Appendix B
SUPERTEX, INC.
2001 STOCK OPTION PLAN
1. Purpose.
The purpose of the Supertex, Inc. 2001 Stock Option Plan (the "Plan") is
to provide for the grant of stock options as an incentive to selected
directors, officers, employees and consultants of Supertex, Inc. (the
"Company") and any Subsidiary of the Company to acquire a proprietary
interest in the Company, to continue as directors, officers, employees and
consultants and to increase their efforts on behalf of the Company.
2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth
below:
(a) "Board " shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and any regulations promulgated thereunder.
(c) "Committee" shall mean the committee described in Section 3.
(d) "Company" shall mean Supertex, Inc., a California corporation, and any
successor corporation.
(e) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
(f) "Fair Market Value" means, as of any date, the value of Stock determined
as follows:
(i) If the Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock
Market, its Fair Market Value shall be the closing sales price for
such Stock (or the closing bid, if no sales were reported) as quoted
on such exchange or system on the last market trading day prior to
the day of determination, as reported in The Wall Street Journal or
such other source as the Committee deems reliable;
(ii) If the Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the
Stock on the last market trading day prior to the day of
determination; or
(iii) In the absence of an established market for the Stock, the Fair
Market Value thereof shall be determined in good faith by the
Committee.
(g) "Grantee" shall mean an officer, director, employee or consultant of the
Company to whom an Option has been granted under the terms of the Plan.
(h) "Incentive Stock Option" shall mean an option granted under the Plan that
is intended to meet the requirements of Section 422 of the Code or any
successor provision.
(i) "Non-employee Director" shall mean a director of the Company who is a
"non-employee director" within the meaning of Rule 16b-3.
(j) "Non-Qualified Stock Option" shall mean an option granted under the Plan
that is not intended to be an Incentive Stock Option.
(k) "Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option.
(l) "Option Agreement" shall mean a written agreement between the Company and
a Grantee as described in Section 6.
(m) "Outside Director" shall mean a director of the Company who is an
"outside director" within the meaning of Section 162(m) of the Code.
(n) "Plan" shall mean this Supertex, Inc. 2001 Stock Option Plan, as amended
from time to time.
(o) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended, or
any successor rule or regulation.
(p) "Stock" shall mean shares of Common Stock, no par value, of the Company
pursuant to an adjustment made under Section 8.
(q) "Subsidiary" shall mean any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain owns more
than 50% of the total combined voting power of all classes of stock in one
of the other corporations in such chain.
3. Administration.
(a) 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; provided, however, that (i) if
the Committee consists of less than the entire Board, each member shall be a
Non-employee Director and (ii) to the extent necessary for an Option intended
to qualify as performance-based compensation under Section 162(m) of the
Code to so qualify, each member of the Committee shall be an Outside Director.
(b) The Committee shall have plenary authority in its discretion, subject
only to the express provisions of the Plan and, in reference to the Incentive
Stock Options, to Code Section 422:
(i) to select the Grantees, the number of shares of Stock subject to
each Option and terms of the Option granted to each Grantee
(including without limitation the period during which such Option can
be exercised and any restrictions on exercise), provided that, in
making its determination, the Committee shall consider the position
and responsibilities of the individual, the nature and value to the
Company of his or her services and accomplishments, the individual's
present and potential contribution to the success of the Company and
any other factors that the Committee may deem relevant;
(ii) to determine the dates of the Option grants;
(iii) to prescribe the form of the Option Agreements;
(iv) to adopt, amend and rescind rules and regulations for the
administration of the Plan and for its own acts and proceedings;
(v) to decide all questions and settle all controversies and disputes
of general applicability that may arise in connection with the Plan;
and
(vi) to modify or amend any outstanding Option as provided in
Section 7(h).
All decisions, determinations and interpretations with respect to the
foregoing matters shall be made by the Committee and shall be final and
binding upon all persons.
(c) Delegation. The Committee may delegate authority to an officer of the
Company to grant Options to Grantees who are not subject to the short-swing
profit rules of Section 16 of the Exchange Act and are not "covered
employees" whose compensation is subject to the deduction limit of Section
162(m) of the Code, at the discretion of such appointed officer, provided,
however, that the appointed officer shall have no authority to grant Options
in units greater than twenty-five thousand (25,000) without approval of the
Committee.
