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 | |