NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
August 17, 2001
To the Shareholders of Supertex, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Supertex, Inc., a California corporation (the "Company"), will be held
on Friday, August 17, 2001 at 10:00 a.m., local time, at the principal
offices of the Company located at 1235 Bordeaux Drive, Sunnyvale,
California 94089, for the following purposes, as more fully described
in the Proxy Statement accompanying this Notice:
1. ELECTION OF DIRECTORS. To elect directors to serve for the ensuing
year and until their successors are elected.
2. APPROVAL OF THE ADOPTION OF THE 2001 STOCK OPTION PLAN. To approve
the adoption of the 2001 Stock Option Plan and the reservation of
2,000,000 shares of common stock.
3. RATIFICATION AND APPROVAL OF THE APPOINTMENT OF INDEPENDENT
AUDITORS. To ratify the appointment of PricewaterhouseCoopers LLP
as independent accountants of the Company for fiscal year 2002.
4. OTHER BUSINESS. To transact such other business as may properly
come before the meeting or any adjournment thereof.
Only shareholders of record at the close of business on June 15,
2001 are entitled to vote at the meeting.
All shareholders are cordially invited to attend the meeting in person.
However, to ensure your representation at the meeting, you are urged
to mark, sign, date and return the enclosed proxy card as promptly as
possible in the enclosed postage-prepaid envelope. Any shareholder
attending the meeting may vote in person even if such shareholder
returned a proxy. Please note, however, that if your shares are held
on record by a broker, bank or other nominee, and you wish to vote at
the meeting, you must obtain from the record holder a proxy in your
name.
By Order of the Board of Directors
/s/ Benedict C.K. Choy
Secretary
Sunnyvale, California
July 16, 2001
PROXY STATEMENT
SOLICITATION OF PROXY, REVOCABILITY AND VOTING
General
The enclosed Proxy is solicited on behalf of the Board of Directors
(the "Board" or "Board of Directors") of Supertex, Inc., a California
corporation (the "Company"), for use at the 2001 Annual Meeting of Shareholders
to be held on August 17, 2001 at 10:00 a.m., local time (the Annual Meeting),
or at any adjournment thereof, for the purposes set forth herein and in the
accompanying Notice of Annual Meeting of Shareholders.
Only shareholders of record at the close of business on June 15, 2001
(the "Record Date") are entitled to notice of and to vote at the meeting. At
the Record Date 12,403,749 shares of the Company's Common Stock, no par value,
were issued and outstanding.
The Annual Meeting will be held at the principal offices of the Company
located at 1235 Bordeaux Drive, Sunnyvale, California 94089. The Company's
telephone number at that address is (408) 744-0100.
The Company intends to mail this proxy statement and an accompanying
proxy card on or about July 16, 2001 to all shareholders entitled to vote at
the Annual Meeting.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use (i) by delivering to the Secretary
of the Company at the Company's principal executive offices, 1235 Bordeaux
Drive, Sunnyvale, California 94089, a written notice of revocation or a duly
executed proxy bearing a later date or (ii) by attending the meeting and
voting in person. Attendance at the meeting will not, by itself, revoke a
proxy.
Voting and Solicitation
Every shareholder voting at the election of directors may cumulate
such shareholder's votes and give one candidate a number of votes equal to
the number of directors to be elected multiplied by the number of votes to
which the shareholder's shares are entitled, or distribute the shareholder's
votes on the same principle among as many candidates as the shareholder thinks
fit, provided that votes cannot be cast for a greater number of candidates
than the number of directors to be elected. However, no shareholder shall
be entitled to cumulate votes unless the candidate's name has been placed in
nomination prior to the voting and the shareholder, or any other shareholder,
has given notice at the meeting prior to the voting of the intention to
cumulate the shareholder's votes. On all other matters, each share has one
vote. The director candidates who receive the most votes will be elected to
fill the seats on the Board. Approval of all other proposals require the
favorable vote of a majority of the votes "represented and voting" at the
Annual Meeting (the Votes Cast). An automated system administered by the
Company's transfer agent, Registrar and
Transfer Company, tabulates the votes.
Quorum; Abstentions; Broker Non-Votes
The required quorum for the transaction of business at the Annual
Meeting is a majority of the shares of Common Stock issued and outstanding
on the Record Date. Shares that are voted "FOR", "AGAINST" or "WITHHELD FROM"
a matter are treated as being present at the meeting for purposes of
establishing a quorum and are also treated as shares "represented and voting"
at the Annual Meeting (the "Votes Cast") with respect to such matter.
While there is no definitive statutory or case law authority in
California as to the proper treatment of abstentions, the Company believes
that, in the absence of contrary controlling authority, abstentions should
be counted for purposes of determining the presence or absence of a quorum
for the transaction of business, but should not be counted as Votes Cast with
respect to a proposal, since the shareholder has expressly declined to vote
on such proposal. Similarly, broker non-votes will be counted for purposes
of determining the presence or absence of a quorum for the transaction of
business, but will not be counted for purposes of determining the number of
Votes Cast with respect to the proposal on which the broker has expressly
not voted. A broker "non-vote" occurs when a nominee holding shares for a
beneficial owner does not vote on a particular proposal because the nominee
does not have discretionary power with respect to that item and has received
no instruction from the beneficial owner.
Accordingly, in general abstentions and broker "non-votes" will not
affect the outcome of the voting on a proposal that requires a majority of
the Votes Cast (such as the approval of the adoption of the 2001 Stock Option
Plan). However, the number of shares voting in favor of any matter must
constitute at least a majority of the required quorum for the Annual Meeting.
The Company will bear the entire cost of preparing, assembling, printing, and
mailing this Proxy Statement. In addition, the Company may reimburse
brokerage firms and other persons representing beneficial owners of shares
for their expenses in forwarding solicitation materials to such beneficial
owners. Proxies may also be solicited personally or by telephone or by fax
by certain of the Company's directors, officers, and regular employees. Such
persons will not receive additional compensation for such solicitation.
Deadline for Receipt of Shareholder Proposals
Proposals of security holders of the Company which are intended to
be presented by such shareholders at the Company's Annual Meeting for fiscal
2002 must be received by the Company no later than February 22, 2002 in order
that they may be included in the proxy statement and form of proxy relating
to that meeting. The proposal must be mailed to our principal offices, 1235
Bordeaux Drive, Sunnyvale, California 94089. Such proposals may be in next
year's proxy statement if they comply with certain rules and regulations
promulgated by the Securities and Exchange Commission.
PROPOSAL 1: ELECTION OF DIRECTORS
Nominees
A board of six directors is to be elected at the Annual Meeting.
Mr. Frank Pao, a director since 1987, has declined re-election to the Board
for personal reasons; therefore, there will be one new member on the board.
The Board has nominated Dr. Milton Feng for election as the new member of the
Board for the ensuing year in addition to nominating the remaining five
current members. Unless otherwise instructed, the proxy holders will vote
the proxies received by them for the Company's six nominees named below.
