false 0001173489 0001173489 2024-02-12 2024-02-12
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported): February 12, 2024
 
 
CEVA, INC.
(Exact Name of Registrant as Specified in Charter)
 
 
Delaware
  
000-49842
  
77-0556376
(State or Other Jurisdiction
of Incorporation)
  
(Commission
File Number)
  
(I.R.S. Employer
Identification No.)
 
15245 Shady Grove Road, Suite 400, Rockville, MD 20850
(Address of Principal Executive Offices, and Zip Code)
 
(240) 308-8328
Registrant’s Telephone Number, Including Area Code
 
Not applicable 
(Former Name or Former Address, if Changed Since Last Report)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 
☐
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
  
Trading Symbol(s)
  
Name of each exchange on which
registered
Common Stock, $0.001 par value
  
CEVA
  
The NASDAQ Stock Market LLC
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2 of this chapter).
 
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
 
 
 
 
ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
 
Appointment of Director
 
On February 13, 2024, the Board of Directors (the “Board”) of Ceva, Inc. (the “Corporation”) increased the size of the Board by one director from seven to eight and appointed Amir Panush, the Corporation’s Chief Executive Officer, as a member of the Board, to serve as a director until the Corporation’s 2024 annual meeting of stockholders and until his successor is duly elected and qualified, or until his earlier death, resignation or removal. As the Corporation’s Chief Executive Officer, Mr. Panush is not currently considered an independent director. As such, Mr. Panush will not serve on any committees of the Board and will not receive any compensation for his director service apart from his compensation for his services as Chief Executive Officer of the Corporation.
 
There are no arrangements or understandings between Mr. Panush and any other person pursuant to which Mr. Panush was selected as a member of the Board. In addition, there are no transactions in which Mr. Panush has an interest that are required to be disclosed pursuant to Item 404(a) of Regulation S-K.
 
2024 Executive Bonus Plan for Chief Executive Officer, Chief Financial Officer and Chief Operating Officer
 
On February 12, 2024, the Compensation Committee (the “Committee”) of the Board approved a 2024 Executive Bonus Plan (the “2024 Executive Plan”), effective as of January 1, 2024, for Amir Panush, the Corporation’s Chief Executive Officer, Yaniv Arieli, the Corporation’s Chief Financial Officer, and Michael Boukaya, the Corporation’s Chief Operating Officer.
 
The Committee believes that the 2024 Executive Plan is an important part of maintaining the overall competitiveness of the Corporation’s executive compensation program and serves as an effective device to motivate its executive officers to achieve the financial and strategic goals and objectives reflected in the Corporation’s annual operating plan, which are designed to further the creation of long-term stockholder value.
 
Parameters of the 2024 Executive Plan are as follows:
 
Weighting
Financial Target
Threshold
for Receipt
of Bonus
Linear Calculation Above 90%
of Target
Linear Calculation above 100% of Target
40%
Specified 2024 revenue target approved by the Board (the “2024 Revenue Target”)
90% of 2024 Revenue Target
If the Corporation achieves between 90% and 100% of the 2024 Revenue Target, that percentage of the bonus amount, subject to 40% weighting, would be payable
For the 2024 Revenue Target, if the actual result exceeds 100% of the target, every 1% increase above the target, up to 110%, would result in an increase of 5% for Mr. Panush and an increase of 2.5% for each of Messrs. Arieli and Boukaya, subject to 40% weighting
40%
Specified 2024 non-GAAP earnings per share approved by the Board (the “2024 EPS Target”)
90% of 2024 EPS Target
If the Corporation achieves between 90% and 100% of the 2024 EPS Target, that percentage of the bonus amount, subject to 40% weighting, would be payable
For the 2024 EPS Target, if the actual result exceeds 100% of the target, every 1% increase above the target, up to 110%, would result in an increase of 5% for Mr. Panush and an increase of 2.5% for each of Messrs. Arieli and Boukaya, subject to 40% weighting
 
In addition, 20% weighting will be applied for execution of three covered customer agreements on parameters set by the Committee (the “2024 Customer Targets”), the achievement of which will be determined by the Compensation Committee in its sole discretion.
 