(d) Exculpation. No member of the Board or Committee shall be personally
liable for monetary damages for any action taken or any failure to take any
action in connection with the administration of the Plan or the granting of
Options under it unless such action or failure to take action constitutes
self-dealing, willful misconduct or recklessness; provided, however, that the
provisions of this subsection shall not apply to the responsibility or
liability of a director pursuant to any criminal statute or to the liability
of a director for the payment of taxes pursuant to local, state or federal
law.
(e) Indemnification. Each member of the Board or Committee shall be
entitled without further act on his part or her part to indemnity from the
Company to the fullest extent provided by applicable law and the Company's
Certificate of Incorporation or Bylaws in connection with or arising out of
any action, suit or proceeding with respect to the administration of the
Plan or the granting of Options under it in which he or she may be involved
by reason of being or having been a member of the Board or Committee at the
time of the action, suit or proceeding.
4. Effectiveness and Termination of the Plan.
The Plan shall become effective as of June 1, 2001, provided that the Plan
is approved by the stockholders of the Company within one year of its
adoption. Any Option outstanding at the time of termination of the Plan
shall remain in effect in accordance with its terms and conditions and those
of the Plan. The Plan shall terminate on the earliest of:
(a) May 31, 2011; or
(b) the date when all shares of Stock reserved for issuance under Section 5
of the Plan shall have been acquired through exercise of Options granted
under the Plan; or
(c) such earlier date as the Board may determine.
5. The Stock.
The aggregate number of shares of Stock issuable under the Plan shall be
two million shares (2,000,000) or the number and kinds of shares of capital
stock or other securities substituted for the Stock as provided in Section 8.
The aggregate number of shares of Stock issuable under the Plan may be set
aside out of the authorized but unissued shares of Stock not reserved for any
other purpose, or out of shares of Stock held in or acquired for the treasury
of the Company. All shares of Stock subject to an Option that terminates
unexercised for any reason may thereafter be subjected to a new Option under
the Plan.
6. Option Agreement.
Each Grantee shall enter into an Option Agreement with the Company setting
forth the terms and conditions of the Option issued to the Grantee,
consistent with the Plan. The form of Option Agreement may be established at
any time or from time to time by the Committee. No Grantee shall have rights
in any Option unless and until an Option Agreement is entered into with the
Company.
7. Terms and Conditions of Options.
Options may be granted by the Committee at any time and from time to time
prior to the termination of the Plan. Except as hereinafter provided,
Options granted under the Plan shall be subject to the following terms and
conditions:
(a) Grantees. The Grantees shall be those employees, officers, directors
and consultants of the Company or its Subsidiaries, selected by the
Committee. Former employees and consultants may also be Grantees if the
Option is granted in connection with the services they rendered or the
termination of such services. No Incentive Stock Options shall be granted
to (i) any person owning Stock or other capital stock in the Company
possessing more than 10% of the total combined voting power of all classes
of capital stock of the Company, unless such Incentive Stock Option meets
the requirements of 7(b) and 7(e); or (ii) any director who is not an
officer. The maximum number of shares of Stock which may be issued pursuant
to Options granted to a Grantee within a calendar year is one-hundred
thousand (100,000), as adjusted for stock splits, stock dividends and like
events.
(b) 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. If a
Grantee owns more than 10% of the total combined voting power of all classes
of stock of the Company or any Subsidiary, the exercise price of any
Incentive Stock Option granted to such individual shall be 110% of the Fair
Market Value of the Stock. The per Share exercise price of a Non-Qualified
Stock Option may not 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 162(m)
of the Code, the per Share exercise price shall be no less than 100% of the
Fair Market Value, without regard to any restriction, on the date such
Nonqualified Stock Option is granted.
(c) Payment for Stock. The exercise price of an Option shall be paid in full
at the time of the exercise (i) in cash, or (ii) by certified check payable
to the Company, or (iii) by other mode of payment (e.g., stock) as the
Committee may approve.
(d) Limitation. Notwithstanding any provision of the Plan to the contrary,
an Option shall not be treated as an Incentive Stock Option to the extent
the aggregate fair market value (determined as of the time the Incentive
Stock Option is granted) of Stock for which Incentive Stock Options are
exercisable for the first time by a Grantee during any calendar year exceeds
$100,000. Such excess Options shall be treated as Non-Qualified Stock
Options. For purposes of this Section 7(d), Incentive Stock Options shall
be taken into account in the order in which they were granted, and the Fair
Market Value of the Shares shall be determined as of the time of grant.
