement of expenses to, Indemnitee to the maximum extent permitted by law; 
  
 WHEREAS, the Company and Indemnitee recognize the continued difficulty in obtaining liability insurance for the
Company’s directors, officers, employees, agents and fiduciaries, the significant increases in the cost of such insurance and the general reductions in the coverage of such insurance; 
  
 WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers, employees, agents and fiduciaries to expensive litigation risks at the same time as the availability and coverage of liability insurance has been severely limited; and

  
 WHEREAS, the Company and Indemnitee desire to continue to have
in place the additional protection provided by an indemnification agreement and to provide indemnification and advancement of expenses to the Indemnitee to the maximum extent permitted by Delaware law. 
  
 NOW, THEREFORE, in consideration for Indemnitee’s services to the
Company, the Company and Indemnitee hereby agree as follows: 
  
 1. Certain Definitions. 
  
 (a)
“Change in Control” shall mean: 
  
 (1)
The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this part (1), the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from
the Company or any acquisition from other stockholders where (A) such acquisition was approved in advance by the Board of Directors of the Company and (B) such acquisition would not constitute a change of control under 

  

 
part (3) of this definition, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of part (3) of this definition; or 
  
 (2) Individuals who, as of the date hereof, constitute the
Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or
nomination for election by the stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board of Directors; or 
  
 (3) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following
such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the Company resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities,
as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation
except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the Board of Directors of the corporation resulting from such Business Combination were members of the Incumbent Board
at the time of the execution of the initial agreement, or of the action of the Board of Directors, providing for such Business Combination; or 
  
 (4) Approval by the stockholders of a complete liquidation or dissolution of the Company. 
  
 (b) “Claim” shall mean with respect to a Covered
Event: any threatened, pending or completed action, suit, proceeding or alternative dispute resolution mechanism, or any hearing, inquiry or investigation that Indemnitee in good faith believes might lead to the institution of any such action, suit,
proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative, investigative or other. 
  

 -2- 

 (c) References to the “Company” shall include, in addition to the Company, any
constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger to which the Company (or any of its wholly owned subsidiaries) is a party which, if its separate existence had continued, would have had power
and authority to indemnify its directors, officers, employees, agents or fiduciaries, so that if Indemnitee is or was a director, officer, employee, agent or fiduciary of such constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, Indemnitee shall stand in the same position under the provisions of
this Agreement with respect to the resulting or surviving corporation as Indemnitee would have with respect to such constituent corporation if its separate existence had continued. 
  
 (d) “Covered Event” shall mean any event or occurrence related to the fact that Indemnitee is or
was a director, officer, employee, agent or fiduciary of the Company, or any subsidiary of the Company, or is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership,
joint venture, trust or other enterprise, or by reason of any action or inaction on the part of Indemnitee while serving in such capacity. 
  
 (e) “Disinterested Director” shall mean a director of the Company who is not and was not a party to the matter in respect of
which indemnification is sought by the Indemnitee. 
  
 (f) “Expenses” shall mean any and all expenses (including attorneys’ fees and all other costs, expenses and obligations incurred in connection with investigating, defending, being a witness in or participating in (including
on appeal), or preparing to defend, to be a witness in or to participate in, any action, suit, proceeding, alternative dispute resolution mechanism, hearing, inquiry or investigation), judgments, fines, penalties and amounts paid in settlement (if
such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld), actually incurred, of any Claim and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed
receipt of any payments under this Agreement. 
  
 (g) “Expense Advance” shall mean a payment to Indemnitee pursuant to Section 3 of Expenses in advance of the settlement of or final judgment in any action, suit, proceeding or alternative dispute resolution mechanism, hearing,
inquiry or investigation which constitutes a Claim. 
  
 (h) “Independent Legal Counsel” shall mean a law firm, a member of a law firm, or an independent practitioner, that is experienced in matters of corporation law and shall include any person who, under the applicable standards of
professional conduct then prevailing, would not have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee’s rights under Section 2(d) hereof. 
  