Under the 2024 Executive Plan, the target annual cash incentive award opportunities for each of Messrs. Panush, Arieli and Boukaya are established as a percentage of each such executive officer's base salary for 2024. The target and maximum award opportunities for Messrs. Panush, Arieli and Boukaya for 2024 are as follows: 
 
Named Executive Officer
  
Target Award
(as a percentage of base salary)
    
Maximum Award
(as a percentage of base salary)
  
Amir Panush
     70 %     120 %
Yaniv Arieli
     50 %     75 %
Michael Boukaya
     50 %     75 %
 
Payment of bonuses (if any) will be made in 2025. Bonuses will be paid in cash in a single lump sum, subject to payroll taxes and tax holdings. 
 
 
 
 
Due to their strategic significance, the Corporation believes that the disclosure of the 2024 Revenue Target, 2024 EPS Target and 2024 Customer Targets under the 2024 Executive Plan and, as applicable, the 2024 Incentive Bonus Plan discussed below, would cause future competitive harm to the Corporation and therefore are not disclosed.
 
The above is a description of the 2024 Executive Plan provided pursuant to Paragraph 10(iii) to Item 601 of Regulation S-K, which requires a written description of a compensatory plan when there is no formal document containing the compensation information.
 
2024 Incentive Bonus Plan for Chief Commercial Officer
 
On February 12, 2024, the Committee approved the 2024 Incentive Plan (the “Toquet 2024 Plan”) for Gweltaz Toquet, the Corporation’s Chief Commercial Officer, effective as of January 1, 2024.
 
In accordance with the Toquet 2024 Plan, the first portion of his bonus is based on a formula using the 2024 Revenue Target multiplied by a specified commission rate. With regard to this component, a commission multiplier of 1.0 is applied to the commission rate based on 0% to 100% achievement of the 2024 Revenue Target, and a commission multiplier of 1.5 is applied to the commission rate based on the achievement of the 2024 Revenue Target beyond 100%. Mr. Toquet’s bonus based on the achievement of the 2024 Revenue Target is capped at SEK 2,000,000. Mr. Toquet is also eligible to receive an additional quarterly bonus of $6,000 each if specified quarterly revenue targets based on the 2024 Revenue Target are achieved, to receive an additional strategic account bonus of either $6,000 or $10,000 each time he successfully executes a new intellectual property license agreement meeting an applicable predetermined royalty per chip and deal value, and to receive an additional strategic account bonus of $10,000 if he successfully executes new intellectual property license agreements above a certain predetermined aggregate deal value. The commission-based bonus is payable quarterly based on the criteria discussed above and is subject to any applicable payroll taxes and tax withholdings.
 
Due to their strategic significance, the Corporation believes that the disclosure of the commission rates, quarterly revenue targets, and requisite strategic agreement terms under the Toquet 2024 Plan would cause competitive harm to the Corporation and therefore are not disclosed.
 
The foregoing description of the Toquet 2024 Plan is qualified in its entirety by reference to the complete text of the plan, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
 
2024 Equity Award to the Corporation’s Executive Officers
 
On February 12, 2024, the Committee granted 33,318, 20,043, 16,399 and 13,535 time-based restricted stock units (“RSU”), effective as of February 16, 2024, to each of Messrs. Panush, Arieli, Boukaya and Toquet. The RSU awards to each of Messrs. Panush, Arieli, Boukaya and Toquet were made pursuant to the Corporation’s 2011 Equity Incentive Plan (the “2011 Plan”). The RSU grants vest 33.4% on February 16, 2025, 33.3% on February 16, 2026 and 33.3% on February 16, 2027.
 
Also, on February 12, 2024, the Committee granted 49,978, 13,362, 10,932 and 9,023 performance-based stock units (“PSUs”), effective as of February 16, 2024, to each of Messrs. Panush, Arieli, Boukaya and Toquet pursuant to 2011 Plan (collectively, the “Short-Term Executive PSUs”). The performance goals for the Short-Term Executive PSUs with specified weighting are as follows:
 
