Document:

Bonus Compensation Plan

 Exhibit 10.4B 
 XOMA Ltd. 
 Bonus Compensation Plan 
  

	I.	Introduction and Summary. 

 This document
describes the XOMA Ltd. (“XOMA” or the “Company”) Bonus Compensation Plan (the “Plan”), as approved by the Company’s Board of Directors (the “Board of Directors” or the “Board”). The Plan became
effective on January 1, 2007, subject to Board and shareholder approval, [both of which took place on May 22, 2007]. Subject to the ability of the Board of Directors to terminate the Plan at any time, the Plan applies to fiscal years
ending December 31, 2007 and each December 31 thereafter. 
 All employees having the status of “Employee” on
January 1 of a particular Plan Period and who are not eligible to participate in XOMA’s Management Incentive Compensation Plan (the “MICP”) or CEO Incentive Compensation Plan are eligible to participate in the Plan for that Plan
Period and, depending on the performance of the Company, earn incentive compensation (“Incentive Compensation”). (Article III contains the definitions of certain terms not otherwise defined in the places where such terms first appear in
the Plan.) The CEO shall designate those eligible employees who will participate in the Plan. New employees joining XOMA during a Plan Period, who thereby meet the eligibility criteria for participation in the Plan, will be considered at the
discretion of the CEO for participation in the Plan on a pro rata basis. The CEO will not participate in the Plan. 
 After the conclusion of
each applicable Plan Period, the Board of Directors and the Compensation Committee of the Board of Directors (the “Compensation Committee”) will make a determination as to the performance of XOMA and Plan participants in meeting Company
Objectives. Prior to the commencement of each Plan Period, the Board of Directors acting on the advice of the Compensation Committee, will establish a target Incentive Compensation pool (“Target Incentive Compensation Pool”). The Target
Incentive Compensation Pool will be expressed as a percentage of the aggregate annual Base Salaries of all participants in the Plan for the applicable Plan Period. Awards to individual participants will vary depending on (1) the achievement of
Company Objectives; (2) the size of the Target Incentive Compensation Pool; and (3) the individual’s Base Salary. Awards may be lower than the Target Incentive Compensation Pool on the basis of the calculation of the extent to which
XOMA’s Company Objectives have been met. Awards to individuals who are subject to, but fail to meet, a Company-initiated performance improvement plan may also be reduced or eliminated. 
 Individual awards will be granted in cash and common shares of XOMA based on the average market value of the common shares for the ten trading days prior
to the date of the award. Each award will be comprised of 50% cash and 50% in fully-vested common shares of XOMA based on the market value formula set forth above. The distribution date of awards under the Plan for each Plan Period will be the same
for all participants and is expected to be set 

 
no later than the March 15 immediately following the end of such Plan Period. 
 Questions concerning the Plan should be forwarded to the Vice President of Human Resources. In all instances, the written provisions of the Plan and
other determinations of the Compensation Committee and the Board of Directors shall govern and be final. 
  

	II.	Purposes. 

 To build a company team that will
achieve XOMA’s goals and objectives, to recognize individual efforts, to attract and retain highly motivated individuals and to encourage outstanding performance and contributions to XOMA. 
  

	III.	Definitions. 

 For the purpose of the Plan,
the following definitions will apply: 
  

	A.	Base Salary. The term “Base Salary” means an individual’s total base salary in each Plan Period before any deferred tax reductions, including overtime and
shift differential pay, but excluding moving allowances, participation in clinical studies, incentive or bonus payments, imputed income due to fringe benefits such as group insurance plans, and other compensatory items of this type.

  

	B.	Company Objectives. The term “Company Objectives” means that list of company objectives approved from time to time by the Board of Directors in its sole discretion
for each Plan Period. The objectives may be based on financial goals, scientific or commercial progress, profits, return on investments or any other criteria established by the Board of Directors. 

  

	C.	Employee. The term “Employee” means any individual on the XOMA payroll rendering services for XOMA whose normal work week is 30 hours or more (excluding
consultants, advisors, and other similar individuals providing services to XOMA). 

  

	D.	Plan Period. Subject to Article VI, the term “Plan Period” means the fiscal period from January 1 to December 31, 2007 and, thereafter, each fiscal year
ending December 31. 

  

	E.	Plan Term. Subject to Article VI, the term “Plan Term” means the period commencing on January 1, 2007 and continuing until the termination of the Plan by the
Board of Directors. 