(e) Duration and Exercise of Options. Options may be exercised for terms of
up to but not exceeding ten years from the date of grant. Subject to the
foregoing, Options shall be exercisable at the times and in the amounts (up
to the full amount thereof) determined by the Committee at the time of
grant. If an Option granted under the Plan is exercisable in installments
the Committee shall determine what events, if any, will make it subject to
acceleration. The term of an Incentive Stock Option granted to an employee
who owns more than 10% of the combined voting power of all classes of stock
of the Company shall not exceed 5 years.
(f) Termination of Services. Upon the termination of a Grantee's services
for the Company or its Subsidiaries for any reason, Options held by the
Grantee may only be exercised to the extent and during the period, if any,
set forth in the Option Agreement.
(g) Transferability of Option. No Option shall be transferable except by
will or the laws of descent and distribution. An Option shall be exercisable
during the Grantee's lifetime only by the Grantee.
(h) Modification, Extension and Renewal of Options. Subject to the terms and
conditions and within the limitations of the Plan, the Committee may modify,
extend or renew outstanding Options granted under the Plan, or accept the
surrender of outstanding options (to the extent not theretofore exercised)
and authorize the granting of new Options in substitution thereof.
Notwithstanding the foregoing, however, no modification of an Option shall,
without the consent of the Grantee, alter or impair any rights or
obligations under any Option theretofore granted under the Plan or adversely
affect the status of an Incentive Stock Option.
(i) Other Terms and Conditions. Option Agreements may contain any other
provision not inconsistent with the Plan that the Committee deems
appropriate.
8. Changes in Capital Structure.
(a) Effect on the Plan. 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 number and class of shares available under the
Plan as it deems appropriate, and such determination shall be final, binding
and conclusive.
(b) In Outstanding Options.
(i) Stock Splits and Like Events.
Should a stock dividend, stock split, reverse stock split,
reclassification, or re-capitalization occur, then the Committee
and/or the Board shall make such adjustments in (i) the number
and class of shares to which optionees will thereafter be
entitled upon exercise of their options and (ii) the price which
optionees shall be required to pay upon such exercise as it in
its sole discretion in good faith deems appropriate, and such
determination shall be final, binding and conclusive.
Notwithstanding the foregoing, such adjustment shall have the
result that an optionee exercising an option subsequent to such
occurrence would pay the same aggregate exercise price to
exercise the entire option and would then hold the same class
and aggregate number of shares as if such optionee would have
exercised the outstanding option immediately prior to such
occurrence.
(ii) Recapitalizations; Assumption of Options.
(A) Definition of "Event".
An "Event" shall mean the occurrence of any of the following
transactions:
(I) a merger or consolidation in which the Company is the
surviving corporation if Company shareholders as a result of
the merger or consolidation receive stock of another
corporation and/or property in exchange for their Company
shares or any merger or consolidation in which the Company is
not the surviving corporation (other than a merger or
consolidation with a wholly owned subsidiary, a
re-incorporation of the Company in a different jurisdiction,
or other transaction in which there is no substantial change
in the shareholders of the Company and the options granted
under this Plan are assumed by the successor corporation,
which assumption shall be binding on all optionees);
(II) a dissolution or liquidation of the Company;
(III) the sale of substantially all of the assets of the
Company; or
(IV) any other transaction which qualifies as a transaction
to which Section 424(a) of the Code may apply wherein the
shareholders of the Company give up all of their equity
interest in the Company (except for the acquisition, sale or
transfer of all or substantially all of the outstanding
shares of the Company).
(B) Effect of "Event".
Upon the consummation of an Event, the Board shall make
arrangements which shall be binding upon the holders of
unexpired options then outstanding under this Plan as the Board,
in its sole discretion, in good faith determines to be in the
best interests of the Company, which determination shall be
final and conclusive. The possible arrangements include, but
are not limited to, the substitution of new options for any
portion of such unexpired options, the assumption of any portion
of such unexpired options by any successor to the Company or its
affiliate, the acceleration of the expiration date of any
portion of such unexpired options to a date not earlier than
thirty (30) days after notice to the optionee, or the
cancellation of such portion in exchange for the payment by any
successor to the Company or its affiliate of deferred
compensation to the optionee. (Such deferred compensation may
(but need not) be in an amount equal to the difference between
the fair market value of the Shares subject to such unexpired
portion and the aggregate exercise price of the Shares under the
terms of such unexpired portion on the date of the Event and may
(but need not) be paid in installments which correspond to the
vesting schedule of the unexpired option.) The Board shall not
be obligated to arrange such substitution or assumption to
comply with Section 424(a) of the Code or to accelerate the
exercisability of a portion of an option when it accelerates
the expiration date of such portion. The Board may but need not
treat all options in a like manner.