The six nominees receiving the highest number of affirmative votes of the
shares entitled to be voted will be elected as directors of the Company. In
the event that any nominee of the Company declines or is unable to serve as a
director at the time of the Annual Meeting, the proxies will be voted for
any nominee who shall be designated by the present Board of Directors to
fill the vacancy. It is not expected that any nominee will decline or will
be unable to serve as a director. In the event that additional persons are
nominated for election as directors and/or votes are cumulated, the proxy
holders intend to vote all proxies received by them in such a manner as will
ensure the election of as many of the nominees listed below as possible, and,
in such event, the specific nominees to be voted for will be determined by
the proxy holders. The term of office of each person elected as a director
will continue until the next Annual Meeting of Shareholders or until such
person's successor has been elected and qualified. The names of the
nominees and certain information about them are set forth in the following
page:
Name of Nominee Age Principal Occupation Director Since
Henry C. Pao (2),(4),(5) 63 President/Principal 1976
Executive and Financial
Officer of the Company
Benedict C.K. Choy (2) 55 Senior Vice President 1986
-Technology Development
of the Company
Richard E. Siegel 55 Executive Vice President 1988
of the Company
W. Mark Loveless 49 Independent Consultant 2000
(1),(2),(3),(4),(5)
Elliott Schlam (1),(3) 60 President, Elliott Schlam 2000
Associates
Milton Feng 51 Chair Professor of Electrical N/A
and Computer Engineering
University of Illinois,
Champaign-Urbana
- ---------------------------------------
<FN>
(1) Member of the Board's Audit Committee.
(2) Member of the Board's Compensation Committee.
(3) Member of the Board's Executive Compensation Committee.
(4) Member of the Board's Employee Stock Purchase Plan Committee.
(5) Member of the Board's Deferred Compensation Plan Committee.
</FN>
There is no family relationship between any director, nominee or
executive officer of the Company, except that Henry C. Pao and retiring
director Frank C. Pao are brothers and are the sons of former director Yunni
Pao.
Henry C. Pao is a founder of Supertex and has served as President,
Principal Financial and Executive Officer, and as a Director since the
Company's formation in fiscal 1976. Previously, he worked at Fairchild
Semiconductor, Raytheon, Sperry Rand, and IBM. He received B.S., M.S., and
Ph.D. degrees in Electrical Engineering from the University of Illinois at
Champaign-Urbana.
Benedict C. K. Choy, a founder of the Company, joined in 1976 as Vice
President, Device Technology and Process Development, and has served as Senior
Vice President since 1988. He has been a Director since 1986. Previously,
he worked at Fairchild Semiconductor, National Semiconductor, and Raytheon.
He received a B.S. degree in Electrical Engineering from the University of
California, Berkeley.
Richard E. Siegel joined the Company in 1981 as National Sales Manager,
was appointed Vice President of Sales and Marketing in April 1982, Senior Vice
President in February 1988, and has served as Executive Vice President since
November 1988. He has been a Director since 1988. Previously, he worked at
Signetics Corporation, Fairchild Semiconductor, Ford Instrument, and Grumman
Aircraft Corporation. Mr. Siegel is also a member of the Board of Directors
for All American Semiconductor (NASD: SEMI). All American Semiconductor,
headquartered in Florida, is a national distributor of electronic components
manufactured by others and is a major distributor for Supertex. Mr. Siegel
received a B.S. degree in Mechanical Engineering from the City College of
New York, augmented with Electrical Engineering courses from Brooklyn
Polytechnic Institute, New York.
W. Mark Loveless is an independent financial consultant since March
2001. From November 1999 to February 2001, Mr. Loveless was the Chief
Financial Officer of NPoint Inc., an embedded software company located in
Los Gatos, CA. Prior to joining NPoint, Inc. in November 1999, Mr. Loveless
had been with PricewaterhouseCoopers LLP, since 1978. Mr. Loveless was a
Business Assurance Partner from 1990 to 1999 with PricewaterhouseCoopers LLP,
in San Jose, CA in their Technology Sector where he spent considerable time
working with mergers and acquisitions, public offerings, and accounting
systems and controls. Mr. Loveless is a Certified Public Accountant and
holds a B.S. degree in Business Administration and an MBA degree in Finance.
Elliott Schlam is an internationally recognized authority on the flat
panel display industry. His consulting practice includes technology
development, management and market strategies, R&D and equity fund raising
and securities analysis. He has consulted for numerous successful Fortune
100 and start-up companies and was previously VP of Sales and Marketing for
a flat panel display company as well as director of display R&D, manufacturing
methods and technology insertion for the U.S. Army. Dr. Schlam is a Fellow
of the Society for Information Display.
Milton Feng is a leading authority in III-V compound semiconductor and
opto-electronic devices. He is currently the Dr. Nick Holonyak Jr. Chair
Professor of Electrical and Computer Engineering and of the Center for
Compound Semiconductor Microelectronics at the University of Illinois,
Champaign-Urbana. He is a Fellow of IEEE and received the prestigious IEEE
David Sarnoff Award in 1997. He was also awarded the Dr. Pan Wen Yuan Award
in 2000 for his outstanding contribution in Noise in Microelectronics. He
has published 120 journal papers, 105 conference papers, and holder of 6
patents in microelectronics and opto-electronics area. He received a Ph.D.
in Electrical Engineering from the University of Illinois. Dr. Feng worked
as a Section Head at the Torrance Research Center, Hughes Aircraft, and at
the Ford Microelectronics in Colorado Springs before returning to the
University of Illinois as a faculty member.
Board Recommendation on Proposal 1; Vote Required
The six (6) nominees for director receiving the highest number of
affirmative votes of the shares entitled to be voted for them shall be
elected as directors. Votes withheld from any director are counted for
purposes of determining the presence or absence of a quorum, but have no
other legal effect under California law.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
ELECTION OF THE ABOVE-NAMED PERSONS TO THE BOARD OF DIRECTORS OF THE COMPANY.
Board Meetings and Committees
The Board of Directors of the Company held a total of two meetings
during the fiscal year ended March 31, 2001. All directors attended each
meeting during such fiscal year. The Board of Directors has an Audit
Committee, a Compensation Committee, an Executive Stock Option Committee, an
Employee Stock Purchase Plan (the "ESPP") Committee, and a Deferred
Compensation Plan Committee. The Board has no special nominating committee
or any committee performing similar functions of such committee. Any
member of the Board can make nominations.
Audit Committee
The Audit Committee consists of three non-employee directors, Mark
Loveless, Elliott Schlam, and Frank Pao. The principal functions of the
Audit Committee are (1) to monitor corporate financial reporting and the
internal and external audits of the Corporation (2) to review and evaluate
the Company's internal control structure, and (3) to nominate independent
public accountants and approve the services performed by such auditors. The
Audit Committee held four meetings in fiscal year 2001 and each such meeting
was attended by all Audit Committee members.
Employee Stock Purchase Plan Committee
The Employee Stock Purchase Plan committee, consists of Henry C. Pao
and Mark Loveless, is responsible for the general administration and
interpretation of the ESPP and for carrying out its provisions.
Deferred Compensation Plan Committee
The Deferred Compensation Plan Committee, consists of Henry C. Pao and
Mark Loveless, is responsible for interpretation of the Supplemental Employee
Retirement Plan (the "SERP") and making all other policy decisions concerning
the SERP's administration.
Executive Compensation Committee
The Executive Compensation Committee consists of non-employee directors
Mark Loveless, Elliott Schlam, and Frank Pao, and is responsible for making
recommendations to the Board of Directors with respect to all cash-based and
all stock compensation of executive officers.
Compensation Committee
The Compensation Committee consists of Mark Loveless, Henry C. Pao,
and Benedict Choy. The Compensation Committee is responsible for making
recommendations to the Board of Directors with respect to all cash-based
compensation and all stock compensation of employees and consultants, other
than executive officers.
Compensation Committee Interlocks and Insider Participation
Benedict Choy and Henry C. Pao serve on the Compensation Committees
and Henry C. Pao serves on the Deferred Compensation Plan and Employee Stock
Purchase Plan Committees, and both are also officers of the Company.