  

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	IV.	Plan Mechanics. 

  

	A.	Eligibility. All Employees having status as such on January 1 of a particular Plan Period and who are not eligible to participate in the MICP or XOMA’s CEO
Incentive Compensation Plan are eligible for participation in the Plan for such Plan Period. The CEO shall designate in writing the employees who will participate in the Plan. An individual who becomes an Employee who meets the eligibility criteria
for participation in the Plan after the beginning of a Plan Period will be considered by the Compensation Committee or the CEO, as the case may be, for participation in the Plan and, if designated in writing to participate, such Employee will have
her/his award pro rated as of the date of eligibility determined by the Compensation Committee or the CEO, as the case may be. An Employee participating in the Plan who becomes eligible to participate in the MICP during a Plan Period will remain
eligible to receive an award under the Plan for that portion of such Plan Period preceding the date such Employee first became eligible to participate in the MICP. 

  

	B.	Length of Plan. Subject to Article VI, the Plan will be effective for the Plan Term. 

  

	C.	Incentive Plan. 

  

	 	1.	Determination of Amounts Available for Incentive Compensation. 

 a. Prior to the commencement of each Plan Period (or, with respect to the 2007 Plan Period, prior to or upon receipt of Board and shareholder approval of the Plan), the Compensation Committee acting on behalf of the
Board of Directors in its sole discretion will determine the Target Incentive Compensation Pool. As soon as practicable after the end of each Plan Period, the Compensation Committee will determine whether and to what extent the Company Objectives
have been met. If a determination is made that XOMA has not met the Company Objectives to the extent required, the Compensation Committee may decline to award any Incentive Compensation. 
 b. Each year during the Plan Term, the Required Minimum Company Objective Percentage will be 70%. 
 c. The Target Incentive Compensation Pool is expressed as a percentage of the aggregate annual Base Salaries of the participants in the Plan. The final
Incentive Compensation pool (“Final Incentive Compensation Pool”) will be determined by utilizing the method of calculation of the extent to which XOMA’s Company Objectives have been met for the applicable Plan Period as set forth in
this Article IV. 
  

	 	2.	Calculation of Individual Incentive Awards. 

 a. It
is the intention of the Compensation Committee and the Board of Directors that awards to participants shall vary depending on: (1) the extent of collective achievement of Company Objectives; and (2) each participant’s Base Salary.

  

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 b. The bonus opportunity range for participants in the Plan expressed as a percentage of Base Salaries at
the beginning of a Plan Period is as follows: 
  

							
	Minimum	  	Target	 	 	Maximum	 
	2.5%	  	5	%	 	7.5	%

 c. If the Company’s target results are achieved, the Target Contribution Percentage is
awarded. If results between the target and the upper limit scenario are achieved, the Target Contribution Percentage is increased proportionately up to a maximum of 150% of the Target Contribution Percentage (the “Maximum Percentage
Limitation”). No percentage contribution in excess of the Maximum Percentage Limitation will be awarded. Alternatively, if target results are not met but results greater than the lower limit scenario are achieved, the Target Contribution
Percentage will be decreased proportionately to a minimum of 50% of the Target Contribution Percentage. Achievements below the lower limit scenario will result in a 0% contribution from the applicable Company Objective. 
 d. The Company’s performance will be rated as soon as practicable following the conclusion of the applicable Plan Period in the exercise of the sole
discretion of the individual or group indicated below. The payout percentages are based solely on the Company’s performance and outstanding performance by an individual will not result in an above target payout. 
 e. Individual awards to any Employee who (i) at any time during the applicable Plan Period is subject to a Company-initiated performance improvement
plan, and (ii) fails to achieve the objectives set forth in such performance improvement plan within the time period prescribed therein may be reduced or eliminated in management’s discretion. Determination of awards for any Employee who
continues to be subject to such a performance improvement plan after the end of the applicable Plan Period will be deferred until after the time period prescribed in such plan for achievement of its objectives. 
 f. The total value of all awards made for the applicable Plan Period will not exceed the amount of the Final Incentive Compensation Pool determined for
that Plan Period. 
  