 (i) References to “other enterprises” shall
include employee benefit plans; references to “fines” shall include any excise taxes assessed on Indemnitee with respect to an employee benefit plan; and references to “serving at the request of the Company” shall include any
service as a director, officer, employee, agent or fiduciary of the Company which imposes duties on, 

  

 -3- 

 
or involves services by, such director, officer, employee, agent or fiduciary with respect to an employee benefit plan, its participants or its
beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have acted in a manner
“not opposed to the best interests of the Company” as referred to in this Agreement. 
  
 (j) “Reviewing Party” shall have the meanings as set forth in Section 2(d). 
  
 (k) “Section” refers to a section of this
Agreement unless otherwise indicated. 
  
 2.
Indemnification. 
  
 (a)
Indemnification of Expenses. Subject to the provisions of Section 2(b) below, the Company shall indemnify Indemnitee for Expenses to the fullest extent permitted by law if Indemnitee was or is or becomes a party to or witness or other
participant in, or is threatened to be made a party to or witness or other participant in, any Claim (whether by reason of or arising in part out of a Covered Event), including all interest, assessments and other charges paid or payable in
connection with or in respect of such Expenses (and such interest, assessments and other charges shall be deemed to be “Expenses” for all purposes under this Agreement). 
  
 (b) Review of Indemnification Obligations. Notwithstanding the foregoing, in the event any Reviewing
Party shall have determined (in a written opinion, in any case in which Independent Legal Counsel is the Reviewing Party) that Indemnitee is not permitted to be indemnified hereunder under applicable law, (i) the Company shall have no further
obligation under Section 2(a) to make any payments to Indemnitee not made prior to such determination by such Reviewing Party, and (ii) the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all
Expenses theretofore paid in indemnifying Indemnitee; provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee is entitled to be
indemnified hereunder under applicable law, any determination made by any Reviewing Party that Indemnitee is not entitled to be indemnified hereunder under applicable law shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expenses theretofore paid in indemnifying Indemnitee until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed). Indemnitee’s obligation to
reimburse the Company for any Expenses shall be unsecured and no interest shall be charged thereon. 
  
 (c) Indemnitee Rights on Unfavorable Determination; Binding Effect. If any Reviewing Party determines that Indemnitee substantively
is not entitled to be indemnified hereunder in whole or in part under applicable law, Indemnitee shall have the right to commence litigation seeking an initial determination by the court or challenging any such determination by such Reviewing Party
or any aspect thereof, including the legal or factual bases therefor, and, subject to the provisions of Section 16, the Company hereby consents to service of process and to appear in any such proceeding. Absent such litigation, any determination by
any Reviewing Party shall be conclusive and binding on the Company and Indemnitee. 
  

 -4- 

 (d) Reviewing Party; Change in Control. The determination of Indemnitee’s
entitlement hereunder shall be made by the Reviewing Party as follows: (1) if requested by the Indemnitee, by Independent Legal Counsel, or (2) if no request is made by the Indemnitee for a determination by Independent Legal Counsel, (i) by the
Board of Directors by a majority vote of a quorum consisting of Disinterested Directors, or (ii) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested
Directors so directs, by Independent Legal Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the Indemnitee. In the event the determination of the permissability of indemnification under applicable law is
to be made by Independent Legal Counsel at the request of the Indemnitee, the Independent Legal Counsel shall be selected by the Board of Directors unless there shall have occurred within two years prior to the date of the commencement of the
Proceeding for which indemnification is claimed a “Change in Control” (as defined in Section 1(a)), in which case the Independent Legal Counsel shall be selected by the Indemnitee unless the Indemnitee shall request that such selection be
made by the Board of Directors. Such counsel, among other things, shall render its written opinion to the Company and Indemnitee as to whether and to what extent Indemnitee would be permitted to be indemnified hereunder under applicable law and the
Company agrees to abide by such opinion. The Company agrees to pay the reasonable fees of the Independent Legal Counsel referred to above and to indemnify fully such counsel against any and all expenses (including attorneys’ fees), claims,
liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. Notwithstanding any other provision of this Agreement, the Company shall not be required to pay Expenses of more than one Independent Legal
Counsel in connection with all matters concerning a single Indemnitee, and such Independent Legal Counsel shall be the Independent Legal Counsel in connection with any or all other Indemnitees unless (i) the Company otherwise determines or (ii) any
Indemnitee shall provide a written statement setting forth in detail a reasonable objection to such Independent Legal Counsel representing other Indemnitees. If it is so determined that indemnification of the Indemnitee is permitted, payment to the
Indemnitee shall be made within ten (10) days after such determination. 
  
