8-KMaterial AgreementsExhibits & Filings

MONOLITHIC POWER SYSTEMS INC 8-K Report, Material Agreement (May 15, 2006)

Filed May 15, 2006For Securities:MPWR

Summary

Monolithic Power Systems, Inc. (MPWR) filed an 8-K on May 15, 2006, reporting a material definitive agreement related to the compensation of its non-employee directors. Effective May 9, 2006, the Board of Directors adopted a new annual compensation plan for these individuals. The plan introduces a base annual retainer of $15,000 for non-employee directors. Additional annual retainers are specified for committee chairs: $10,000 for the Compensation Committee Chair and $25,000 for the Audit Committee Chair. Eligibility for this cash compensation is contingent upon the director owning less than one percent of the company's outstanding common stock. The plan also includes equity incentives, with initial option grants of 30,000 shares upon appointment and annual grants of 15,000 shares for directors who have served at least six months prior to the annual meeting.

Key Highlights

  • 1New annual compensation plan for non-employee directors adopted effective May 9, 2006.
  • 2Base annual retainer for non-employee directors set at $15,000.
  • 3Additional annual retainers for committee chairs: $10,000 for Compensation Committee Chair and $25,000 for Audit Committee Chair.
  • 4Eligibility for cash compensation requires directors to own less than 1% of outstanding common stock.
  • 5Initial stock option grant of 30,000 shares upon appointment for non-employee directors.
  • 6Annual stock option grant of 15,000 shares for continuing non-employee directors who have served at least six months.
  • 7This filing is primarily informational regarding director compensation, not a financial performance report.

Frequently Asked Questions

The main purpose of this 8-K filing is to disclose a material definitive agreement concerning the adoption of a new annual compensation plan for Monolithic Power Systems, Inc.'s non-employee directors.

Non-employee directors will receive a base annual retainer of $15,000. Committee Chairs will receive additional retainers: $10,000 for the Compensation Committee Chair and $25,000 for the Audit Committee Chair.

Yes, non-employee directors will receive an initial stock option grant of 30,000 shares upon appointment. They will also receive an annual option grant of 15,000 shares if they have served on the Board for at least the preceding six months.

Yes, to be eligible for the cash compensation, a non-employee director must own less than one percent of the company's outstanding Common Stock as of the annual meeting of stockholders.