	 	3.	Awards to Participants. 

 a. Approval. All
awards will be approved following the end of a Plan Period by the Compensation Committee acting on the advice of the Board of Directors and the CEO. 
 b. Distribution of Incentive Awards. The distribution dates for awards will be established by the Board of Directors acting on the advice of the Compensation Committee. It is expected that distributions will normally be made in March
of the succeeding year of the applicable Plan Period. 
  

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 c. Taxes and Withholding. Each participant will bear any Federal, state, and local taxes accruing
with respect to any award under the Plan. As required by law, XOMA will withhold in cash from any distributions amounts required for Federal and state withholding tax purposes. With respect to awards in common shares, arrangements for the payment of
withholding tax in cash satisfactory to XOMA must be made prior to the date of any distribution. 
 d. Termination of Participation.

 i. Subject to other provisions hereof, if a participant’s employment is terminated for any reason, or for no reason, on or before
December 31 of any Plan Period, such participant shall forfeit all rights to Incentive Compensation as yet unpaid pursuant to the Plan. 
 ii. If an Employee changes employment status from full-time to part-time (less than 30 hours per week), any such change will terminate participation in the Plan and all rights to payments awarded for any Plan Period but payable in
subsequent years, unless the CEO determines in her/his sole discretion, that such Employee should continue to participate. 
 iii. A
participant may elect to withdraw, without prejudice, from the Plan at any time. 
 e. Eligibility for Distribution. Subject to other
provisions hereof, a participant must also be an Employee of the Company continuously from the conclusion of any Plan Period up to and including the date of distribution of the award to be eligible to receive such distribution. 
 f. Change in Control Exception. Notwithstanding any other provision hereof, if within one year after a “change in control” (as defined
below), a participant’s employment with XOMA is involuntarily terminated other than for cause, then all awards authorized but not yet distributed to such participant shall be distributed to such participant. 
 For the purposes of this subsection, a “change in control” shall have occurred if any person (as defined in Section 13 of
the Securities Exchange Act of 1934, as amended) acquires shares of voting capital shares, (other than directly from XOMA) and thereby becomes the owner of more than 20% of XOMA’s outstanding shares of voting capital shares (on a fully diluted
basis) or XOMA enters into a merger, amalgamation or other consolidation (other than one in connection with a voluntary change of corporate domicile or similar reorganization or recapitalization transaction) in which the shareholders of XOMA (as
determined immediately prior to the merger, amalgamation or other consolidation) do not own at least 50% of the outstanding shares of voting capital shares of the surviving or continuing entity after the merger, amalgamation or other consolidation.
Solely for the purposes of the foregoing, a termination shall be deemed to have been made for “cause” in the event a participant is terminated for any of the 

  

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following reasons: 
 i. the participant’s
continued failure to substantially perform her or his duties with XOMA, or 
 ii. gross misconduct. 
 g. Death of a Participant. In the event of the death of a participant while an Employee after the completion of any Plan Period but prior to the
distribution, the award will be made as soon as practicable to the deceased participant’s beneficiary as indicated on the participant’s group insurance enrollment card. 
  

	V.	No Right to Employment. 

 Nothing in the Plan
shall give any participant the right to continued employment by XOMA. Furthermore, under XOMA policy, employment at XOMA is “at will” and can be terminated at any time by either party, with or without cause and with or without notice.

  

	VI.	Plan Modification. 

 The Plan may be modified
or terminated by the Board of Directors at any time. 
  

	VII.	Miscellaneous. 

  

	A.	Nontransferability. Awards shall not be transferable by a participant except by will or the laws of descent and distribution and shall be exercisable during the lifetime of a
participant only by such participant or his or her guardian or legal representative. A participant’s rights under the Plan may not be pledged, mortgaged, hypothecated, or otherwise encumbered, and shall not be subject to claims of the
participant’s creditors. 

  

	B.	Unfunded Status of Awards. The Plan is intended to constitute an “unfunded” plan of incentive compensation. With respect to any payments not yet made to a
participant pursuant to an award, nothing contained in the Plan or any Award shall give any such participant any rights that are greater than those of a general unsecured creditor of XOMA. 