Compensation of Directors
Cash Compensation. The Company currently pays cash compensation to
its outside Directors for serving on the Board or committees of the Board in
an amount of $1,000 for each Board meeting attended. The Company also
reimburses all outside Directors for travel and other necessary out-of-pocket
expenses incurred in the performance of their services as directors.
Stock Option Grant. The Company granted stock options to its
non-employee directors during fiscal 2001. Each of the non-employee directors,
W. Mark Loveless and Elliot Schlam, received a total of 12,000 shares during
fiscal 2001. The new nominee, Mr. Milton Feng, will be granted on September 1,
2001 stock options to purchase 10,000 shares of the Company's Common Stock
vested over a five-year period, if he is elected to the Board of Directors.
Certain Relationship and Related Transactions
The Company leases a Sunnyvale facility under a month-to-month
operating lease of $38,000 per month from Fortuna Realty Co., a corporation
owned by former Supertex Director, Yunni Pao. The total rental expenses paid
to the former company director were $408,000, $388,000, and $375,000 in
fiscal 2001, 2000, and 1999, respectively. The Company believes that the
lease with Fortuna Realty Co. is at prevailing market rates.
Mr. Richard Siegel, the Executive Vice President of the Company,
is a member of the Board of Directors for All American Semiconductor.
All American Semiconductor is a national distributor of electronic
components manufactured by others and is a major distributor for Supertex.
Sales to this distributor for fiscal years 2001, 2000 and 1999 were
$3,969,000, $4,114,000 and $3,038,000, respectively. Supertex has no
long-term production agreement with All American Semiconductor.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth the beneficial ownership of Common
Stock of the Company as of June 15, 2001 (i) by each person who is known by
the Company to own beneficially more than 5% of the Company's Common Stock,
(ii) by each of the Company's directors, (iii) by each of the Company's five
most highly compensated executive officers, and (iv) by all directors and
executive officers as a group:
Directors, Officers and 5% Stockholders
Shares Beneficially Owned (1)
Number of Shares Percentage of Total
Account Management Corp. 1,265,800 (2) 10.21%
2 Newberry Street
Boston, MA 02116
Wasatch Advisors, Inc. 1,267,650 (3) 10.22%
150 Social Hall Avenue
Salt Lake City, UT 84111
Sanford C. Bernstein & Co., Inc. 759,850 (4) 6.13%
767 Fifth Avenue
New York, NY10153
Yunni Pao 1,615,552 (5) 13.02%
2 Oxford Road
Kowloon, HongKong
Henry C. Pao 923,919 (6) 7.32%
Supertex, Inc.
1235 Bordeaux Dr.
Sunnyvale, California 94089
Frank C. Pao 804,771 6.49%
Business Systems Technology Corp.
330 Manchester Rd.
Poughkeepsie, New York
Benedict C.K. Choy 251,660 (7) 1.99%
Richard Siegel 40,239 (8) (16)
Dennis Kramer 29,000 (9) (16)
William Ingram 19,703 (10) (16)
Franklin Gonzalez 35,972 (11) (16)
Michael Lee 19,852 (12) (16)
Dilip Kapur 7,000 (13) (16)
William Peterson 6,000 (14) (16)
All Directors and Executive
Officers as a group (12 persons) 2,139,216 (15) 16.94%
- ---------------------
<FN>
(1) Except as indicated in the footnotes to this table, and pursuant to
applicable community property laws, the persons named in the table have sole
voting and investment power with respect to all shares of common stock shown
as beneficially owned by them.
(2) Based on a filing dated May 14, 2001, pursuant to Section 13(f) of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), the
Company believes that Account Management Corp., a registered investment
advisor has beneficial ownership of 1,265,800 shares of the Company's Common
Stock as of March 31, 2001.
(3) Based on a filing dated June 11, 2001, pursuant to Section 13(g) of the
Exchange Act, the Company believes that Wasatch Advisors, Inc., a registered
investment advisor, has beneficial ownership of 1,267,650 shares of the
Company's Common Stock as of May 31, 2001.
(4) Based on a filing dated February 15, 2000, pursuant to Section 13(g) of
the Exchange Act, the Company believes that Sanford C Bernstein & Co., a
registered investment advisor, has beneficial ownership of 759,850 shares of
the Company's common stock as of December 31, 1999. Based on a filing by
Sanford C. Bernstein Co., dated November 8, 2000, pursuant to Section 13(g)
of the Exchange Act, Alliance Capital Management L.P. ("Alliance") acquired
beneficial ownership of the shares of Supertex Inc. that were beneficially
owned by Sanford C. Bernstein. The Company has not received any filings
about the ownership of these shares from Alliance nor AXA Financial, the
parent company of Alliance.
(5) Based on a filing dated February 14, 1997, pursuant to Section 13(d) of
the Exchange Act, the Company believes that Push, Inc., a British Virgin
Islands corporation owned 100% by Yunni Pao, has beneficial ownership of
1,615,552 shares of the Company's Common Stock as of December 31, 2000.
(6) Includes options held by Mr. Henry Pao to purchase 61,000 shares of
Common Stock exercisable within 60 days of June 15, 2001.
(7) Includes options held by Mr. Choy to purchase 42,500 shares of Common
Stock exercisable within 60 days of June 15, 2001.
(8) Includes options held by Mr. Siegel to purchase 29,700 shares of Common
Stock exercisable within 60 days of June 15, 2001.
(9) Includes options held by Mr. Kramer to purchase 22,000 shares of Common
Stock exercisable within 60 days of June 15, 2001.
(10) Includes options held by Mr. Ingram to purchase 19,400 shares of Common
Stock exercisable within 60 days of June 15, 2001.
(11) Includes options held by Mr. Gonzalez to purchase 23,600 shares of
Common Stock exercisable within 60 days of June 15, 2001.
(12) Includes options held by Mr. Lee to purchase 10,500 shares of Common
Stock exercisable within 60 days of June 15, 2001.
(13) Includes options held by Mr. Kapur to purchase 7,000 shares of Common
Stock exercisable within 60 days of June 15, 2001.
(14) Includes options held by Mr. Peterson to purchase 6,000 shares of Common
Stock exercisable within 60 days of June 15, 2001.
(15) Includes options held by the Company's executive officers and directors
(12 persons) to purchase an aggregate 221,700 shares exercisable within 60 days
of June 15, 2001.
(16) Indicates less than 1% in beneficial ownership.
</FN>
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of the Company's Common Stock
to file with the Securities and Exchange Commission ("SEC") and the National
Association of Securities Dealers ("NASD") initial reports of ownership on
Form 3 and changes in ownership on Form 4 or 5. Such officers, directors
and 10% stockholders are also required by SEC rules to furnish the Company
with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by
it, or written representations from certain reporting persons that no Forms 5
were required for such persons, the Company believes that, during the fiscal
year ended March 31, 2001, all Section 16(a) filing requirements applicable
to its officers, directors, and 10% shareholders were satisfied.
Executive Officers of the Registrant
The names, ages and positions of the Company's executive officers as
of June 15, 2001 are as follows:
Name Position with the Company Age Officer Since
Henry C. Pao President, Principal Executive 63 1976
and Financial Officer
Richard E. Siegel Executive Vice President 55 1982
Benedict C. K. Choy Senior Vice President, 55 1976
Technology Development,
and Secretary
Dennis E. Kramer Vice President, Materials 59 1996
William P. Ingram Vice President, Wafer Fab 53 1999
Operations
Franklin Gonzalez Vice President, Process 50 1999
Technology
Michael Lee Vice President, I.C. Design 46 1999
Dilip Kapur Vice President, Standard Products 52 2000
William Petersen Vice President, Worldwide Sales 48 2001
Officers are appointed by the Board of Directors and serve at the
discretion of the Board. There is no family relationship between any
directors or executive officers of the Company except as stated below.