Weighting
Goals
50%
Vesting of the full 50% of the PSUs occurs if the Corporation achieves the 2024 license and related revenue target approved by the Board (the “2024 License Revenue Target”). The vesting threshold is achievement of 90% of the 2024 License Revenue Target. If the Corporation’s achievement of the 2024 License Revenue Target, is above 90% but less than 99% of the 2024 License Revenue Target, 91% to 99% of the eligible PSUs would be subject to vesting. If the Corporation’s actual result exceeds 100% of the 2024 License Revenue Target, every 1% increase of the 2024 License Revenue Target, up to 120%, would result in an increase of 2% of the eligible PSUs for Messrs. Arieli, Boukaya and Toquet and an increase of 3% of the eligible PSUs for Mr. Panush.
25%
Vesting of the full 25% of the PSUs occurs if the Corporation achieves positive total shareholder return whereby the return on the Corporation’s stock for 2024 is greater than the S&P Semiconductors Select Industry index (the “S&P index”). The vesting threshold is if the return on the Corporation’s stock for 2024 is at least 90% of the S&P index. If the return on the Corporation’s stock, in comparison to the S&P index, is above 90% but less than 99% of the S&P index, 91% to 99% of the eligible PSUs would be subject to vesting. If the return on the Corporation’s stock exceeds 100% of the S&P index, every 1% increase in comparison to the S&P index, up to 120%, would result in an increase of 2% of the eligible PSUs for Messrs. Arieli, Boukaya and Toquet and an increase of 3% of the eligible PSUs for Mr. Panush.
25%
Vesting of the full 25% of the PSUs occurs if the Corporation achieves positive total shareholder return whereby the return on the Corporation’s stock for 2024 is greater than the Russell 2000 index (the “Russell index”). The vesting threshold is if the return on the Corporation’s stock for 2024 is at least 90% of the Russell index. If the return on the Corporation’s stock, in comparison to the Russell index, is above 90% but less than 99% of the Russell index, 91% to 99% of the eligible PSUs would be subject to vesting. If the return on the Corporation’s stock exceeds 100% of the Russell index, every 1% increase in comparison to the Russell index, up to 120%, would result in an increase of 2% of the eligible PSUs for Messrs. Arieli, Boukaya and Toquet and an increase of 3% of the eligible PSUs for Mr. Panush.
 
 
 
 
Accordingly, assuming maximum achievement of the performance goals set forth above, PSUs representing an additional 60%, meaning an additional 29,986, would be eligible for vesting of Mr. Panush, and an additional 40%, meaning an additional 5,344, 4,372 and 3,609, would be eligible for vesting for each of Messrs. Arieli, Boukaya, and Toquet respectively.
 
Subject to achievement of the thresholds for the above performance goals for 2024, the Short-Term Executive PSUs vest 33.4% on February 16, 2025, 33.3% on February 16, 2026 and 33.3% on February 16, 2027.
 
2024 Salary Increase for Chief Commercial Officer
 
On February 12, 2024, the Committee approved a salary increase for Mr. Toquet, with his annual salary increasing from SEK 2,320,000 to SEK 2,500,000 (approximately $240,000). Mr. Toquet’s salary was last increased in January 2023 in connection with his promotion to Chief Commercial Officer. Approximate values are based on a conversion rate of 0.096 U.S. dollars per Swedish Krona on February 12, 2024.
 
 
 
 
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
 
(d) Exhibits:
 
Exhibit
Number
  
Description
     
10.1†
  
104
  
Cover Page Interactive Data File (embedded within the Inline XBRL document).
 
† Indicates management compensatory plan or arrangement.
 
 
Signature
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
CEVA, INC.
   
Date: February 16, 2024
By:
/s/ Yaniv Arieli
 
Name:
Yaniv Arieli
 
Title:
Chief Financial Officer
 
 
 

Exhibit 10.1

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH PORTIONS ARE MARKED AS INDICATED WITH BRACKETS (“[***]”) BELOW.

 

February 12, 2024

 

 

To: Gweltaz Toquet, CCO, Ceva, Inc. (the “Company”)

From: Amir Panush, CEO

 

 

2024 Incentive Bonus Plan (“IB Plan”)

 

This document details the composition for your Incentive Bonus for achieving pre-determined targets for calendar year 2024.

 

Effective date/terms: The IB Plan is effective from January 1, 2024 through December 31, 2024, unless modified in writing by the CEO. This plan supersedes all prior commission plans. The Company reserves the right to make changes to the IB Plan at any time with or without advance notice and for any reason, to the extent permitted by applicable law. The Company has the sole and absolute right and discretion to determine when incentive compensation under this IB Plan has been earned. All payments under this IB Plan are subject to deductions and withholdings required by applicable law. Nothing in this IB Plan changes your at-will employment status with the Company.

 

Plan Eligibility: The IB Plan applies to full-time sales personnel. If you resign, your employment is terminated, or you otherwise cease to be an employee of the Company for any reason, you will be eligible to receive payment under the IB Plan based on any revenue amount that is recognized by the Company on or before your last day of employment with the Company. You cannot earn incentive compensation under this IB Plan after your employment with the Company terminates for any reason.