  

 -6-Employment Agreement with Michael Hsing

 Exhibit 10.7 
 MONOLITHIC POWER SYSTEMS, INC. 
 CEO EMPLOYMENT AGREEMENT 
 This Employment Agreement (this “Agreement”) by and between Michael Hsing (the “President and Chief Executive Officer”,
(“CEO”)) and Monolithic Power Systems, Inc. (the “Company”), is entered into as of March 10, 2008 (the “Effective Date”). 
 WHEREAS, the Company desires to continue to employ the CEO and the CEO desires to continue employment with the Company on the terms and conditions set
forth below; 
 NOW, THEREFORE, the parties hereto agree as follows: 
 1. Certain Definitions. For purposes of this Agreement: 
 (a) “Cause” means (i) the CEO’s failure to perform the duties or responsibilities of the CEO’s employment,
in any material respect, as reasonably required or directed by the Board of Directors of the Company (the “Board”), which failure is not cured within 30 days following written notice to the CEO of the poor performance describing in
reasonable detail the poor performance; (ii) the CEO personally engaging in illegal conduct that is detrimental to the Company; (iii) the CEO being convicted of or pleading nolo contendere to a felony or other crime involving moral
turpitude; or (iv) the CEO committing a material act of dishonesty, fraud or misappropriation of property. 
 (b)
“Good Reason” means, without the CEO’s written consent, (i) a reduction by the Company in the CEO’s Base Salary (as defined in Section 3(a)) as in effect immediately prior to such reduction, except where a
substantially equivalent percentage reduction in base salary is applied to all other officers of the Company; (ii) a material, adverse change in the CEO’s authority, responsibilities or duties, as measured against the CEO’s authority,
responsibilities or duties immediately prior to such change; or (iv) the relocation of the CEO’s place of work to a facility or a location more than 50 miles from the CEO’s then-present work location, but only if such relocation
results in an increased one-way commute of at least 50 miles based on the CEO’s primary residence at the time such relocation is announced. 
 (c) “Disability” means the CEO’s inability to substantially perform the CEO’s duties as required by the CEO’s employment with or services to the Company as the result of the CEO’s
incapacity due to physical or mental illness. 
 (d) “Change in Control” means the occurrence of (a) a
change in the ownership of the Company, (b) a change in the effective control of the Company, or (c) a change in the ownership of a substantial portion of the assets of the Company, as such terms are defined in Treasury Regulation
Section 409A-3(i)(5), but only to the extent that such change also constitutes one or more 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; 

 (ii) The consummation of the sale or disposition by the Company of all or substantially
all of the Company’s assets; 
 (iii) A change in the composition of the Board occurring within a 12-month period, as a
result of which less 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, or (B) are elected, or nominated
for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination; or 
 (iv) 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 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. 
 2. Employment and Duties. The CEO
shall remain President and Chief Executive Officer of the Company as of the Effective Date. The CEO shall report to the Board, and shall assume and discharge such responsibilities as are mutually agreed upon by the Board, and consistent with
such office and position. The CEO shall perform faithfully the duties assigned to the CEO to the best of his or her ability. 
 3.
Compensation. 
 (a) In consideration of the CEO’s services, the CEO shall be paid a base salary at the rate of
$400,000 per year during the period of employment, as increased, if at all, pursuant to the following sentence (the “Base Salary”), to be paid in installments in accordance with the Company’s standard payroll practices. This
Base Salary shall be reviewed for increases at least annually by the Compensation Committee on the same basis and at the same time as the Compensation Committee shall review the compensation of other executive officers of the Company including any
review for the next fiscal year which has not yet occurred, but such increases are not guaranteed. 
 (b) Subject to approval
by the Compensation Committee, the CEO shall, from time to time, receive equity awards under the Company’s 2004 Stock Option Plan and such related grant agreements. 
 (c) The CEO shall participate in the Company bonus plan. The CEO’s annual target bonus will be payable on (i) achievement of
personal and company specific performance objectives and (ii) the date established in writing by the Board, CEO or the Compensation Committee of the Board, subject to the CEO’s continued Company employment through such payment date, except
as otherwise specifically provided in this Agreement. 
 4. At-Will Employment. The Company and the CEO acknowledge that the
CEO’s employment is and shall continue at all times to be at-will, as defined under applicable law, meaning that either the CEO or the Company may terminate the CEO’s employment at any time and for any reason without any liability
therefore, except as expressly provided in this 

  