Henry C. Pao is a founder of Supertex and has served as President,
Principal Financial and Executive Officer, and as a Director since the
Company's formation in fiscal 1976. Previously, he worked at Fairchild
Semiconductor, Raytheon, Sperry Rand and IBM. He received B.S., M.S., and
Ph.D. degrees in Electrical Engineering from University of Illinois at
Champaign-Urbana. Dr. Pao is the brother of Frank Pao, also a director of
the Company.
Richard E. Siegel joined the Company in 1981 as National Sales Manager,
was appointed Vice President of Sales and Marketing in April 1982, Senior
Vice President in February 1988, and has served as Executive Vice President
since November 1988. He has been a Director since 1988. Previously, he
worked at Signetics Corporation, Fairchild Semiconductor, Ford Instrument
and Grumman Aircraft Corporation. Mr. Siegel is also a member of the Board
of Director for All American Semiconductor (NASD: SEMI). All American
Semiconductor, headquartered in Florida, is a national distributor of
electronic components manufactured by others and is a major distributor for
Supertex. Mr. Siegel received a B.S. degree in Mechanical Engineering from
City College of New York, augmented with Electrical Engineering courses from
Brooklyn Polytechnic Institute, New York.
Benedict C. K. Choy, a founder of the Company, joined Supertex in
fiscal 1976 as Vice President, Device Technology and Process Development,
and has served as Senior Vice President since February 1988. He has been a
Director since 1986. Previously, he worked at Fairchild Semiconductor,
National Semiconductor, and Raytheon. He received a B.S. degree in
Electrical Engineering from the University of California, Berkeley.
Dennis E. Kramer joined Supertex in September 1981 as Wafer Fab II
Production Manager. Over his tenure, he has managed many facets of the
wafer fabrication process as well as all the back-end manufacturing
operations. He was promoted to Vice President of Materials in 1996.
Previously, he worked at Siemens and Signetics Corporation. He received
a B.S. degree in Chemistry from University of California, Los Angeles and
an MBA from Santa Clara University.
William Ingram joined Supertex five years ago as its Director of Wafer
Fab Operations. Prior to joining Supertex, he was Vice President of
Technology Development at Crosspoint Solutions, before which he held
management positions at Fairchild and National Semiconductor. He began
his career at National after receiving his B.S. degree in Electrical
Engineering with honors from the North Carolina State University.
Franklin Gonzalez joined Supertex in November 1990 as a Process
Development Manager. In 1994, he was promoted to Director of Process
Technology. Prior to joining Supertex, he held various R& D management
positions spanning over seventeen years with such companies as ECI
Semiconductor, Telmos and Harris Semiconductor where he began his career.
He received a Ph.D. in Electrical Engineering from the University of Florida
and a M.S. degree in Electrical Engineering from Stanford University.
Michael Lee re-joined Supertex in October 1993 as Director of I.C.
Design. Before that, he had a combined total of fifteen years of industry
experience in I.C. Design. Mr. Lee began his career at Supertex after
receiving his M.S. degree in Electrical Engineering from the University of
California Berkeley in 1978.
Dilip Kapur joined Supertex in March 1984 and has managed Marketing,
Applications, Marketing Communications and Product Engineering Departments.
He has previously held Application Engineering and Marketing positions at
Computer Power Inc. and Advani Oerlikon Ltd. He received a B.S. degree in
Electrical Engineering from MACT, Bhopal and a Diploma in International Trade
from Indian Institute of Foreign Trade, New Delhi.
William Petersen first joined Supertex in 1984 as Sales Manager for
the Central Region of the United States. From 1990 through 1994, he was the
Company's National Sales Manager, overseeing sales operations throughout the
United States. Mr. Petersen re-joined Supertex in September 1999 as Director
of Sales. He was promoted to Vice President of Worldwide Sales in February
2001. Prior to working at Supertex, he worked at Siemens as Central Area
Manager from 1980-1984. Mr. Petersen attended the University of Iowa.
Compensation of Executive Officers
The following table shows compensation paid to the Company's Chief
Executive Officer and each of the four other most highly compensated
executive officers for the three fiscal years ended March 31, 2001.
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation(1)
Deferred Deferred Securities Underlying All other
Name and Principal Position Year Salary(2) Salary Bonus(3) Bonus Options (No.of Shares) Compensation(4)
Henry C. Pao 2001 $ 175,810 $ 210,504 $ 1,276 $ 85,724 0 $ 1,295
President and CEO 2000 139,576 44,326 435 29,565 25,000 1,355
1999 139,576 44,326 1,508 102,492 56,000 1,385
Richard Siegel 2001 231,151 41,796 37,700 37,700 0 1,295
Executive Vice President 2000 231,436 39,677 13,000 13,000 22,000 1,355
1999 206,419 35,262 45,500 45,500 54,000 1,355
Benedict C. K. Choy 2001 190,703 20,456 57,420 6,380 0 1,295
Senior Vice President, 2000 194,345 12,897 20,900 1,100 20,000 1,355
Technology Development 1999 164,020 15,277 39,000 39,000 52,000 1,355
Michael Lee (5) 2001 184,239 0 24,000 0 5,000 1,295
Vice President, 2000 162,976 0 8,000 0 20,000 1,355
I.C. Design N/A N/A N/A N/A N/A N/A N/A
William Ingram (5) 2001 148,094 6,773 32,000 0 5,000 1,295
Vice President 2000 144,685 0 8,000 0 0 1,295
Wafer Fab Operations N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------
<FN>
(1) The Company has not issued stock appreciation rights or restricted stock
awards. The Company has no "long-term incentive plan," "defined benefit plan,
" or "pension plan" as such terms are defined in the applicable rules.
(2) Compensation deferred at the election of executive is included in the
category and in the year earned.
(3) The amounts shown in this column reflect payments under the Company's
semi-annual profit-sharing plan under which all eligible employees participate.
Bonus deferred at the election of the executive is included in the category
and in the year earned.
(4) The amounts disclosed in this column include:
(a) Company contributions of $5,200, $8,320, and $9,360 in fiscal 1999, 2000,
and 2001 respectively under the Supertex, Inc. Savings and Retirement Plan,
a defined contribution 401(k) plan on behalf of each named executive officers.
(b) Payment by the Company of premiums amounting to $1,579, $2,512, and $2,453
for fiscal 1999, 2000, and 2001 respectively, for term life insurance on
behalf of each named executive officer. All full-time employees of the
Company are covered by such term life insurance benefits.
(5) Mr. Lee and Mr. Ingram became officers of the Company in fiscal 1999.
</FN>
The following table shows, as to the named executive officers,
information concerning options granted during fiscal 2001 and the potential
realizable value of those options, assuming 5% and 10% appreciation at the
end of the option term.
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable
Value at Assumed Annual
Percent of Total Rates of Stock Price
Options Granted to Excercise Appreciation for Option
Employees in Fiscal Price Expiration Term
Name Options Granted (1) Year (2) ($/Share) Date 5% (3) 10% (3)
Michael Lee 5,000 (4) 1.02% $19.56 12/01/07 $39,820 $92,796
William Ingram 5,000 (4) 1.02% $19.56 12/01/07 $39,820 $92,796
- -----------------------------------
<FN>
(1) Options granted under the Company's 1991 Stock Option Plan typically
have a 7-year term, vest over a 5-year period of employment and have an
exercise price equal to the market value of the Company's Common Stock on
the date of grant.
(2) In fiscal 2001, the Company granted options representing 491,260 shares
to employees.