 (e) Mandatory Payment of Expenses. Notwithstanding any other provision of this Agreement other than Section 11 hereof, to the extent that Indemnitee has been successful on the merits or otherwise, including,
without limitation, the dismissal of an action without prejudice, in defense of any Claim, Indemnitee shall be indemnified against all Expenses incurred by Indemnitee in connection therewith. 
  
 3. Expense Advances. 
  
 (a) Obligation to Make Expense Advances. Upon receipt
of a written undertaking by or on behalf of the Indemnitee to repay such amounts if it shall ultimately be determined that the Indemnitee is not permitted to be indemnified therefor by the Company, the Company shall make Expense Advances to
Indemnitee. 
  
 (b) Form of Undertaking.
Any written undertaking by the Indemnitee to repay any Expense Advances hereunder shall be unsecured and no interest shall be charged thereon. 
  
 (c) Determination of Reasonable Expense Advances. The parties agree that for the purposes of any Expense Advance for which
Indemnitee has made written demand to the 

  

 -5- 

 
Company in accordance with this Agreement, all Expenses included in such Expense Advance that are certified by affidavit of Indemnitee’s counsel as
being reasonable shall be presumed conclusively to be reasonable. 
  
 4. Procedures for Indemnification and Expense Advances. 
  
 (a) Timing of Payments. All payments of Expenses (including without limitation Expense Advances) by the Company to the Indemnitee pursuant to this Agreement shall be made to the fullest extent permitted by law
as soon as practicable after written demand by Indemnitee therefor is presented to the Company, but in no event later than ten (10) days after such written demand by Indemnitee is presented to the Company. 
  
 (b) Notice/Cooperation by Indemnitee. Indemnitee
shall, as a condition precedent to Indemnitee’s right to be indemnified or Indemnitee’s right to receive Expense Advances under this Agreement, give the Company notice in writing as soon as practicable of any Claim made against Indemnitee
for which indemnification will or could be sought under this Agreement, provided, however, that the failure or delay of an Indemnitee to so notify the Company shall relieve the Company of its obligations to indemnify Indemnitee for such Claim only
to the extent that the defense of such Claim by the Company is actually prejudiced in such Claim as a direct result of such failure or delay. Notice to the Company shall be directed to the Secretary of the Company at the address shown on the
signature page of this Agreement (or such other address as the Company shall designate in writing to Indemnitee). In addition, Indemnitee shall give the Company such information and cooperation as it may reasonably require and as shall be within
Indemnitee’s power. 
  
 (c) Right of
Indemnitee to Bring Suit. If Indemnitee is not paid in full by the Company within ten (10) days after a written notice has been presented to the Company, the Indemnitee may at any time thereafter bring suit against the Company to recover the
unpaid amount of the Claim and, if successful in whole or in part, the Indemnitee shall be entitled to be paid also the expense (including attorneys’ fees) of prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending a Proceeding in advance of its final disposition where the required undertaking has been tendered to the Company) that the Indemnitee has not met the standards of conduct that make
it permissible under the Delaware General Corporation Law for the Company to indemnify the Indemnitee for the amount claimed. The burden of proving such a defense shall be on the Company. Neither the failure of the Company (including its Board of
Directors or Independent Legal Counsel, as applicable) to have made a determination prior to the commencement of such action that indemnification of the Indemnitee is permitted under the circumstances because he has met the applicable standard of
conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Company (including its Board of Directors or Independent Legal Counsel, as applicable) that the Indemnitee had not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct. 
  