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Agreement. If the CEO’s employment terminates for any reason, the CEO shall not be entitled to any payments, benefits, damages, awards or compensation
other than as provided by this Agreement, or as may otherwise be available in accordance with the Company’s established employee plans and policies at the time of termination. 
 5. Benefits. The CEO, together with the CEO’s spouse and dependent children, if any, shall be permitted, to the extent eligible, to
participate at the Company’s expense in any group medical, dental, life insurance and disability insurance plans, or similar benefit plans of the Company that are available to other executive officers in each case pursuant to the terms and
conditions of each such plan or program to the extent that the Company determines that participation on such terms and conditions would not result in unintended tax consequences. The CEO shall also be entitled to twenty (20) days of paid time off
(PTO) annually or as otherwise agreed. 
 6. Termination for Cause and Voluntary Termination without Good Reason. In the event that
the CEO resigns from the Company without Good Reason, or the Company terminates the CEO’s employment for Cause, the CEO shall not receive any compensation or benefits under this Agreement on account of, or after, such termination, except as
required by applicable law. The CEO’s rights under any applicable Company benefit plans upon such termination shall be determined under the official terms of the respective benefit plans. 
 7. Termination without Cause and Voluntary Termination with Good Reason. Subject to Section 10 below, if (i) the Company terminates the
CEO’s employment without Cause or the CEO resigns from the Company for Good Reason, and (ii) such termination constitutes a “Separation from Service” within the meaning of Internal Revenue Code Section 409A, then the CEO
shall receive severance payments and partially-accelerated vesting of certain equity grants (together the “Severance Benefits”) pursuant to sub-sections 7(a) and (b) below. For purposes of this Agreement, “Separation
from Service” shall mean the CEO’s cessation of employee status and shall be deemed to occur at such time as the level of the bona fide services the CEO is to perform in employee status (or as a consultant or other independent
contractor) permanently decreases to a level that is not more than twenty percent of the average level of services the CEO rendered in employee status during the immediately preceding 36 months (or such shorter period for which the CEO may have
rendered such service). Any such determination as to Separation from Service, however, shall be made in accordance with the applicable standards of the Treasury Regulations issued under Section 409A of the Internal Revenue Code of 1986, as
amended (“Code”). For purposes of determining whether the CEO has incurred a Separation from Service, the CEO will be deemed to continue in “employee” status for so long as the CEO remains in the employ of one or more
members of the Employer Group, subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance. “Employer Group” means the Company and any other corporation or
business controlled by, controlling or under common control with, the Company as determined in accordance with Sections 414(b) and (c) of the Code and the Treasury Regulations thereunder. 
 (a) Severance Payments. After the date of such termination, the Company shall, for a period of twelve (12) months following
the date of such termination, (i) continue to pay the CEO at a rate based on the CEO’s then-current Base Salary and target annual bonus, in installments in accordance with the Company’s standard payroll practices (as in effect 

  

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immediately prior to such termination), and (ii) pay the CEO and the CEO’s dependents’ COBRA premiums under all Company-sponsored group health
plans (other than the Company’s Flexible Spending Account) that such individuals are enrolled in at the time of such termination (to the extent that the Company determines that doing so would not result in unintended tax consequences). In the
event such termination occurs within one year following a Change of Control, then such payments and benefits shall continue for a period of one year after the date of such termination. Notwithstanding the foregoing, however, (A) payments and
benefits under clauses (i) and (ii) shall terminate immediately upon the date the CEO commences to provide services to another entity for compensation, whether present or deferred, and the CEO shall provide the Company with written notice
of the CEO’s acceptance of such a service provider position within three days thereof and (B) benefits under subsection (ii) shall cease on the date that the CEO (or the CEO’s dependents, as applicable) ceases to be eligible for
COBRA continuation coverage under the normal COBRA rules. 
 (b) Vesting Acceleration. Effective on such termination,
the CEO shall receive accelerated vesting equivalent to twelve (12) months of service beyond the date of CEO’s termination with respect to the shares subject to any grant of restricted stock or stock options (each, an “Equity
Grant”) granted to the CEO, regardless of whether granted prior to, coincident with, or after, the Effective Date; provided, however, that in the event such termination occurs within one year following a Change of Control, then one hundred
percent of the remaining shares subject to each such Equity Grant shall become vested in full and the period during which the CEO is permitted to exercise (if applicable) any such Equity Grant shall be extended for the full term of such Equity Grant
(as of the date of grant). 
 (c) Six-Month Delay. Notwithstanding anything in this Agreement to the contrary, if the
CEO is a “Specified Employee,” for purposes of Section 409A of the Code, on the date on which the CEO incurs a Separation from Service, any payment hereunder that provides for the “deferral of compensation” within the
meaning of Section 409A of the Code shall not be paid or commence to be paid on any date prior to the first business day after the date that is six (6) months following the CEO’s “Separation from Service” (the “409A
Suspension Period”); provided, however, that a payment delayed pursuant to the preceding clause shall commence earlier in the event of the CEO’s death prior to the end of the six-month period. Within 14 calendar days after the end of
the 409A Suspension Period, the CEO shall be paid a lump sum payment in cash equal to any cash payments delayed because of the preceding sentence. Thereafter, the CEO shall receive any remaining benefits as if there had not been an earlier delay.