(3) Potential realizable value is based on Black - Scholes Multiple Option
model. These values are calculated based on requirements promulgated by the
Securities and Exchange Commission and do not reflect the Company's estimate
of future stock price appreciation.
(4) 7-year term, vest 1 year after grant date over a 5-year period.
</FN>
In March 1998, Franklin Gonzalez, the Company's Vice President,
Process Technology, and William Ingram, the Company's Vice President, Wafer
Fab Operations, were given the opportunity to exchange their older higher
priced incentive stock options for new incentive stock options at the then
current market price of $10.625 per share in return for changing the vesting
start date of the option to one year after the original vesting date for the
surrendered option. The Board believed that it was in the best interest of
the Company and the shareholders of the Company to highly motivate the two
officers at the time and to make a special exchange offer that was not
available to the rest of the officers of the Company.
The following table provides the specified information concerning
repricing of options to purchase the Company's Common stock held by any
executive officer of the Company in the last 10 years.
OPTION REPRICING WITHIN LAST 10 YEARS
Length of
Original
Option Term
Number of Securities Market Price Excercise Price New Remaining at
Underlying Options of Stock at at time of Excercise Date of Repricing
Name Date Repriced Time of Repricing Repricing Price (months)
Franklin Gonzalez 03/02/98 6,000(1) $10.625 $16.750 $10.625 78
William Ingram 03/02/98 5,000(2) $10.625 $12.000 $10.625 72
- ------------------------------------
<FN>
(1) 8-year term, vest 3 years after original grant date over a 5-year period.
(2) 7-year term, vest 2 years after original grant date over a 5-year period.
</FN>
The following table summarizes the information concerning stock
option exercises during the last fiscal year for each named executive officer.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of Securities Value of
Underlying Unexercised Unexercised In-the-Money
Shares Acquired Value Options at Fiscal Year-End Options at Fiscal Year-End(*)
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Henry C. Pao 19,800 $ 549,450 57,000 82,000 $ 145,363 $ 103,750
Richard Siegel 15,000 412,500 26,700 77,600 22,350 100,000
Benedict Choy 12,000 452,250 40,500 75,000 72,500 98,125
Michael Lee 12,000 382,940 10,500 38,500 6,563 25,250
William Ingram 2,000 70,750 19,400 21,300 52,513 29,488
- ----------------------------------------
<FN>
(*)Closing market price of the Company's Common Stock on Friday, March 30, 2001
was $12 5/8.
</FN>
Report of the Executive Compensation Committee
of the Board of Directors
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933 as amended, or
the Securities Exchange Act of 1934, as amended, that might incorporate
future filings, including this Proxy Statement, in whole or in part, the
following report shall not be deemed to be incorporated by reference into
any such filings.
The Executive Compensation Committee of the Board of Directors is
generally responsible for reviewing compensation and benefits, including
stock options, of executive officers of the Company. All the members of
the Board of Directors review the stock compensation of outside directors.
The Company applies a consistent philosophy of compensation for all
employees, including its executive officers. This philosophy is based on the
premise that the achievements of the Company result from the coordinated
efforts of all individuals working toward common objectives. The Company
strives to achieve those objectives through teamwork that is focused on
meeting the defined expectations of customers and shareholders.
Compensation Philosophy. The goals of the committee are to align
executive compensation with business objectives and performance, and to
enable the Company to attract, retain and reward executive officers who
contribute to the long-term success of the Company. The Company's
compensation program for the chief executive officer and other executive
officers is based on the same four principles applicable to compensation
decisions for all employees of the Company:
* The Company pays competitively. The Company is committed to
providing a compensation program that helps attract and retain the
best people in the industry. To ensure that pay is competitive, the
Company reviews the compensation practices of other companies of
similar size and sales volume within the semiconductor industry,
most of which are included in the Nasdaq Electronic Component Index.
* The Company pays for relative sustained performance. Officers are
rewarded based upon corporate performance, product line performance
and individual performance. Corporate performance and product line
performance are evaluated by reviewing the extent to which strategic
and business plan goals are met, including such factors as operating
profit, performance relative to competitors and timely new product
introductions. Individual performance is evaluated by measuring
organization progress against set objectives.
* The Company strives for fairness in the administration of compensation.
The Company strives to achieve a balance with respect to compensation
paid to the executives within the Company and in comparable companies.
The Company also believes that the contributions of each member of the
executive staff are vital to the success of the Company. As such, the
Executive Compensation Committee's current policy is that the CEO's
base compensation does not have any bearing on the base compensation
of the other officers. Similarly, any employee may receive a base
compensation higher than his/her supervisor due to the particular
higher technical skills required in the subordinate position.
* The Company believes that employees should understand the performance
evaluation and compensation administration process. At the beginning
of each focal review period in July, annual objectives for the Company
are set for each officer. The CEO gives ongoing feedback on
performance to each officer. Within 90 days after the end of the
fiscal year, the committees evaluate the accomplishments of the key
objectives, which affects decisions on merit increases and stock
option grants.
Compensation Components. The Company's compensation program, which
consists of cash and equity based compensation, allows the Company to attract
and retain highly skilled officers, provide useful products and services to
customers, enhance shareholder value, motivate technological innovation and
adequately reward its executive officers and other employees. These
components are:
Cash-Based Compensation:
Salary. The Executive Compensation Committee sets base salary
for the chief executive officer and all other officers by reviewing
the compensation levels for competitive positions in the market.
Based on comparative data, the chief executive and all other officers
were compensated within the low-to-middle salary range levels during
fiscal 2001. The chief executive and all other executive officers of
the Company largely met their individual goals and the Company's
overall performance set for them in fiscal 2001.
Profit-Sharing Bonus. The Company has a semiannual profit-
sharing plan under which it distributes to all employees, including
the chief executive officer and all other officers, ten percent of
its operating profits before taxes and other adjustments. The Company
believes that all employees share the responsibility of achieving
profits. Accordingly, it awards a bonus to all employees based on
a formula which includes employment grade level, seniority with the
Company, and employee performance including attendance. As of
June 15, 2001, the Company has made twenty-five semiannual
profit-sharing distributions.
Equity-Based Compensation:
Stock Option Grants. Stock options provide additional
incentives to the chief executive officer and all other officers,
directors, and certain management and technical employees to work
to maximize stockholder value. The options vest over a defined
period to encourage such employees to continue in the employ of the
Company. In line with its compensation philosophy, the Company
grants stock options commensurate with the employee's potential
contribution to the Company, measured by his qualifications and
previous work performance. Stock options were granted to various
officers, management or technical employees in fiscal year 2001 for
performance and promotions of existing employees, and as a part of
the employment compensation package for new employees.
-Respectfully submitted by the members of the Executive Compensation
Committee
W. Mark Loveless
Frank Pao
Elliot Schlam
Report of the Audit Committee
of the Board of Directors
The following is a report of the audit committee with respect to our
audited financial statements for the fiscal year ended March 31, 2001, which
include our consolidated balance sheets as of March 31, 2001 and 2000, and
the related consolidated statements of operations, stockholders' equity and
cash flows for each of the three years in the period ended March 31, 2001,
and the notes thereto. The information contained in this report shall not be
deemed to be "Soliciting Material" or to be "filed" with the Securities and
Exchange Commission, nor shall such information be incorporated by reference
into any future filing under the Securities Act of 1933, as amended, or the
Exchange Act, except to the extent the Company specifically incorporates it
by reference in such filing.
