exhibit10-8.htm


    Supertex
Profit-Sharing Bonus Incentive Plan

     

    I.  Purpose

     

    Supertex, Inc. (“the Company”)
maintains a Profit-Sharing Bonus Incentive Plan (the “Plan”)  as a
part of its total compensation package for employees. The Plan is a
discretionary incentive plan to encourage employees to perform to the best of
their ability and to continue their employment with the Company.

     

    II.  Plan
Accrual

     

             The
Plan is funded by an accrual each fiscal half-year of up to 10% of operating
profit before taxes and other adjustments.   To the extent the
amount accrued in any fiscal half-year is not distributed, it is carried over
for potential distribution in the future.  The Management determines
the amount of the accrual each fiscal half-year and whether unusual events or
transactions, including asset sales or write-offs, will be included within
operating profit.

     

    III.  Plan
Components

     

    Funds accrued in the Plan are allocated
into three parts: (1) Company matching contributions to the 401(k) plan (as of
2010 up to approximately $1,000 per employee); (2) a sum to enable the Company
to sponsor functions and activities intended to boost employee morale as well as
to cover other expenses benefitting employees; and (3) bonus incentive
distributions to employees for their performance in the relevant half-year and
their continued loyalty to the Company; with any unallocated balance of the
accrual carried over for potential use in the future along with any unspent
allocated amount.

     

    A.  401(k) Match

     

               The
401(k) match is typically made at the end of each fiscal quarter in an amount
determined and allocated among Company 401(k) plan participants as provided in
the Company’s 401(k) plan.

     

    B.  Employee Morale
Sum

     

    The sum for employee morale is
typically a relatively small component of the Plan and is either distributed to
employees or spent by the Company on behalf of the employees.  This
sum may be allocated among various departments or subgroups who have made
superior contributions.  The amount and allocation of this sum is
determined by the management.

     

               C.  Bonus
Incentive Distributions

     

    In a typical year, the largest Plan
component is the bonus incentive distribution.  The Executive
Compensation Committee members have discussions with the CEO and determine the
amount of the accrued funds in the Plan to be used for bonus incentive
distributions and the percentage of this amount to be distributed to the
executive officers as a group.  The amount distributed to all
executive officers as a group generally has been in the range of 25% to 35% of
the total bonus incentive distributions, typically being higher in the range for
a highly profitable period and lower in less profitable
period.  Distributions typically occur around mid-December and
mid-June after the respective Board of Director Compensation Committees approve
the subpool allocations as described below and the resulting
distributions.

     

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    1.  Bonus Points

     

    The Company believes that the level of
profits it achieves is dependent upon the performance of each employee.
Therefore, high performing employees will receive higher bonus incentive
distributions relative to their position level and ranking, while non-performers
will not receive a distribution.  Accordingly, the Company awards
bonus points to each employee and the profit-sharing bonus incentive is
distributed among non-officer employees in one sub-pool, and among officers in
another sub-pool, based on their respective bonus points.  The Company
utilizes a formula to determine bonus points, which includes as primary factors
employment grade level, seniority with the Company per the vesting schedule
described below, and employee performance including
attendance.  Managers evaluate the employees reporting to them in
order to determine their performance ranking.  Management also
nominates a certain number of “Key” non-officer employees, typically ten (10),
for their outstanding performance during the period.  The “Key”
employees’ points are increased through use of a multiplier factor greater than
one.

     

    2.  Vesting

     

    In order to be eligible for a bonus
incentive distribution, an employee must have been a regular, full time employee
for at least three full months during the relevant fiscal half-year and must so
remain at the time the distribution is paid.  An employee vests 12.5%
for each full three-month period of full-time employment and the vesting
percentage is determined at the end of the relevant fiscal
half-year.  As an example, if an employee completes at least three
months but less than six months of full-time employment during the employee’s
initial profit-sharing period, the employee receives 12.5% of what would
otherwise be the employee’s distribution (one-eighth). During the second six
month period, the employee receives 37.5% of what would otherwise be the
employee’s distribution (three-eighths), and so on until the employee is vested
100%.

     

    3.  Point Allocation
Approval

     

    a. Non-Officers

     

    In December and June each year, after
all the bonus points are tallied for non-executive employees, the Board of
Directors Compensation Committee determines a dollar multiplier to the bonus
points by dividing the applicable sub-pool by the aggregate
points.  The resulting proposed distribution is reviewed and, after
any suggested modifications are made, approved by the Compensation
Committee.

     

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    b.Officers

     

    The Board of Directors Executive
Compensation Committee members determine the performance ranking of the CEO and,
with input from the CEO, the performance ranking of the other executive
officers. The Company management then generates a proposed distribution of the
applicable sub-pool which the Executive Compensation Committee considers and,
after any suggested modifications are made, ultimately
approves.

     

    IV.  Other Terms and
Conditions

     

    The Board of Directors in its sole
discretion may change any aspect of the Plan or terminate the Plan at any time
without notice.  Nothing in the Plan alters the at-will nature of
employment at Supertex.  The Company and the employee are free to
terminate employment at any time, with or without cause and with or without
notice.

     

    


     


    
      
         


      

      
        iii