 8. Death. In the event of the CEO’s death, except as required by applicable law, the Company shall have no obligation to pay
or provide any compensation or benefits under this Agreement. The CEO’s rights under the Company’s benefit plans in the event of the CEO’s death shall be determined under the official provisions of such benefit plans. 
 9. Disability. In the event of the CEO’s Disability, except as required by law, the Company may terminate the CEO’s employment and no
compensation or benefits will be paid or provided to the CEO under this Agreement. The CEO’s rights under the Company’s benefit plans shall be determined under the official provisions of such benefit plans. 
  

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 10. Other Activities. The CEO shall devote substantially all of the CEO’s working time and
efforts to the business and affairs of the Company and its subsidiaries and to the diligent and faithful performance of the duties and responsibilities duly assigned to the CEO pursuant to this Agreement, except for vacations, holidays and sickness.
However, to the extent that doing so does not materially interfere with the CEO’s obligations to the Company, the CEO may devote a reasonable amount of the CEO’s time to civic, community, or charitable activities and, with the prior
written approval of the Company, serve as a director of other corporations and to other types of business or public activities not expressly mentioned in this paragraph, but only to the extent that such businesses or activities are not competitive
with the Company’s actual or planned business activities. 
 11. Proprietary Information. During the period of employment and
thereafter, the CEO shall not, without the prior written consent of the Company, disclose or use for any purpose (except in the course of the CEO’s employment under this Agreement and in furtherance of the business of the Company or any of its
affiliates or subsidiaries) any confidential information or proprietary data of the Company or any of its affiliates or subsidiaries. The CEO agrees to execute the Company’s form of Proprietary Information Agreement, which is attached hereto as
Exhibit A and incorporated herein by reference. The provisions of this Section 11 shall survive the termination of this Agreement and the CEO’s employment with the Company. 
 12. Covenant Not to Solicit. Beginning with the date of the CEO’s termination and until one year thereafter, the CEO agrees that CEO will
not: 
 (i) solicit any employee of the Company or any of its affiliates or subsidiaries for employment, or 
 (ii) interfere in any manner prohibited by applicable law with the contractual or employment relationship between the Company or any of
its affiliates or subsidiaries and any employee of the Company or any of its affiliates or subsidiaries. 
 The provisions of this Section 12 shall
survive the termination of this Agreement and the CEO’s employment with the Company. 
 13. Tax Provisions. In the event that the
benefits provided for in the Agreement, when aggregated with any other payments or benefits received by the CEO, would (i) constitute “parachute payments” within the meaning of Section 280G of the Code, and (ii) would be
subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the CEO’s benefits hereunder shall be either 
 (a) delivered in full, or 
 (b) delivered as to such lesser extent that would result in no portion of such benefits being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local
income taxes and the Excise Tax, results in the receipt by the CEO on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. Unless the
Company and the CEO otherwise agree in writing, any determination required under this paragraph shall be made in writing by the Company’s independent public accountants (the 

  

