Exhibit 99.3
MONOLITHIC POWER SYSTEMS,
INC.
EMPLOYMENT
AGREEMENT
This Employment Agreement (this
“ Agreement ”) by and between Rick Neely (the
“ Chief Financial Officer,” or “CFO
”) and Monolithic Power Systems, Inc. (the “
Company ”), is entered into as of August 17, 2005 (the
“ Effective Date ”).
WHEREAS, subject to the
Company’s satisfaction of the result of the CFO’s
background check and the commencement of the “Hire
Date” as defined in paragraph 2 below, the Company desires to
employ the CFO and the CFO desires to accept 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 CFO’s failure to perform the duties or
responsibilities of his employment, in any material respect, as
reasonably required or directed by the Board of Directors of the
Company (the “ Board ”) or the Chief Executive
Officer (the “CEO”) and the President, (or the relevant
supervising officer, manager or board of directors of a successor
company), which failure is not cured within thirty (30) days
following notice to the CFO of the poor performance which notice
describes in reasonable detail the poor performance; (ii) the CFO
personally engaging in illegal conduct that is detrimental to the
Company; (iii) the CFO being convicted of a felony; or (iv) the CFO
committing a material act of dishonesty, fraud or misappropriation
of property.
(b) “ Good Reason
” means, without the CFO’s consent, (i) a reduction by
the Company in the base salary of the CFO 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 reduction by the Company
in the kind or level of employee benefits to which the CFO is
entitled immediately prior to such reduction with the result that
the CFO’s overall benefits package is significantly reduced,
except where a substantially equivalent reduction in benefits is
applied to all other officers of the Company; (iii) a material,
adverse change in the CFO’s title, authority,
responsibilities or duties, as measured against his title,
authority, responsibilities or duties immediately prior to such
change; or (iv) the relocation of the CFO’s place of work to
a facility or a location more than fifty (50) miles from the
CFO’s then-present work location.
(c) “ Disability
” means the CFO’s inability to substantially perform
the CFO’s duties as required by the CFO’s employment
with or services to the Company as the result of the CFO’s
incapacity due to physical or mental illness.
(d) “ Change of Control
” means any of the following that occurs with respect to the
Company if the stockholders of the Company immediately before such
transaction do not retain
immediately after the transaction, in
substantially the same proportions as their ownership of shares of
the Company’s voting stock immediately before the
transaction, direct or indirect beneficial ownership of more than
fifty percent (50%) of the total combined voting power of the
outstanding voting stock of the Company or the corporation or
corporations to which the assets of the Company are
transferred:
(i) the direct or indirect sale or
exchange in a single or series of related transactions by the
Company or the stockholders of the Company of more than fifty
percent (50%) of the voting stock of the Company;
(ii) a merger or a consolidation in
which the Company is a party; or
(iii) the sale, exchange, or
transfer of all or substantially all of the assets of the
Company.
2. Employment and Duties .
The CFO shall be appointed as Chief Financial Officer of the
Company and report to the Company as of September 6, 2005
(“Hire Date”) . The CFO shall report to the Chief
Executive Officer (CEO) and President, and shall assume and
discharge such responsibilities as are mutually agreed upon by the
CFO and the CEO or the Board, and consistent with such office and
position. The CFO shall perform faithfully the duties assigned to
him to the best of his ability.
3. Compensation .
(a) In consideration of the
CFO’s services, the CFO shall be paid a base salary at the
rate of $230,000 per year during the period of employment (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 as the Compensation
Committee shall review the compensation of other executive officers
of the Company, but such increases are not guaranteed.
(b) The CFO shall be granted an
option under the Company’s 2004 Incentive Stock Option Plan
entitling him to purchase 200,000 shares of the Company’s
Common Stock (the “ ISO ”), as set forth more
fully in the Stock Option Agreement therefor.
(c) The CFO shall participate in the
Company bonus plan. Executive’s annual target bonus will be
payable upon achievement of personal and company specific
performance objectives established by the Board, CEO or the
Compensation Committee of the Board.
4. At-Will Employment . The
Company and the CFO acknowledge that the CFO’s employment is
and shall continue at all times to be at-will, as defined under
applicable law. If the CFO’s employment terminates for any
reason, the CFO 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 or other
written agreements with the CFO at the time of
termination.
5. Benefits . The CFO,
together with his 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. The CFO shall also be entitled to fifteen days of paid
time off (PTO) annually.
6. Termination for Cause and
Voluntary Termination without Good Reason . In the event that
the CFO resigns from the Company without Good Reason, or the
Company terminates the CFO’s employment for Cause, the CFO
shall not receive any compensation or benefits under this Agreement
on account of such termination, except for obligations accrued at
such time. The CFO’s rights under any applicable Company
benefit plans upon such termination shall be determined under the
provisions of the