 (d) No Presumptions; Burden of Proof. For purposes of this Agreement, the termination of any Claim by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that
a 

  

 -6- 

 
court has determined that indemnification is not permitted by this Agreement or applicable law. In addition, neither the failure of any Reviewing Party to
have made a determination as to whether Indemnitee has met any particular standard of conduct or had any particular belief, nor an actual determination by any Reviewing Party that Indemnitee has not met such standard of conduct or did not have such
belief, prior to the commencement of legal proceedings by Indemnitee to secure a judicial determination that Indemnitee should be indemnified under this Agreement or applicable law, shall be a defense to Indemnitee’s claim or create a
presumption that Indemnitee has not met any particular standard of conduct or did not have any particular belief. In connection with any determination by any Reviewing Party or otherwise as to whether the Indemnitee is entitled to be indemnified
hereunder, the burden of proof shall be on the Company to establish that Indemnitee is not so entitled. 
  
 (e) Notice to Insurers. If, at the time of the receipt by the Company of a notice of a Claim pursuant to Section 4(b) hereof, the
Company has liability insurance in effect which may cover such Claim, the Company shall give prompt notice of the commencement of such Claim to the insurers in accordance with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Claim in accordance with the terms of such policies. 
  
 (f) Selection of Counsel. In the event the Company
shall be obligated hereunder to provide indemnification for or make any Expense Advances with respect to the Expenses of any Claim, the Company, if appropriate, shall be entitled to assume the defense of such Claim with counsel approved by
Indemnitee (which approval shall not be unreasonably withheld) upon the delivery to Indemnitee of written notice of the Company’s election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such
counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees or expenses of separate counsel subsequently employed by or on behalf of Indemnitee with respect to the same Claim; provided that, (i) Indemnitee
shall have the right to employ Indemnitee’s separate counsel in any such Claim at Indemnitee’s expense and (ii) if (A) the employment of separate counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall
have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of any such defense, or (C) the Company shall not continue to retain such counsel to defend such Claim, then the fees and expenses
of Indemnitee’s separate counsel shall be Expenses for which Indemnitee shall receive indemnification or Expense Advances hereunder. 
  
 5. Additional Indemnification Rights; Nonexclusivity. 
  
 (a) Scope. The Company hereby agrees to indemnify the Indemnitee to the fullest extent permitted by law, notwithstanding that such
indemnification is not specifically authorized by the other provisions of this Agreement, the Company’s Certificate of Incorporation, the Company’s Bylaws or by statute. In the event of any change after the date of this Agreement in any
applicable law, statute or rule which expands the right of a Delaware corporation to indemnify a member of its board of directors or an officer, employee, agent or fiduciary, it is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits afforded by such change. In the event of any change in any applicable law, statute or rule which narrows the right of a Delaware corporation to indemnify a member of its board of directors or an officer, employee,
agent 

  

 -7- 

 
or fiduciary, such change, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this
Agreement or the parties’ rights and obligations hereunder except as set forth in Section 11(a) hereof. 
  
 (b) Nonexclusivity. The indemnification and the payment of Expense Advances provided by this Agreement shall be in addition to any
rights to which Indemnitee may be entitled under the Company’s Certificate of Incorporation, its Bylaws, any other agreement, any vote of stockholders or disinterested directors, the General Corporation Law of the State of Delaware, or
otherwise. The indemnification and the payment of Expense Advances provided under this Agreement shall continue as to Indemnitee for any action taken or not taken while serving in an indemnified capacity even though subsequent thereto Indemnitee may
have ceased to serve in such capacity. 
  