The board of directors has adopted a written audit committee charter,
a copy of which is attached to this proxy statement as Appendix A. In general
the charter sets forth:
* the scope of the audit committee's responsibilities and the means by which
it carries out these responsibilities
* the outside auditor's accountability to the board of directors and the
audit committee; and
* the audit committee's responsibility to ensure the independence of the
outside auditor
Review with Management. The audit committee has reviewed and
discussed our audited financial statements with management.
Review and Discussions with Independent Accountants. The audit
committee has discussed with PricewaterhouseCoopers LLP, our independent
accountants, the matters required to be discussed by SAS 61 (Codification
of Statements on Accounting Standards) which includes, among other items,
matters related to the conduct of the audit of our financial statements.
The audit committee has also received written disclosures and the
letter from PricewaterhouseCoopers LLP required by Independence Standards
Board Standard No. 1 (which relates to the accountant's independence from
us and our related entities) and has discussed with PricewaterhouseCoopers
LLP their independence from Supertex. In addition, the audit committee has
also considered whether the provision of those services set forth in the
table below is compatible with PricewaterhouseCoopers LLP maintaining its
independence from Supertex.
Conclusion. Based on the review and discussions referred to above,
the committee recommended to our board of directors that our audited
financial statements be included in our Annual Report on Form 10-K for the
fiscal year ended March 31, 2001.
- Respectfully submitted by the members of the Audit Committee
W. Mark Loveless
Elliot Schlam, Member
Frank Pao, Member
PROPOSAL 2: FOR THE APPROVAL OF THE ADOPTION OF THE 2001 STOCK OPTION PLAN
AND THE RESERVATION OF 2,000,000 SHARES OF COMMON STOCK
At the meeting, the shareholders will be requested to approve the 2001
Stock Option Plan (the "Plan") and the reservation of 2,000,000 shares of
common stock. The Company's 1991 Stock Option Plan expires in 2001, and the
Board of Directors ("Board") recommends approval of the new Plan to allow the
Company to continue to attract and retain the best available individuals for
positions of importance to the Company and to provide an incentive to
directors, officers, employees and consultants of the Company and its
Subsidiaries, to use their best efforts on the Company's behalf.
Description of the Plan
General. The purposes of this Plan are to attract and retain the
best available individuals for positions of importance to the Company, to
provide additional incentive to such individuals, and to be competitive in
our industry. Options granted under the Plan may be either "Incentive Stock
Options," as defined in Section 422 of the Internal Revenue Code of 1986
("Code"), or Non-Qualified Stock Options.
Administration. The Plan shall be administered by a committee
(the "Committee") designated by the Board. The Committee shall consist of
at least two directors and may consist of the entire Board.
Eligibility. Incentive Stock Options maybe granted to employees,
officers, directors and consultants of the Company or its Subsidiaries. No
Incentive Stock Options shall be granted to any person owning more than 10%
of the total combined voting power of all classes of capital stock of the
Company; or to any director who is not an officer. Non-Qualified Stock
Options may be granted under the Plan to employees, officers, directors and
consultants of the Company or its Subsidiaries.
Shares Subject to Plan. The aggregate number of shares of common
stock issuable under the Plan shall be 2,000,000 shares and may be set aside
out of the authorized but unissued, or reacquired shares.
Terms and Conditions of Options. Each Optionee shall enter into an
Option Agreement with the Company and is subject to the following terms and
conditions:
Exercise Price. The per share exercise price of an Incentive
Stock Option shall be no less than the Fair Market Value of the Stock,
without regard to any restriction, on the date the Incentive Stock
Option is granted. The per share exercise price of a Non-Qualified
Stock Option may be less than the Fair Market Value of the Stock on
the date of grant, however, in the case of a Non-Qualified Stock
Option intended to qualify as "performance-based compensation" within
the meaning of the 162(m) of the Code, the per share exercise price
shall be no less than 100% of the fair market value on the date such
Non-Qualified Stock Option is granted. The fair market value for a
share of the Company common stock underlying each option award is the
closing price per share on the Nasdaq Stock Market on the last market
trading day prior to the day of grant.
Payment for Stock. The exercise price of an Option shall be
paid in full at the time of the exercise by cash, check, broker
assisted same day sales, or by delivery of the certificate of shares
of the Company's common stocks for exchange.
Limitations. The plan provides that an Option shall not be
treated as an Incentive Stock Option to the extent the aggregate fair
market value of the common stocks for which Incentive Stock Options
are exercisable for the first time by a Grantee during the calendar
year exceeds $100,000. The aggregate fair market value is determined
as of the time the Incentive Stock Option is granted
Termination of Services. Upon the termination of an Optionee's
services for the Company or its Subsidiaries for any reason, Options
held by the Optionee may only be exercised to the extent and during
the period, if any, set forth in the Option Agreement.
Transferability of Options. No Option shall be transferable
except by will or the laws of descent and distribution. An Option
shall be exercisable during the Optionee's lifetime only by the
Optionee.
Duration and Exercise of Options. Options may be exercised
for terms of up to but not exceeding ten (10) years from the date of
grant.
Other Terms and Conditions. Option agreements may contain any
other provision not inconsistent with the Plan that the Committee deems
appropriate.
Changes in Capital Structure. In the event of changes in the
outstanding capital stock of the Company by reason of any stock
dividend, stock split or reverse split, reclassification,
re-capitalization, merger or consolidation, acquisition of 80 percent
or more of its gross assets or stock, reorganization or liquidation,
the Committee and/or the Board shall make such adjustments in the
aggregate numbers and class of shares available under the Plan as it
deems appropriate.
Amendment and Termination of the 2001 Stock Option Plan. The
Board may amend the Plan and may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any Option
in the manner and to the extent deemed desirable to carry out the Plan
without action on the part of the shareholders of the Company. In
addition, the Company shall obtain shareholders' approval for any
amendment to the Plan in such a manner and to the extent necessary
to comply with applicable law or regulation.
Federal Income Tax Information
The federal income tax consequences to the Company and its employees of
awards under the Plan are complex and subject to change. The following
discussion is only a summary of the general federal income tax rules
applicable to the Plan. It does not purport to be complete, and it does not
discuss the tax consequences of the participant's death, or the income tax
laws of any municipality, state or foreign country in which a participant
may reside.
Incentive Stock Options
An optionee who is granted an Incentive Stock Option will not
recognize income upon either at grant or exercise of the option, and the
Company will not be allowed a deduction for federal tax purposes. However,
the exercise may subject the optionee to the alternative minimum tax. Upon
a sale of the shares, the tax treatment to the optionee and the Company will
depend primarily upon whether the optionee has met certain holding period
requirements at the time of the sale of shares.
If an optionee exercises an Incentive Stock Option and does not
dispose of the shares received within two years after the date such option
was granted or within one year after the transfer of the shares to him or
her, any gain realized upon the disposition will be characterized as
long-term capital gain and, in such case, the Company will not be entitled
to a federal tax deduction.
If the optionee disposes of the shares either within two years after
the date the option is granted or within one year after the transfer of the
shares to him or her, such disposition will be treated as a disqualifying
disposition and an amount equal to the lesser of (1) the fair market value
of the shares on the date of exercise minus the exercise price, or (2) the
amount realized on the disposition minus the exercise price, will be taxed
as ordinary income to the optionee in the taxable year in which the
disposition occurs. A different rule for measuring ordinary income upon such
a premature disposition may apply if the optionee is also an officer,
director, or 10% shareholder of the Company.
The exercise of an Incentive Stock Option may subject an optionee to
alternative minimum tax liability. The excess of the fair market value of the
shares at the time an Incentive Stock Option is exercised over the purchase
price of the shares is included in income for purposes of the alternative
minimum tax even though it is not included in taxable income for purposes of
determining the regular tax liability of an employee. Consequently, an
optionee may be obligated to pay alternative minimum tax in the year he or
she exercises an Incentive Stock Option.