(C) Company Acquisitions.
The Company, from time to time, also may substitute or
assume outstanding awards granted by another company, whether in
connection with an acquisition of such other company or
otherwise, by either (i) granting an option under the Plan in
substitution of such other company's award, or (ii) assuming
such award as if it had been granted under the Plan if the terms
of such assumed award could be applied to an option granted
under the Plan. Such substitution or assumption shall be
permissible if the holder of the substituted or assumed option
would have been eligible to be granted an option under the Plan
if the other company had applied the rules of the Plan to such
grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award shall
remain unchanged (except that the exercise price and the number
and nature of shares issuable upon exercise of any such option
will be adjusted appropriately pursuant to Section 424(a) of the
Code). In the event the Company elects to grant a new option
rather than assuming an existing option, such new option may be
granted with a similarly adjusted exercise price.
9. Amendment of the 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 stockholders of the Company; provided,
however, that, except as provided in Section 8 and this Section 9, unless
the stockholders of the Company shall have first approved thereof (i) the
total number of shares of Stock subject to the Plan shall not be increased,
(ii) no Option shall be exercisable more than ten years after the date it
is granted, (iii) the expiration date of the Plan shall not be extended and
(iv) no amendment shall permit the exercise price of any Option to be less
than the Fair Market Value of the Stock at the time of grant, increase the
number of shares of Stock to be received on exercise of an Option,
materially increase the benefits accruing to a Grantee under an Option or
modify the eligibility requirements for participation in the Plan.
10. Interpretation and Construction.
The interpretation and construction of any provision of the Plan by the
Committee shall be final, binding and conclusive for all purposes.
11. Application of Funds.
The proceeds received by the Company from the sale of Stock pursuant to
this Plan will be used for general corporate purposes.
12. No Obligation to Exercise Option.
The granting of an Option shall impose no obligation upon the Grantee to
exercise an Option.
13. Plan Not a Contract of Employment.
Neither the Plan nor any Option Agreement is a contract of employment,
and the terms of employment of any Grantee shall not be affected in any
way by the Plan or related instruments except as specifically provided
therein. The establishment of the Plan shall not be construed as
conferring any legal rights upon any Grantee for a continuance of
employment; nor shall it interfere with the right of the Company (or its
Subsidiary, if applicable) to discharge the Grantee.
14. Expense of the Plan.
All of the expenses of administering the Plan shall be paid by the
Company.
15. Compliance with Applicable Law.
Notwithstanding anything herein to the contrary, the Company shall
not be obligated to cause to be issued or delivered any certificates for
shares of Stock issuable upon exercise of an Option unless and until the
Company is advised by its counsel that the issuance and delivery of the
certificates is in compliance with all applicable laws, regulations of
government authorities and requirements of any exchange upon which shares of
Stock are traded. The Company shall in no event be obligated to register any
securities pursuant to the Securities Act of 1933 (as now in effect or as
hereafter amended) or to take any other action in order to cause the issuance
and delivery of certificates to comply with any of those laws, regulations or
requirements. The Committee may require, as a condition of the issuance and
delivery of certificates and in order to ensure compliance with those laws,
regulations and requirements, that the Grantee make such covenants,
agreements and representations as the Committee, in its sole discretion,
deems necessary or desirable. Each Option shall be subject to the further
requirement that if at any time the Committee shall determine in its
discretion that the listing or qualification of the shares of Stock subject
to the Option, under any securities exchange requirements or under any
applicable law, or the consent or approval of any regulatory body, is
necessary in connection with the granting of the Option or the issuance of
Stock thereunder, the Option may not be exercised in whole or in part unless
the listing, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee.
16. Governing Law.
Except to the extent preempted by federal law, this Plan shall be
construed and enforced in accordance with, and governed by, the laws of the
State of California.