 6. No Duplication of
Payments. The Company shall not be liable under this Agreement to make any payment in connection with any Claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy of the Company
or provision of the Company’s Certificate of Incorporation or Bylaws) of the amounts otherwise payable hereunder. 
  
 7. Indemnification of Affiliates of Indemnitee. If an Affiliate (as defined below), employee, family member, partner or agent of Indemnitee is, or is
threatened to be made, a party to or a participant in any Claim, then the Affiliate, employee, family member, partner or agent of Indemnitee shall be entitled to all of the indemnification rights and remedies under this Agreement to the same extent
as Indemnitee. For purposes of this Agreement, “Affiliate” shall mean with respect to Indemnitee any individual, corporation, partnership (including any partners of such partnership), limited liability company (including any members or
managing members of such limited liability company), association, trust or other entity or organization directly or indirectly controlling, controlled by or under common control with such Indemnitee. 
  
 8. Partial Indemnification. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a portion of Expenses incurred in connection with any Claim, but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion of such Expenses to which Indemnitee is entitled. 
  
 9.
Mutual Acknowledgement. Both the Company and Indemnitee acknowledge that in certain instances, federal law or applicable public policy may prohibit the Company from indemnifying its directors, officers, employees, agents or fiduciaries under
this Agreement or otherwise. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the Securities and Exchange Commission to submit the question of indemnification to a court in
certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee. 
  
 10. Liability Insurance. To the extent the Company maintains liability insurance applicable to directors, officers, employees, agents or
fiduciaries, Indemnitee shall be covered by such policies in such a manner as to provide Indemnitee the same rights and benefits as are provided to the most favorably insured of the Company’s directors, if Indemnitee is a director; or of the
Company’s officers, if Indemnitee is not a director of the Company but is an officer; or of the Company’s 

  

 -8- 

 
key employees, agents or fiduciaries, if Indemnitee is not an officer or director but is a key employee, agent or fiduciary. 
  
 11. Exceptions. Notwithstanding any other provision of this Agreement,
the Company shall not be obligated pursuant to the terms of this Agreement: 
  
 (a) Excluded Action or Omissions. To indemnify Indemnitee for Expenses resulting from acts, omissions or transactions for which Indemnitee is prohibited from receiving indemnification by applicable law.

  
 (b) Claims Initiated by Indemnitee. To
indemnify or make Expense Advances to Indemnitee with respect to Claims initiated or brought voluntarily by Indemnitee and not by way of defense, counterclaim or cross-claim, except (i) with respect to actions or proceedings brought to establish or
enforce a right to indemnification under this Agreement or any other agreement or insurance policy or under the Company’s Certificate of Incorporation or Bylaws now or hereafter in effect relating to Claims for Covered Events, (ii) in specific
cases if the Board of Directors has approved the initiation or bringing of such Claim, or (iii) as otherwise required under Section 145 of the Delaware General Corporation Law, regardless of whether Indemnitee ultimately is determined to be entitled
to such indemnification or insurance recovery, as the case may be. 
  
 (c) Lack of Good Faith. To indemnify Indemnitee for any Expenses incurred by the Indemnitee with respect to any action instituted (i) by Indemnitee to enforce or interpret this Agreement, if a court having
jurisdiction over such action determines as provided in Section 14 that each of the material assertions made by the Indemnitee as a basis for such action was not made in good faith or was frivolous, or (ii) by or in the name of the Company to
enforce or interpret this Agreement, if a court having jurisdiction over such action determines as provided in Section 14 that each of the material defenses asserted by Indemnitee in such action was made in bad faith or was frivolous. 
  
 (d) Claims Under Section 16(b). To indemnify
Indemnitee for expenses and the payment of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute. 
  
 12. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original. 
  