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“Accountants”) whose determination shall be conclusive and binding upon the CEO and the Company for all purposes. For purposes of making the
calculations required by this paragraph, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of
the Code. The Company and the CEO shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this paragraph. The provisions of this Section 14 shall survive
the termination of this Agreement and the CEO’s employment with the Company. 
 14. Arbitration. Except as set forth in this
Section 14, the Company and the CEO agree to resolve any disputes by binding arbitration. The Company and the CEO understand that this agreement to arbitrate covers all disputes that the CEO may have against the Company or its related entities
or employees, including those that relate to the CEO’s employment or termination of employment (for example claims of unlawful discrimination or harassment). The arbitration will be conducted by an impartial arbitrator experienced in employment
law (selected from the JAMS panel of arbitrators) in accordance with JAMS’ then-current employment arbitration rules (except as otherwise provided in this agreement). The Company and the CEO waive the right to institute a court action, except
for requests for injunctive relief pending arbitration, and understand that they are giving up their right to a jury trial. The arbitrator’s award and opinion shall be in writing and in the form typically rendered in labor and employment
arbitrations. The COMPANY will pay any filing fee and the fees and costs of the arbitrator, unless the CEO initiates the claim, in which case the CEO only will be required to contribute an amount equal to the filing fee for a claim initiated in a
court of general jurisdiction in the California. Each of the Company and the CEO shall be responsible for their own attorneys’ fees and costs; however, the arbitrator may award attorneys’ fees to the prevailing party, if permitted by
applicable law. This arbitration agreement does not prohibit either the Company or the CEO from filing a claim with an administrative agency (e.g., the EEOC), nor does it apply to claims for workers’ compensation or unemployment benefits, or
claims for benefits under an employee welfare or pension plan that specifies a different dispute resolution procedure. The arbitration shall take place in Santa Clara County, California, unless the parties agree otherwise. 
 15. Former Employers. The CEO is not subject to any employment, confidentiality, or other agreement or restriction that would prevent the CEO from
fully satisfying the CEO’s duties under this Agreement or that would be violated if the CEO did so. Without the Company’s prior written approval, the CEO promises that the CEO will not: 
 (a) disclose proprietary information belonging to a former employer or other entity without its written permission; 
 (b) contact any former employer’s customers or employees to solicit their business or employment on behalf of the Company or its
affiliates; or 
 (c) distribute announcements about or otherwise publicize my employment with the Company or its affiliates.

  

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 The CEO will indemnify and hold the Company harmless from any liabilities, including defense costs, it
may incur because the CEO is alleged to have broken any of these promises or improperly revealed or used such proprietary information or to have threatened to do so, or if a former employer challenges the CEO’s entering into this Agreement or
rendering services pursuant to it. 
 16. Department of Homeland Security Verification Requirement. The CEO agrees to timely file all
documents required by the Department of Homeland Security to verify the CEO’s identity and the CEO’s lawful employment in the United States. Notwithstanding any other provision of this Agreement, if the CEO fails to meet any such
requirements promptly after receiving a written request from the Company to do so, the CEO agrees that the CEO’s employment shall terminate immediately and that the CEO shall not be entitled to any compensation or benefits from the Company of
any type. 
 17. Governing Law. To the extent not governed by U.S. federal law, this Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to agreements made and to be performed entirely within such state, without regard to principles of conflicts of laws. 
 18. Entire Agreement. This Agreement and all existing Equity Grants represent the entire agreement and understanding between the parties as to the
subject matter hereof and thereof and supersede all prior or contemporaneous agreements as to the subject matter hereof and thereof, whether written or oral including, but not limited to, that certain Employment Agreement between the Company and the
CEO, dated August 23, 2002, which is hereby terminated and superseded in its entirety. No modification or amendment to this Agreement will be effective unless in writing signed by the party to be charged. Any subsequent change or changes
in the CEO’s duties, salary or compensation will not affect the validity or scope of this Agreement. The CEO understands and agrees that the Company may, in its sole discretion, amend or terminate any Company-sponsored employee benefit plans.

 19. Notices. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the CEO, mailed notices shall be addressed to him at the home address that he most recently
communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its CEO. 
 20. Waiver etc. No waiver, alteration, or modification, if any, of the provisions of this Agreement shall be binding unless in writing and signed
by duly authorized representatives of the parties hereto. If either party should waive any breach of any provisions of this Agreement, such party shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other
provision of this Agreement. 
 21. Severability. If any term of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, then the remainder of the terms of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. 
  

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 22. Counterparts. This Agreement may be executed in counterparts, which together will constitute
one instrument. 
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 -8- 

 The parties have executed this Agreement as of the date first above written. 
  

			
	MONOLITHIC POWER SYSTEMS, INC.
		
	By:	 	/s/ Herbert Chang
	Name:	 	Herbert Chang
	Title:	 	Chairman, MPS Compensation Committee
	
	“CEO”
		
	By:	 	/s/ Michael Hsing
	Name:	 	Michael Hsing

  

 -9-

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