In general, there will be no federal income tax deductions allowed to
the Company upon the grant, exercise, or termination of an Incentive Stock
Option. However, in the event an optionee sells or otherwise disposes of
stock received on the exercise of an incentive stock option in a
disqualifying disposition, the Company will be entitled to a deduction for
federal income tax purposes in an amount equal to the ordinary income, if
any, recognized by the optionee upon disposition of the shares, provided
that the deduction is not otherwise disallowed under the Code.
Non-Qualified Stock Options
Options that do not qualify as Incentive Stock Options are referred
to as Non-Qualified Stock Options. An optionee generally will not recognize
any taxable income at the time he or she is granted a Non-Qualified Stock
Option. However, upon its exercise, the optionee will recognize ordinary
income for federal tax purposes measured by the excess of the then fair
market value of the shares over the exercise price.
The optionee's basis for determination of gain or loss upon the
subsequent disposition of shares acquired upon the exercise of a Non-Qualified
Stock Option will be the amount paid for such shares plus any ordinary income
recognized as a result of the exercise of such option. Upon disposition of
any shares acquired pursuant to the exercise of a Non-Qualified Stock Option,
the difference between the sale price and the optionee's basis in the shares
will be treated as a capital gain or loss and generally will be characterized
as long-term capital gain or loss if the shares have been held for more than
one year at their disposition.
In general, there will be no federal income tax deduction allowed to
the Company upon the grant or termination of a Non-Qualified Stock Option or
a sale or disposition of the shares acquired upon the exercise of a
Non-Qualified Stock Option. However, upon the exercise of a Non-Qualified
Stock Option, the Company will be entitled to a deduction for federal income
tax purposes equal to the amount of ordinary income that an optionee is
required to recognize as a result of the exercise, provided that the
deduction is not otherwise disallowed under the Code.
Board Recommendation on Proposal 2; Vote Required
Approval of the adoption of the 2001 Stock Option Plan and the
related reservation of the 2,000,000 shares of common stock for issuance
thereunder requires the favorable vote of a majority of the Votes Cast on
the Proposal, provided that such favorable vote constitutes at least a
majority of the required quorum for the Annual Meeting.
THE BOARD OF THE DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
APPROVAL OF THE 2001 STOCK OPTION PLAN AND THE RESERVATION OF 2,000,000
COMMON SHARES THEREUNDER.
PROPOSAL 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
On recommendation of the Audit Committee, the Board of Directors has
selected PricewaterhouseCoopers LLP, as independent public accountants to
audit the financial statements of the Company for the fiscal year ending
March 30, 2002. PricewaterhouseCoopers LLP, was the Company's independent
public accountants for the fiscal year ending March 31, 2001.
Representatives of PricewaterhouseCoopers LLP are expected to be present at
the Annual Meeting to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.
Accountants Fees. The following table sets forth the aggregate fees
billed or to be billed by PricewaterhouseCoopers LLP for the following services
during fiscal 2001:
Description of Services Fees
Audit fees (1).....................................................$ 147,000
Financial information system design and implementation fees (2).... --
All other fees(3)..................................................$ 68,000
Total..............................................................$ 215,000
(1) Audit Fees: represents the aggregate fees billed or to be billed for
professional services rendered for the audit of our 2001 annual financial
statements and for the review of the financial statements included in our
quarterly reports during such period.
(2) Financial Informaiton System Design and Implementation Fees: represents
the aggregate fees billed for operating or supervising the operation of our
information system or managing our local area network and/or designing or
implementing a hardware or software system that aggregates data or generates
information that is significant to the generation of our financial statements.
(3) Other Fees: represents the aggregate fees billed in fiscal 2001 for
services other than audit and other than financial information system design
and implementation including, for example, fees for tax services and
registration statements.
Board Recommendation on Proposal 3; Vote Required
The ratification of the appointment of PricewaterhouseCoopers LLP as
the Company's independent auditors for the fiscal year ending March 30, 2002,
will be approved upon the favorable vote of the majority of the Votes Cast on
the Proposal, provided that such favorable vote constitutes at least a
majority of the required quorum for the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE YEAR ENDING MARCH 30, 2002. THE
VOTE REQUIRED TO APPROVE THIS PROPOSAL IS A MAJORITY OF THE SHARES PRESENT
AND VOTING AT THE MEETING.
STOCK PERFORMANCE TABLE
The following table shows a five-year comparison of cumulative total
return for the Company's Common Stock, the Nasdaq Composite Total Return
Index (U.S.), and the Nasdaq Electronic Components Total Return Index. The
stock price performance shown on the table below is not necessarily
indicative of future price performance.
Comparison of Five Year cumulative Total Return*
3/96 3/97 3/98 3/99 3/00 3/01
Nasdaq Composite $100 $111 $168 $228 $423 $169
Nasdaq Electronic $100 $176 $201 $290 $841 $264
stocks
Supertex, Inc. $100 $93 $89 $83 $237 $100
- -----------------------------------
<FN>
* Assumes investment of $100 on April 1, 1996.
</FN>
OTHER MATTERS
The Board of Directors know of no other matters to be submitted to the
Meeting. If any matters properly come before the Meeting, it is the intention
of the persons named in the enclosed proxy card to vote the shares they
represent as the Board of Directors may recommend.
It is important that your stock be represented at the meeting,
regardless of the number of shares which you hold. You are, therefore, urged
to mark, sign, date, and return the accompanying Proxy as promptly as
possible in the postage-paid envelope enclosed for that purpose.
Any person who was a beneficial owner of common stock on the record
date for the 2001 Annual Meeting may obtain a copy of the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 2001 filed with the
Securities and Exchange Commission without charge (except for exhibits to
such annual report, which will be furnished upon payment of the Company's
reasonable expenses in furnishing such exhibits). The request for such
materials should identify the person making the request as a shareholder of
the Company as of the record date and should be directed to Investor
Relations, 1235 Bordeaux Drive, Sunnyvale, California 94089.
By Order of the Board of Directors,
/s/ Benedict C. K. Choy
Corporate Secretary
Dated: July 16, 2001
Appendix A
Audit Committee Charter
The Audit Committee ("the Committee"), of the Board of Directors ("the Board")
of Supertex, Inc. ("the Company" or "Supertex"), will have the oversight
responsibility, authority and specific duties as described below.
COMPOSITION
The Committee will be comprised of three or more directors as determined by
the Board by June 14, 2001. The members of the Committee will meet the
independence and experience requirements of the Nasdaq Marketplace Rule
related to the structure and composition of the Audit Committee. The members
of the Committee will be elected annually at the organizational meeting of
the full Board held in August and will be listed in the annual report to
shareholders. One of the members of the Committee will be elected Committee
Chair by the Board.
RESPONSIBILITY
The Committee is a part of the Board. Its primary function is to assist the
Board in fulfilling its oversight responsibilities with respect to (i) the
annual financial information to be provided to shareholders and the Securities
and Exchange Commission (SEC); (ii) the system of internal controls that
management has established; and (iii) the internal and external audit process.
In addition, the Committee provides an avenue for communication between the
independent accountants, financial management and the Board. The Committee
should have a clear understanding with the independent accountants that they
must maintain an open and transparent relationship with the Committee, and
that the ultimate accountability of the independent accountants is to the
Board and the Committee. The Committee will make regular reports to the
Board concerning its activities.
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete
and accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of management and the independent
auditor. Nor is it the duty of the Audit Committee to conduct investigations,
to resolve disagreements, if any, between management and the independent
auditor or to assure compliance with laws and regulations and the Company's
business conduct guidelines.