 13.
Binding Effect; Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns (including any direct or indirect successor by
purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), spouses, heirs and personal and legal representatives. This Agreement shall continue in effect regardless of whether Indemnitee
continues to serve as a director, officer, employee, agent or fiduciary (as applicable) of the Company or of any other enterprise at the Company’s request. 
  

14. Expenses Incurred in Action Relating to Enforcement or Interpretation. In the event that any action is instituted by Indemnitee under this
Agreement or under any liability insurance 

  

 -9- 

 
policies maintained by the Company to enforce or interpret any of the terms hereof or thereof, Indemnitee shall be entitled to be indemnified for all
Expenses incurred by Indemnitee with respect to such action (including without limitation attorneys’ fees), regardless of whether Indemnitee is ultimately successful in such action, unless as a part of such action a court having jurisdiction
over such action makes a final judicial determination (as to which all rights of appeal therefrom have been exhausted or lapsed) that each of the material assertions made by Indemnitee as a basis for such action was not made in good faith or was
frivolous. In the event of an action instituted by or in the name of the Company under this Agreement to enforce or interpret any of the terms of this Agreement, Indemnitee shall be entitled to be indemnified for all Expenses incurred by Indemnitee
in defense of such action (including without limitation costs and expenses incurred with respect to Indemnitee’s counterclaims and cross-claims made in such action), unless as a part of such action a court having jurisdiction over such action
makes a final judicial determination (as to which all rights of appeal therefrom have been exhausted or lapsed) that each of the material defenses asserted by Indemnitee in such action was made in bad faith or was frivolous. 
  
 15. Notice. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed duly given (i) if delivered by hand and signed for by the party addressed, on the date of such delivery, (ii) if mailed by domestic certified or registered mail with postage prepaid, on
the third business day after the date postmarked, (iii) one business day after the business day of deposit with Federal Express or similar overnight courier, freight prepaid, or (iv) one business day after the business day of delivery by facsimile
transmission, if delivered by facsimile transmission, with copy by first class mail, postage prepaid. Addresses for notice to either party are as shown on the signature page of this Agreement, or as subsequently modified by written notice.

  
 16. Consent to Jurisdiction. The Company and Indemnitee
each hereby irrevocably consent to the jurisdiction of the courts of the State of Delaware for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the Court of Chancery of the State of Delaware in and for New Castle County, which shall be the exclusive and only proper forum for adjudicating such a claim. 
  
 17. Severability. The provisions of this Agreement shall be severable
in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall
remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including without limitation each portion of this Agreement containing any provision held to be invalid, void
or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. 
  
 18. Choice of Law. This Agreement, and all rights, remedies,
liabilities, powers and duties of the parties to this Agreement, shall be governed by and construed in accordance with the laws of the State of Delaware, as applied to contracts between Delaware residents, entered into and performed exclusively
within the Delaware, without regard to principles of conflicts of laws. 
  

 -10- 

 19. Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to
the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such
rights. 
  
 20. Amendment and Termination. No amendment,
modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by both the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed to be or shall constitute a waiver of any
other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. 
  
 21. Integration and Entire Agreement. This Agreement sets forth the entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and agreements relating to the subject matter hereof between the parties hereto. 
  
 22. No Construction as Employment Agreement. Nothing contained in this Agreement shall be construed as giving Indemnitee any right to be retained
in the employ of the Company or any of its subsidiaries or affiliated entities. 
  

 -11- 

 IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement as of the date first
above written. 
  

			
	 MONOLITHIC POWER SYSTEMS, INC.

		
	 By:
	 	 

			
		
	 Name: 
	 	 

			
		
	 Title: 
	 	 

			
		
	 Address:
	 	 983 University Avenue, Building A

		
	 	 	 Los Gatos, CA 95032

  

	
	 AGREED TO AND ACCEPTED

	
	 
	 (Signature)

	
	 
	 (Print Name)

	
	 
	 (Address)

	
	 

  

 -12-

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