 

The IB Plan provides incentive compensation for achieving recognized revenue targets within three components:

 

 

(A)

Company’s Annual Revenue Target (“CRT”)
 

(B)

Company’s Quarterly Revenue Target (“CQRT”)
 

(C)

Strategic Accounts License Agreements (“SA”)

 

For the purposes of the IB Plan, revenue amounts that are “recognized” means bookings that have been invoiced and recognized as revenue by the Company and paid after the end of an applicable quarter (or interim period ending on your termination of employment, if applicable) within 60 days. For purposes of this IB Plan, “bookings” means the Company has signed a deal with a customer, and such deal is not subject to any refund, chargeback, credit, or recoupment by the customer. In the event of any dispute, the Company’s formal, approved and legitimate booking records shall be dispositive evidence, and the determination of booking otherwise by the Company’s board of directors shall be binding absent manifest error.

 

1
 

 

CRT Compensation

 

1. Payment for achieving 100% CRT (subject to additional payment on multiplier): SEK 2,000,000

 

-

CRT for Calendar Year 2024 is: $[***]
 

-

Commission Rate: [***]
 

-

Commission Multiplier: Will be applied to the commission rate per the matrix below:

 

Actual Revenue as Percentage of the CRT

Commission Multiplier to be Applied

From 0 to 100%

1.0

From 100% and above

1.5

 

 

While CRT is based on the Company’s annual targets, the IB Plan payment is calculated on a quarterly basis, with annual targets calculated pro rata for each quarter.

 

CQRT Compensation

 

$6,000 payment each quarter based on achievement of the following CQRT:

 

 

i.

Q1       $[***]
 

ii.

Q2       $[***]
 

iii.

Q3       $[***]
 

iv.

Q4       $[***]

 

Strategic Accounts (SA) Compensation

 

 

1.

$6,000 for each new booking of license agreement with any company approved by the CEO and that meets the following pre-requisites:
 

-

License agreement includes an IP licensing fee of $[***] or above, excluding future or pre-paid royalties; and
 

-

Royalty revenue pricing is set at the lowest bracket of greater than $[***] per Ceva powered chip/device and for [***] products greater than $[***] per Ceva powered chip/device.

 

 

2.

$10,000 for each booking of IP licensing and/or services agreement that meets the following pre-requisites:
 

-

License fee and related fees of $[***] or above, excluding future royalties or pre-paid royalties; and
 

-

Royalty revenue pricing at the lowest bracket, of greater than $[***] per Ceva powered chip/device and for [***] products greater than $[***] per Ceva powered chip/device.

 

 

3.

$10,000 for achieving new aggregated booking of license agreements for [***] over $[***].

 

2
 

 

Note: No double counting or double payment will apply for the above Strategic Accounts Compensation section.

 

Any booking must be approved by the Company in questionable deals, i.e., deals in which payment is not made per the applicable license agreement, changes are made to a deal, deal termination occurs, or other non-standard deal terms apply.

 

 

 

 

 

*         *         *

 

 

 

I have read and understand the 2024 Incentive Bonus Plan. I have received a copy of the plan for my record. I accept the terms and conditions of the IB Plan as outlined above and agree that my incentive compensation will be determined according to these terms and conditions.

 

 

 

/s/ Gweltaz Toquet   February 13, 2024
Gweltaz Toquet, CCO   Date
     
/s/ Amir Panush   February 15, 2024
Amir Panush, CEO   Date

 

 

 

 

CC:

Finance

HR, Employee File

 

3
v3.24.0.1
Document And Entity Information
Feb. 12, 2024
Document Information [Line Items]  
Entity, Registrant Name CEVA, INC.
Document, Type 8-K
Document, Period End Date Feb. 12, 2024
Entity, Incorporation, State or Country Code DE
Entity, File Number 000-49842
Entity, Tax Identification Number 77-0556376
Entity, Address, Address Line One 15245 Shady Grove Road, Suite 400
Entity, Address, City or Town Rockville
Entity, Address, State or Province MD
Entity, Address, Postal Zip Code 20850
City Area Code 240
Local Phone Number 308-8328
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock
Trading Symbol CEVA
Security Exchange Name NASDAQ
Entity, Emerging Growth Company false
Amendment Flag false
Entity, Central Index Key 0001173489
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