Related Party Transactions and Outside Related Director Information

Monolithic Power Systems, Inc. (MPWR)

5/1/2006 Proxy Information

We have entered into an indemnification agreement with each of our directors and officers. The indemnification agreements and our certificate of incorporation and bylaws require us to indemnify our directors and officers to the fullest extent permitted by Delaware law.

On March 15, 2001, the Company entered into a loan and security agreement with Maurice Sciammas, Vice President of Sales and Marketing, pursuant to which the Company loaned Mr. Sciammas $397,600 in connection with his purchase of 497,000 shares of restricted stock. On March 9, 2006, Mr. Sciammas repaid the principal amount of the loan in full, plus accrued interest, in accordance with the terms of the loan agreement.