AUTHORITY
Subject to the prior approval of the Board, the Committee is granted the
authority to investigate any matter or activity involving financial
accounting and financial reporting, as well as the internal controls of the
Company. In that regard, the Committee will have the authority to approve
the retention of external professionals to render advice and counsel in such
matters. All employees will be directed to cooperate with respect thereto as
requested by members of the Committee.
MEETINGS
The Committee is to meet at least four times annually and as many additional
times as the Committee deems necessary. Content of the agenda for each
meeting should be cleared by the Committee Chair. The Committee is to meet
in separate executive sessions with the chief financial officer and
independent accountants at least once each year and at other times when
considered appropriate.
ATTENDANCE
Committee members will strive to be present at all meetings. As necessary
or desirable, the Committee Chair may request that members of management and
representatives of the independent accountants be present at Committee
meetings whenever necessary.
SPECIFIC DUTIES
In carrying out its oversight responsibilities, the Committee will:
1. Review and reassess the adequacy of this charter annually and recommend
any proposed changes to the Board for approval. This should be done in
compliance with applicable Nasdaq Audit Committee Requirements.
2. Review with the Company's management and independent accountants the
Company's accounting and financial reporting controls.
3. Review with the Company's management and independent accountants
significant accounting and reporting principles, practices and procedures
applied by the Company in preparing its financial statements. Discuss with
the independent accountants their judgements about the quality, not just the
acceptability, of the Company's accounting principles used in financial
reporting.
4. Review the scope and general extent of the independent accountants' annual
audit. The Committee's review should include an explanation from the
independent accountants of the factors considered by the accountants in
determining the audit scope, including the major risk factors. The
independent accountants should confirm to the Committee that no limitations
have been placed on the scope or nature of their audit procedures. The
Committee will review annually with management the fee arrangement with the
independent accountants.
5. Inquire as to the independence of the independent accountants and obtain
from the independent accountants, at least annually, a formal written
statement delineating all relationships between the independent accountants
and the Company as contemplated by Independence Standards Board Standard
No. 1, Independence Discussions with Audit Committees.
6. Have a predetermined arrangement with the independent accountants that
they will advise the Committee through its Chair and management of the
Company of any matters identified through procedures followed for interim
quarterly financial statements, and that such notification as required under
standards for communication with Audit Committees is to be made prior to
filing Forms 10-Q.
7. At the completion of the annual audit, review with management and the
independent accountants the following:
* The annual financial statements and related footnotes and financial
information to be included in the Company's annual report to shareholders
and on Form 10-K.
* Results of the audit of the financial statements and the related report
thereon and, if applicable, a report on changes during the year in accounting
principles and their application.
* Significant changes to the audit plan, if any, and any serious disputes or
difficulties with management encountered during the audit. Inquire about the
cooperation received by the independent accountants during their audit,
including access to all requested records, data and information. Inquire of
the independent accountants whether there have been any disagreements with
management which, if not satisfactorily resolved, would have caused them to
issue a nonstandard report on the Company's financial statements.
* Other communications as required to be communicated by the independent
accountants by Statement of Auditing Standards (SAS) 61 as amended by SAS 90
relating to the conduct of the audit.
If deemed appropriate after such review and discussion, recommend to the Board
that the financial statements be included in the Company's annual report on
Form 10-K.
8. After preparation by management and review by independent accountants,
approve the report required under SEC rules to be included in the Company's
annual proxy statement. The charter is to be published as an appendix to the
proxy statement every three years.
9. Discuss with the independent accountants the quality of the Company's
financial and accounting personnel. Also, elicit the comments of management
regarding the responsiveness of the independent accountants to the Company's
needs.
10. Meet with management and the independent accountants to discuss any
relevant significant recommendations that the independent accountants may
have, particularly those characterized as 'material' or 'serious'.
Typically, such recommendations will be presented by the independent
accountants in the form of a Letter of Comments and Recommendations to the
Committee. The Committee should review responses of management to the
Letter of Comments and Recommendations from the independent accountants and
receive follow-up reports on action taken concerning the aforementioned
recommendations.
11. Recommend to the Board the selection, retention or termination of the
Company's independent accountants.
12. Review with management and the independent accountants the methods used
to establish and monitor the Company's policies with respect to unethical or
illegal activities by Company employees that may have a material impact on
the financial statements.
13. Generally as part of the review of the annual financial statements,
receive an oral report(s), at least annually, from the Company's general
counsel concerning legal and regulatory matters that may have a material
impact on the financial statements.
14. As the Committee may deem appropriate, obtain, weigh and consider expert
advice as to Audit Committee related rules of the Nasdaq Marketplace,
Statements on Auditing Standards and other accounting, legal and regulatory
provisions.
SUPERTEX, INC.
ANNUAL MEETING OF SHAREHOLDERS, AUGUST 17, 2001
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
The undersigned shareholder of SUPERTEX, INC., a California
corporation, hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders and Proxy Statement, each dated July 16,
2001, and hereby appoints Henry C. Pao as proxy and attorney-in-fact,
with full power of substitution, on behalf and in the name of the
undersigned, to represent the undersigned at the Annual Meeting of
Shareholders of SUPERTEX, INC., to be held on August 17, 2001, at
10:00 a.m., local time, at the principal offices of the Company,
located at 1235 Bordeaux Drive, Sunnyvale, California, 94089 and
at any adjournments thereof, and to vote all shares of Common Stock
which the undersigned would be entitled to vote if then and there
personally present, on the matters set forth on the opposite side.
THE PROXY WILL BE VOTED AS DIRECTED, OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF THE NOMINATED DIRECTORS,
FOR APPROVAL OF THE ADOPTION OF THE 2001 STOCK OPTION PLAN, FOR THE
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS
INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING MARCH 30, 2002,
AND AS SUCH PROXY DEEMS ADVISABLE ON SUCH OTHER MATTERS AS MAY COME
BEFORE THE MEETING.
SUCH PROXY AND ATTORNEY, OR SUBSTITUTE, SHALL BE PRESENT AND SHALL
ACT AT THE MEETING OR ANY ADJOURNMENT OR ADJOURNMENTS THEREOF AND MAY
EXERCISE ALL OF THE POWERS OF SUCH PROXY AND ATTORNEY-IN-FACT
HEREUNDER.
(CONTINUED AND TO BE MARKED, DATED AND SIGNED ON THE REVERSE SIDE)
Please make your vote as indicated in this example [ X ]
1. ELECTION OF DIRECTORS:
Nominees:
Henry C. Pao
Benedict Choy
Richard Siegel
W. Mark Loveless
Elliott Schlam
Milton Feng
Instruction: If you wish to withhold authority to vote for any
individual nominee, strike a line through the nominee's
name in the list above.
[ ] FOR all nominees (except as indicated above)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above.
2. PROPOSAL TO APPROVE THE 2001 STOCK OPTION PLAN AND RESERVE 2,000,000
SHARES FOR ISSUANCE THEREUNDER:
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
3. PROPOSAL TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP
AS THE INDEPENDENT ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR ENDING
MARCH 30, 2002:
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
In his discretion, the proxy is authorized to vote upon such other matters
as may properly come before the meeting or any adjournment or adjournments
thereof.
If shares are jointly held, each holder should sign. If signing for estates,
trusts, corporations, or partnerships, title and capacity should be stated.
PLEASE MARK, DATE, AND SIGN EXACTLY AS YOUR NAME(S) APPEARS HEREON, AND
RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
Signature: Date:
Signature: Date: