Delaware
|
77-0556376
|
(State
or Other Jurisdiction of Incorporation or
Organization)
|
(I.R.S.
Employer Identification No.)
|
2033
Gateway Place, Suite 150, San Jose, California
|
95110-1002
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
|
Page
|
PART I. FINANCIAL
INFORMATION
|
|
Item 1.
Financial Statements (Unaudited)
|
4
|
Interim
Condensed Consolidated Balance Sheets at September 30, 2005 and December
31, 2004
|
4
|
Interim
Condensed Consolidated Statements of Operations for the three and
nine
months ended September 30, 2005 and 2004
|
5
|
Interim
Statements of Changes in Stockholders’ Equity for the nine months ended
September 30, 2005 and 2004
|
6
|
Interim
Condensed Consolidated Statements of Cash Flows for the nine months
ended
September 30, 2005 and 2004
|
7
|
Notes
to the Interim Condensed Consolidated Financial Statements
|
8
|
Item 2.
Management’s Discussion and Analysis of Financial
Condition and Results of Operations
|
13
|
Item 3.
Quantitative and Qualitative Disclosures
About
Market Risk
|
27
|
Item 4.
Controls and Procedures
|
27
|
PART II.
OTHER INFORMATION
|
|
Item 1.
Legal Proceedings
|
28
|
Item
4. Submission of
Matters to a Vote of
Security Holders
|
28
|
Item 6.
Exhibits
|
29
|
SIGNATURES
|
30
|
September
30,
2005
|
December
31,
2004
|
||||||
Unaudited
|
Audited
|
||||||
ASSETS
|
|||||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
24,492
|
$
|
28,844
|
|||
Bank
deposits
|
8,255
|
-
|
|||||
Marketable
securities and deposits
|
27,665
|
30,794
|
|||||
Trade
receivables, net
|
7,331
|
10,835
|
|||||
Prepaid
expenses
|
1,378
|
703
|
|||||
Other
current assets
|
2,044
|
772
|
|||||
Total
current assets
|
71,165
|
71,948
|
|||||
Severance
pay fund
|
1,808
|
1,713
|
|||||
Deferred
tax assets
|
57
|
70
|
|||||
Property
and equipment, net
|
3,642
|
4,471
|
|||||
Goodwill
|
38,398
|
38,398
|
|||||
Other
intangible assets, net
|
1,651
|
2,563
|
|||||
Total
assets
|
$
|
116,721
|
$
|
119,163
|
|||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
Current
liabilities:
|
|||||||
Trade
payables
|
$
|
575
|
$
|
1,714
|
|||
Accrued
expenses and other payables
|
9,730
|
9,816
|
|||||
Taxes
payable
|
589
|
707
|
|||||
Deferred
revenues
|
1,234
|
1,751
|
|||||
Total
current liabilities
|
12,128
|
13,988
|
|||||
Long
term liabilities:
|
|||||||
Accrued
severance pay
|
2,023
|
1,844
|
|||||
Accrued
liabilities
|
190
|
782
|
|||||
Total
long-term liabilities
|
2,213
|
2,626
|
|||||
Stockholders’
equity:
|
|||||||
Common
Stock:
|
|||||||
$0.001
par value: 100,000,000 shares authorized; 18,923,071 and 18,557,818
shares
issued and outstanding at September 30, 2005 and December 31, 2004,
respectively
|
19
|
19
|
|||||
Additional
paid in-capital
|
138,818
|
136,868
|
|||||
Accumulated
deficit
|
(36,457
|
)
|
(34,338
|
)
|
|||
Total
stockholders’ equity
|
102,380
|
102,549
|
|||||
Total
liabilities and stockholders’ equity
|
$
|
116,721
|
$
|
119,163
|
Nine
months ended
September
30,
|
Three
months ended
September
30,
|
||||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
||||||||||
Revenues:
|
|||||||||||||
Licensing
and royalties
|
$
|
24,235
|
$
|
24,431
|
$
|
7,169
|
$
|
8,482
|
|||||
Other
revenue
|
3,720
|
4,073
|
1,217
|
1,232
|
|||||||||
Total
revenues
|
27,955
|
28,504
|
8,386
|
9,714
|
|||||||||
Cost
of revenues
|
3,412
|
4,160
|
1,003
|
1,199
|
|||||||||
Gross
profit
|
24,543
|
24,344
|
7,383
|
8,515
|
|||||||||
Operating
expenses:
|
|||||||||||||
Research
and development, net
|
15,477
|
12,615
|
5,036
|
4,384
|
|||||||||
Sales
and marketing
|
4,855
|
5,159
|
1,619
|
1,768
|
|||||||||
General
and administrative
|
4,481
|
4,509
|
1,399
|
1,555
|
|||||||||
Amortization
of intangible assets
|
632
|
669
|
191
|
223
|
|||||||||
Reorganization
and severance charge
|
3,307
|
-
|
1,650
|
-
|
|||||||||
Impairment
of assets
|
510
|
-
|
-
|
-
|
|||||||||
Total
operating expenses
|
29,262
|
22,952
|
9,895
|
7,930
|
|||||||||
Operating
income (loss)
|
(4,719
|
)
|
1,392
|
(2,512
|
)
|
585
|
|||||||
Other
income, net
|
2,760
|
496
|
1,982
|
145
|
|||||||||
Income
(loss) before taxes on income
|
(1,959
|
)
|
1,888
|
(530
|
)
|
730
|
|||||||
Taxes
on income
|
160
|
425
|
-
|
170
|
|||||||||
Net
income (loss)
|
$
|
(2,119
|
)
|
$
|
1,463
|
$
|
(530
|
)
|
$
|
560
|
|||
Basic
net income (loss) per share
|
$
|
(0.11
|
)
|
$
|
0.08
|
$
|
(0.03
|
)
|
$
|
0.03
|
|||
Diluted
net income (loss) per share
|
$
|
(0.11
|
)
|
$
|
0.08
|
$
|
(0.03
|
)
|
$
|
0.03
|
|||
Weighted-average
number of shares of Common Stock used in computation of net income
(loss)
per share (in thousands):
|
|||||||||||||
Basic
|
18,768
|
18,387
|
18,875
|
18,453
|
|||||||||
Diluted
|
18,768
|
18,986
|
18,875
|
18,793
|
|||||||||
Common
stock
|
Additional
paid-in
capital
|
Accumulated
deficit
|
Total
stockholders’
equity
|
|||||||||||||
Nine
months ended September 30, 2005
|
Shares
|
Amount
|
||||||||||||||
Balance
as of January 1, 2005
|
18,557,818
|
$
|
19
|
$
|
136,868
|
$
|
(34,338
|
)
|
$
|
102,549
|
||||||
Net
loss
|
—
|
—
|
—
|
(2,119
|
)
|
(2,119
|
)
|
|||||||||
Stock-based
compensation
|
—
|
—
|
195
|
—
|
195
|
|||||||||||
Issuance
of Common Stock upon exercise of stock options
|
72,820
|
—(*
|
)
|
369
|
—
|
369
|
||||||||||
Issuance
of Common Stock upon purchase of ESPP shares
|
292,433
|
—
(*
|
)
|
1,386
|
—
|
1,386
|
||||||||||
Balance
as of September 30, 2005
|
18,923,071
|
$
|
19
|
$
|
138,818
|
$
|
(36,457
|
)
|
$
|
102,380
|
Nine
months ended
September
30,
|
|||||||
2005
|
2004
|
||||||
Unaudited
|
Unaudited
|
||||||
Cash
flows from operating activities:
|
|||||||
Net
income (loss)
|
$
|
(2,119
|
)
|
$
|
1,463
|
||
Adjustments
required to reconcile net income to net cash provided by (used in)
operating activities:
|
|||||||
Depreciation
|
1,545
|
1,972
|
|||||
Amortization
of intangible assets
|
1,032
|
669
|
|||||
Stock-based
compensation
|
195
|
182
|
|||||
Gain
on disposal of property and equipment
|
(10
|
)
|
(7
|
)
|
|||
Unrealized
loss on marketable securities
|
57
|
—
|
|||||
Currency
translation differences
|
(78
|
)
|
(8
|
)
|
|||
Gain
on realization of investment
|
(1,507
|
)
|
—
|
||||
Marketable
securities
|
3,072
|
(30,730
|
)
|
||||
Accrued
Interest
|
(51 | ) |
—
|
||||
Changes
in operating assets and liabilities:
|
|||||||
Trade
receivables
|
3,357
|
(1,365
|
)
|
||||
Other
current assets and prepaid expenses
|
(1,781
|
)
|
339
|
||||
Deferred
income taxes
|
20
|
—
|
|||||
Trade
payables
|
(926
|
)
|
(311
|
)
|
|||
Deferred
revenues
|
(517
|
)
|
(18
|
)
|
|||
Accrued
expenses and other payables
|
5
|
(3,534
|
)
|
||||
Taxes
payable
|
(118
|
)
|
74
|
||||
Accrued
severance pay, net
|
84
|
52
|
|||||
Net
cash provided by (used in) operating activities
|
2,260
|
(31,222
|
)
|
||||
Cash
flows from investing activities:
|
|||||||
Purchase
of property and equipment
|
(829
|
)
|
(2,725
|
)
|
|||
Proceeds
from sale of property and equipment
|
13
|
49
|
|||||
Investment
in deposits
|
(8,204
|
)
|
—
|
||||
Proceeds
from realization of investment
|
1,267
|
—
|
|||||
Purchase
of technology
|
(153
|
)
|
(30
|
)
|
|||
Net
cash used in investing activities
|
(7,906
|
)
|
(2,706
|
)
|
|||
Cash
flows from financing activities:
|
|||||||
Proceeds
from issuance of Common Stock upon exercise of options
|
369
|
1,115
|
|||||
Proceeds
from issuance of Common Stock under employee stock purchase
plan
|
1,386
|
774
|
|||||
Net
cash provided by financing activities
|
1,755
|
1,889
|
|||||
Effect
of exchange rate movements on cash
|
(461
|
)
|
(56
|
)
|
|||
Changes
in cash and cash equivalents
|
(4,352
|
)
|
(32,095
|
)
|
|||
Cash
and cash equivalents at the beginning of the period
|
28,844
|
59,130
|
|||||
Cash
and cash equivalents at the end of the period
|
$
|
24,492
|
$
|
27,035
|
|||
Non Cash Acitivity: | |||||||
Other
current assets in respect of realization of investment
|
$ | 240 | $ |
—
|
Nine
months ended
September
30,
|
Three
months ended
September
30,
|
||||||||||||
2005
(unaudited)
|
2004
(unaudited)
|
2005
(unaudited)
|
2004
(unaudited)
|
||||||||||
Revenues
based on customer location:
|
|||||||||||||
United
States
|
$
|
10,654
|
$
|
7,342
|
$
|
2,444
|
$
|
4,160
|
|||||
Europe,
Middle East and Africa
|
5,579
|
13,420
|
1,484
|
3,587
|
|||||||||
Asia
(1)
|
11,722
|
7,742
|
4,458
|
1,967
|
|||||||||
|
$
|
27,955
|
$
|
28,504
|
$
|
8,386
|
$
|
9,714
|
(1)
Japan
|
$
|
4,357
|
$
|
4,391
|
$
|
1,118
|
$
|
1,443
|
Nine
months ended
September
30,
|
Three
months ended
September
30,
|
||||||||||||
2005
(unaudited)
|
2004
(unaudited)
|
2005
(unaudited)
|
2004
(unaudited)
|
||||||||||
Customer
A
|
13
|
%
|
—
|
—
|
—
|
||||||||
Customer
B
|
—
|
—
|
19
|
%
|
—
|
||||||||
Customer
C
|
—
|
—
|
18
|
%
|
—
|
||||||||
Customer
D
|
—
|
—
|
16
|
%
|
—
|
||||||||
Customer
E
|
—
|
12
|
%
|
—
|
—
|
||||||||
Customer
F
|
—
|
—
|
—
|
22
|
%
|
Nine
months ended
September
30,
|
Three
months ended
September
30,
|
||||||||||||
2005
(unaudited)
|
2004
(unaudited)
|
2005
(unaudited)
|
2004
(unaudited)
|
||||||||||
Numerator:
|
|||||||||||||
Numerator
for basic and diluted net income (loss) per share
|
$
|
(2,119
|
)
|
$
|
1,463
|
$
|
(530
|
)
|
$
|
560
|
|||
Denominator:
|
|||||||||||||
Denominator
for basic net income (loss) per share
|
|||||||||||||
Weighted-average
number of shares of Common Stock
|
18,768
|
18,387
|
18,875
|
18,453
|
|||||||||
Effect
of employee stock options
|
-
|
599
|
-
|
340
|
|||||||||
|
18,768
|
18,986
|
18,875
|
18,793
|
|||||||||
Net
income (loss) per share
|
|||||||||||||
Basic
|
$
|
(0.11
|
)
|
$
|
0.08
|
$
|
(0.03
|
)
|
$
|
0.03
|
|||
Diluted
|
$
|
(0.11
|
)
|
$
|
0.08
|
$
|
(0.03
|
)
|
$
|
0.03
|
As
at September 30, 2005
|
||||||||||
Cost
(unaudited)
|
Unrealized
Loss
(unaudited)
|
Market
Value
(unaudited)
|
||||||||
U.S.
government and agency securities
|
$
|
35,876
|
$
|
(7
|
)
|
$
|
35,869
|
Three
and nine months ended
September
30,
|
|||||||
2005
(unaudited)
|
2004
(unaudited)
|
||||||
Dividend
yield
|
0
|
%
|
0
|
%
|
|||
Expected
volatility
|
34-39
|
%
|
51-80
|
%
|
|||
Risk-free
interest rate
|
2
|
%
|
2
|
%
|
|||
Expected
life
|
3-4
Years
|
4
Years
|
Nine
months ended
September
30,
|
Three
months ended
September
30,
|
||||||||||||
2005
(unaudited)
|
2004
(unaudited)
|
2005
(unaudited)
|
2004
(unaudited)
|
||||||||||
Net
income (loss) as reported
|
$
|
(2,119
|
)
|
$
|
1,463
|
$
|
(530
|
)
|
$
|
560
|
|||
Add
(deduct): Total stock-based employee compensation credit (expense)
determined under fair value based method for all awards, net of related
tax effects
|
(1,959
|
)
|
(7,979
|
)
|
(1,040
|
)
|
(2,157
|
)
|
|||||
Pro
forma net (loss)
|
$
|
(4,078
|
)
|
$
|
(6,516
|
)
|
$
|
(1,570
|
)
|
$
|
(1,597
|
)
|
|
Net
income (loss) per share:
|
|||||||||||||
Basic
as reported
|
$
|
(0.11
|
)
|
$
|
0.08
|
$
|
(0.03
|
)
|
$
|
0.03
|
|||
Basic
pro forma
|
$
|
(0.22
|
)
|
$
|
(0.35
|
)
|
$
|
(0.08
|
)
|
$
|
(0.09
|
)
|
|
Diluted
as reported
|
$
|
(0.11
|
)
|
$
|
0.08
|
$
|
(0.03
|
)
|
$
|
0.03
|
|||
Diluted
pro forma
|
$
|
(0.22
|
)
|
$
|
(0.35
|
)
|
$
|
(0.08
|
)
|
$
|
(0.09
|
)
|
Severance
and
related
costs
(unaudited)
|
Provision
for
future
operating
lease
charges
on
idle
facilities
(unaudited)
|
Legal
and
professional
fees
(unaudited)
|
Total
(unaudited)
|
||||||||||
Balance
as of December 31, 2004
|
$
|
855
|
$
|
2,211
|
$
|
-
|
$
|
3,066
|
|||||
Charge,
net
|
970
|
2,146
|
191
|
3,307
|
|||||||||
Non-cash
stock compensation charge
|
(117
|
)
|
-
|
-
|
(117
|
)
|
|||||||
Cash
outlays
|
(1,455
|
)
|
(1,163
|
)
|
(106
|
)
|
(2,724
|
)
|
|||||
Balance
as of September 30, 2005
|
$
|
253
|
$
|
3,194
|
$
|
85
|
$
|
3,532
|
Nine
Months
2004
|
Nine
Months
2005
|
Third
Quarter
2004
|
Third
Quarter
2005
|
||||||||||
Licensing
and royalty revenues (in millions)
|
$
|
24.4
|
$
|
24.2
|
$
|
8.5
|
$
|
7.2
|
|||||
of
which:
|
|||||||||||||
Licensing
revenues (in millions)
|
$
|
20.4
|
$
|
19.4
|
$
|
6.9
|
$
|
5.7
|
|||||
Royalty
revenues (in millions)
|
$
|
4.0
|
$
|
4.9
|
$
|
1.6
|
$
|
1.5
|
First
Nine Months
2004
|
First
Nine Months
2005
|
Third
Quarter
2004
|
Third
Quarter
2005
|
||||||||||||||||||||||
(in
millions, except percentages)
|
|||||||||||||||||||||||||
United
States
|
$
|
7.4
|
26
|
%
|
$
|
10.7
|
38
|
%
|
$
|
4.2
|
43
|
%
|
$
|
2.4
|
29
|
%
|
|||||||||
Europe,
Middle East, Africa
|
$
|
13.4
|
47
|
%
|
$
|
5.6
|
20
|
%
|
$
|
3.5
|
37
|
%
|
$
|
1.5
|
18
|
%
|
|||||||||
Asia
|
$
|
7.7
|
27
|
%
|
$
|
11.7
|
42
|
%
|
$
|
2.0
|
20
|
%
|
$
|
4.5
|
53
|
%
|
First
nine months
2004
|
First
nine months
2005
|
Third
Quarter
2004
|
Third
Quarter
2005
|
||||||||||
Interest
and other income, net (in millions)
|
$
|
0.50
|
$
|
2.76
|
$
|
0.15
|
$
|
1.98
|
|||||
of
which:
|
|||||||||||||
Interest
income (in millions)
|
$
|
0.51
|
$
|
1.15
|
$
|
0.17
|
$
|
0.47
|
|||||
Foreign
exchange gains (in millions)
|
$
|
(0.01
|
)
|
$
|
0.10
|
$
|
(0.02
|
)
|
$
|
0.00
|
|||
Gain
on realization of investment (in millions)
|
$
|
-
|
$
|
1.51
|
$
|
-
|
$
|
1.51
|
Ÿ |
Revenue
Recognition
|
Ÿ |
Allowances
for Doubtful Accounts
|
Ÿ |
Accounting
for Income Taxes
|
Ÿ |
Goodwill
|
Ÿ |
Other
Intangible Assets
|
Ÿ |
Reorganization,
Restructuring and Severance Charge
|
Ÿ |
Foreign
Currency
|
Ÿ |
significant
underperformance relative to expected historical or projected future
operating results;
|
Ÿ |
significant
changes in the manner of our use of the acquired assets or the strategy
for our overall business;
|
Ÿ |
significant
negative industry or economic
trends;
|
Ÿ |
significant
decline in our stock price for a sustained period;
and
|
Ÿ |
significant
decline in our market capitalization relative to net book
value.
|
Ÿ |
the
timing of the introduction of new or enhanced technologies, as well
as the
market acceptance of such
technologies;
|
Ÿ |
new
product announcements and introductions by
competitors;
|
Ÿ |
the
timing and volume of orders and production by our customers, as well
as
fluctuations in royalty revenues resulting from fluctuations in unit
shipments by our licensees;
|
Ÿ |
our
lengthy sales cycle;
|
Ÿ |
the
gain or loss of significant
licensees;
|
Ÿ |
changes
in our pricing policies and those of our competitors;
and
|
Ÿ |
restructuring,
asset impairment and related
charges.
|
· |
set
up procedures to ensure that a comprehensive review of all past
and future
agreements is undertaken when we are entering into a new revenue
generating agreement with a customer where we have an existing
relationship with this party such as an existing customer, supplier
or
service provider relationship;
|
· |
retained
a third-party accounting firm to consult on complicated technical
accounting issues; and
|
· |
ensured
that our accounting and finance personnel have attended U.S. GAAP
courses
on revenue recognition policies.
|
For
|
Withheld
|
|
Eliyahu Ayalon |
12,905,012
|
476,293
|
Brian Long |
12,831,687
|
549,618
|
Zimon Limon |
13,157,240
|
224,065
|
Bruce A. Mann |
12,720,281
|
661,024
|
Peter McManaman |
12,905,099
|
476,206
|
Sven-Christer Nillsson |
13,131,013
|
250,292
|
Louis Silver |
13,100,696
|
280,609
|
Dan Tocalty |
13,229,793
|
151,512
|
For 13,326,746
|
Against 4,505
|
Abstained 50,054
|
For 13,352,692
|
Against 3,989
|
Abstained 24,624
|
CEVA,
INC.
|
|
Date:
November 9
,
2005
|
By: /s/ GIDEON
WERTHEIZER
|
|
Gideon
Wertheizer
Chief
Executive Officer
(principal
executive officer)
|
Date:
November 9
,
2005
|
By: /s/ YANIV
ARIELI
|
|
Yaniv
Arieli
Chief
Financial Officer
(principal
financial officer and principal accounting
officer)
|
Exhibit
No.
|
Description
|
10.1
|
Employment
Agreement between the Registrant and Yaniv Arieli dated as of August
18,
2005
|
31.1
|
Rule
13a-14(a)/15d-14(a) Certification of Chief Executive
Officer
|
31.2
|
Rule
13a-14(a)/15d-14(a) Certification of Chief Financial
Officer
|
32
|
Section
1350 Certification of Chief Executive Officer and Chief Financial
Officer
|
1. |
Salary
and Overtime Pay
|
a. |
As
compensation for your performance, the Company shall pay you a
basic gross
annual salary of 126,000 USD (the “
Salary
”),
which shall be paid in NIS according to the exchange rate of the
USD at
the day of the payment.
|
b. |
In
addition to the Salary, you shall be paid annually, the gross amount
of
14,000 USD, which shall be paid in NIS according to the exchange
rate of
the USD at the day of the payment, as global consideration for
any
overtime you may work beyond the Company customary working hours
for
employees of your position, and this, irrespective of the actual
overtime
worked (the "
Overtime
Pay
").
|
c. |
The
above-mentioned Salary and Overtime Pay includes a cost-of-living
supplement based on the cost of living index most recently published
prior
to the date of this Agreement, and shall be updated in accordance
with the
adjustments applicable by the law from time to time.
|
2. |
Employment
Period and Termination
Thereof
|
2.1 |
Your
employment with the Company shall commence on the date specified
in the
Special Agreement, and shall not be limited in time.
|
2.2 |
In
the event that the duration of your employment with the Company
shall
exceed a period of three (3) months, your employment may be terminated
by
either party at any time for any reason pursuant to the delivery
of 6
months prior written notice by the terminating party (the “
Notice
Period
”).
|
2.3 |
The
provisions of Section 3 of Appendix "A" attached hereto shall apply
to the
terms of termination of your
employment.
|
3. |
Company
Car
|
You
shall be entitled to a Company car in accordance with the Company’s
internal policies. The Company shall bear all expenses relating
to the use
and maintenance of the car, excluding taxes imposed on you as a
result of
the car being placed at your disposal pursuant to the instructions
of the
Israeli tax authorities and excluding fines and/or parking
tickets.
|
5.1 |
Within
the framework of the Company policy, the Company shall allocate
to a
Managers Insurance Policy or to a Pension Fund (the “
Insurance
Fund
”),
according to your choice, which shall remain property of the Company,
an
aggregated amount equal to thirteen and a third percent (13.33%)
in the
following portions; five percent (5%) of the Salary and the Overtime
Pay
for pension compensation and eight and a third percent (8.33%)
of the
Salary and the Overtime Pay to severance compensation. The Company
shall
deduct from the Salary an aggregated amount equal to five percent
(5%) of
the Salary and the Overtime Pay for the Insurance Fund.
|
In
addition, the company shall allocate money for disability insurance
in
accordance with the company’s accepted
policies.
|
5.2 |
The
aforementioned allocations shall be on account of severance pay
according
to the Severance Pay Law 5723-1963 (the “
Severance
Pay Law
”),
if you are entitled to same.
|
5.3 |
In
the event that the Company terminates your employment, the Company
shall
release the monies accumulated on your behalf in the Insurance
Fund,
unless you are not eligible to severance pay under the provisions
of the
Severance Pay Law and/or you are in breach of your fiduciary duty,
including but not limited to a commission of a felonious crime
that is
connected with your employment and/or you are in breach of Section
3.4 of
Appendix "A" attached hereto and/or you are in breach of your obligations
re confidentiality, non-competition and intellectual property,
as defined
in Section 4 of Appendix "A" attached
hereto.
|
5.4
|
Notwithstanding
the provisions of clause 5.3 above, it is hereby clarified that
in the
event of your resignation from the Company, the Company shall release
the
monies accumulated on your behalf in the pension component ("tagmulim")
within the Insurance Fund (employee's and employer's
contributions
(
,
and shall consider, at its sole discretion releasing to you the
monies
accumulated on your behalf in the severance component within the
Insurance
Fund, notwithstanding the fact that the Company is not obliged
to do so,
and in consideration with the circumstances in which your employment
was
terminated.
|
8.1 |
You
shall be entitled to an annual 23 working days paid vacation (the
"
Annual
Vacation
").
|
8.2 |
You
will coordinate any vacation of more than 3 days at least one month
in
advance with your supervisor.
|
8.3 |
It
is hereby expressed that you must make every effort to exercise
your
Annual Vacation; however, if you are unable to utilize all the
vacation
days, you shall be entitled to accumulate the unused balance of
the
vacation days standing to your credit up to a ceiling of double
the number
of annual vacation days that you are entitled to accumulate according
to
Israeli Law (the “
Ceiling
"),
provided that you take at least seven consecutive annual working
days
vacation.
|
8.4 |
If
you accumulate vacation days exceeding the Ceiling, the balance
shall be
redeemed at the beginning of each calendar
year.
|
8.5 |
The
Company may instruct you to use your Annual Vacation, in the event
that
Company employees are sent by the Company on an organized vacation.
|
Name: | Nurit Doron | |
Position: | VP Human Resources | |
Address: | 2 Hamaskit St., Herzlia |
Signature:
|
|
______________________________
|
Employee's
name:
|
|
______________________________
|
Identity
number:
|
|
______________________________
|
Identity
number:
|
|
______________________________
|
Address:
|
|
______________________________
|
Date:
|
______________________________
|
1.1 |
This
agreement constitutes an integral part of the personal and special
employment agreement dated August 18
th
2005 between Yaniv Arieli (the “
Employee
”)
and Ceva DSP Ltd. (the “
Company
”)
(the “
Special
Agreement
"),
and wherever reference is made to this “Agreement”, the meaning is this
agreement and the Special Agreement.
|
1.2 |
Unless
otherwise provided in this Agreement, the provisions of any collective
agreement (“Heskem Kibutsi”), collective arrangement (“Hesder Kibutsi”) or
other custom of any kind shall not apply, unless otherwise determined
by
applicable law.
|
1.3 |
The
Employee warrants, confirms and undertakes that he is entitled to
enter
into this Agreement and to assume all the obligations pursuant hereto,
that there is no contractual or other impediment to his entering
into this
Agreement.
|
1.4 |
The
Employee hereby warrants that he has no medical or other problems
which
might prevent him from performing his obligations to work for the
Company.
The Employee shall notify the Company of any change in his state
of
health.
|
2.1 |
During
the employment period with the Company, the Employee shall honestly,
diligently, skillfully and faithfully serve the Company. The Employee
undertakes to devote all his working time, efforts and the best of
his
qualifications and skill to promoting the business and affairs of
the
Company, to comply with the policy and working arrangements of the
Company, to loyally and fully comply with the decisions of the Company,
its management and his supervisors.
|
2.2 |
The
Employee shall not, without the prior written authorization of the
Company, directly or indirectly undertake any other employment, whether
as
an employee of another employer or independently as an agent or consultant
or in any other manner (whether for compensation or otherwise), and
shall
not assume any position or render services in any of the above-stated
manners to any other entity.
|
2.3 |
The
Employee undertakes to notify the Company immediately and without
delay of
any matter or subject in respect of which he has a personal interest
and/or which might create a conflict of interests with his position
in the
Company.
|
3.1 |
During
the Notice Period as described in Section 2 of the Special Agreement,
the
Employee shall continue to render services to the Company until the
termination of the Notice Period. Nevertheless, the Company shall
have the
right not to take advantage of the full Notice Period and may even
terminate the employment at any time during the Notice Period. In
the
event of such termination, the Company shall pay the Employee his
Salary
and Overtime Pay for the remainder of the Notice
Period.
|
For
the avoidance of any doubt, it is hereby expressed that the Company
reserves this right in both the event the notice of termination
of
employment was delivered by it or in the event that it was delivered
by
the
Employee,
and the latter case shall not constitute a dismissal of employment
by the
Company
|
3.2 |
Notwithstanding
the
foregoing, the Company may terminate the employment without the delivery
of a prior written notice
,
in
the event that The employee is not eligible to severance pay under
the
provisions of the Severance Pay Law and/or is in breach of his fiduciary
duty, including but not limited to a commission of a felonious crime
connected with his employment and/or he is in breach of his undertakings
according to Section 3.4 henceforth and/or he is in breach of his
obligations re confidentiality, non-competition and intellectual
property,
as defined in Section 4 henceforth.
|
3.3 |
In
the event that the Employee terminated his employment with the Company,
for any reason, without the delivery of a prior written notice, the
Company is entitled to deduct from any debt which it owes the Employee
an
amount equal to the salary that would have been due to the Employee
for
the Notice Period during which he should have worked pursuant hereto,
had
he worked.
|
3.4 |
The
Employee undertakes that immediately upon the termination of his
employment with the Company, for any reason, he shall act as
follows:
|
3.4.1 |
he
shall deliver and/or return to the Company all the documents, diskettes
or
other magnetic media, letters, notes, reports and other papers in
his
possession and relating to his employment with the Company, as well
as any
equipment and/or other property belonging to the Company which was
placed
at his disposal;
|
3.4.2 |
he
shall delete any information relating to the Company or its business
from
his personal computer, if any;
|
3.4.3 |
he
shall coordinate his resignation with his supervisors, including
the
orderly handing over of his position according to the timetable determined
by his supervisors, and he shall hand over in an orderly fashion
and in
accordance with the Company procedures his position, the documents
and all
the other matters dealt with by him to whomever the Company instructs,
and
all to the satisfaction of the Company.
|
4.
|
Confidentiality,
Non-Competition/Non-solicitation and Intellectual
Property
|
4.1 |
Confidentiality
|
4.1.1 |
The
Employee undertakes to keep the secrets of the Company, including
its
affiliates, subsidiaries, successors, related corporation and parent
company, Ceva DSP Inc. and its subsidiaries, now or hereafter existing
(for the purpose of this Section 4.1 and 4.2 and 4.4 the “
Company
”),
during the term of his employment with the Company and after the
termination of such employment, for any reason.
|
4.1.2 |
Without
derogating from the generality of the foregoing, the Employee hereby
agrees that he shall not, directly or indirectly, disclose or transfer
to
any person or entity, at any time, either during or subsequent to
the
employment period, any trade secrets or other confidential information,
whether patentable or not, of the Company, including but not limited
to,
any (i) processes, formulas, trade secrets, innovations, inventions,
discoveries, improvements, research or development and test results,
survey, specifications, data and know-how; (ii) marketing plans,
business
plans, strategies, forecasts, unpublished financial information,
budgets,
projections, product plans and pricing; (iii) personnel information,
including organizational structure, salary, and qualifications of
employees; (iv) customer and supplier information, including identities,
product sales and purchase history or forecasts and agreements; and
(v)
any other information which is not known to the public (collectively,
“
Confidential
Information
”),
of which the Employee is or becomes informed or aware during the
employment period, whether or not developed by the
Employee.
|
4.1.3 |
The
Employee undertakes not to give and/or transfer, directly or indirectly,
to any person or entity, any material and/or raw material and/or
product
and/or part of a product and/or model and/or document and/or diskette
and/or other information storage media and/or photocopied and/or
printed
and/or duplicated object containing any or all of the Confidential
Information.
|
4.1.4 |
The
Employee undertakes not to make any use, including duplication,
production, sale, transfer, imitation and distribution, of all or
any of
the Confidential Information, without the prior written consent of
the
Company.
|
4.1.5 |
In
the event the Employee is in breach of any of his above obligations,
he
shall be liable to compensate the Company in respect of all damages
and/or
expenses incurred by the Company as a result of such breach, including
trial costs and legal fees and statutory VAT, and such being without
derogating from any other relief and/or remedy available to the Company
by
virtue of any law.
|
4.2 |
Non-Competition/
Non-Solicitation
|
4.2.1 |
The
Employee undertakes that during the period of his employment with
the
Company and for a period of twelve (12) months from the termination
of his
employment therewith, for any reason, he shall not, anywhere in the
world,
do business as an employee, independent contractor, consultant or
otherwise, and shall not directly or indirectly participate in or
accept
any position, proposal or job offer that may directly or indirectly
compete with or harm the Company, or in the field in which the Company
engages, is engaged or is about to engage (the “Competitive Occupation").
|
4.2.2 |
Without
derogating from the generality of the foregoing, the Employee undertakes
not to maintain any business relations of any type whatsoever, including
a
proposal to conduct business relations, directly or indirectly, with
any
of the Company's customers and/or suppliers and/or agents, including
customers and/or suppliers and/or agents with whom the Company conducted
negotiations towards an agreement at the time of the termination
of his
employment with the Company or prior thereto. In addition, the Employee
undertakes not to approach and/or solicit and/or recruit any employee
of
the Company to leave the Company for a period of eighteen (18) months
from
the date of the termination of the employment relationship.
|
4.2.3 |
The
foregoing shall apply irrespective of whether the Competitive Occupation
is carried out by the Employee alone or in cooperation with others
and
shall apply to the participation of the Employee in a Competitive
Occupation, whether as a controlling shareholder or as an interested
party.
|
4.2.4 |
For
the avoidance of any doubt, the Employee hereby declares that his
obligations and declarations according to this Section 4.2 do not
limit
his occupation with any other entity whatsoever, and they are solely
intended to safeguard the legitimate interests of the Company in
light of
his position in the Company, and in light of the Confidential Information
to which he has been and/or will be exposed during the course of
his
employment.
|
4.3 |
Intellectual
Property, Copyright and
Patents
|
4.3.1 |
The
Employee hereby assigns to the Company, all of the Employee’s rights,
title and interest in and to all inventions, trade secrets, professional
secrets, innovations, copyrightable works, Confidential Information,
discoveries, processes, designs, works of authorship, and other
intellectual property and all improvements on existing inventions,
discoveries, processes, designs, works and other intellectual property
made or discovered by the Employee or any person subordinate to
him during
the term of employment or as a result of such employment with the
Company,
for no additional consideration provided that he shall not be required
to
bear any expenses as a result of such assignment. The Company and
its
successors shall be entitled to protect any invention and/or patent
and/or
trade secret and/or professional secret and/or innovation as aforesaid
by
way of registration and/or in any other manner, in Israel or anywhere
else.
|
4.3.2 |
The
Employee undertakes that upon the demand of the Company, including
after
the termination of his employment for any reason, he shall sign,
execute
and deliver to the Company such documents as the Company may request
to
confirm the assignment of the Employee’s rights herein, and if requested
by the Company, shall assist the Company, and shall execute any
necessary
documents, at the Company’s expense, in applying for and prosecuting any
patents, trademarks, trade secrets or copyright registration which
may be
available in respect thereof in accordance with the laws of the
State of
Israel or any other foreign country.
|
4.3.3 |
The
Employee undertakes to deliver to the Company, written notice of
any
invention and/or patent and/or commercial secret and/or innovation
invented by him and/or employees of the Company and/or its successors
who
are subordinate to him, immediately upon the discovery
thereof.
|
4.3.4 |
The
Employee's obligations pursuant to this Section shall survive the
termination of his employment with the Company and/or its successors
and
assigns with respect to inventions conceived by him during the
term of his
employment or as a result of his employment with the
Company.
|
4.4 |
Employee
acknowledges that the restricted period of time and geographical
area
specified hereunder are reasonable, in view of the nature of the
business
in which the Company is engaged, the Employee’s knowledge of the Company’s
business and the compensation he receives. Notwithstanding anything
contained herein to the contrary, if the period of time or the
geographical area specified herein should be determined to be unreasonable
in any judicial proceeding, then the period of time and area of
the
restriction shall be reduced so that this Agreement may be enforced
in
such area and during such period of time as shall be determined
to be
reasonable by such judicial proceeding. The Employee acknowledges
that the
compensation and benefits granted to him by the Company under this
Agreement were determined, inter alia, in consideration for his
obligations under this Section
4.
|
5.1 |
The
Employee shall bear all the taxes deriving from the rights and benefits
received by him pursuant hereto. It is hereby expressed that all
the
amounts specified in this contract are gross and statutory tax shall
be
deducted from them.
|
5.2 |
All
notices, requests, consents and other communications, required or
permitted to be given hereunder, shall be in writing and shall be
deemed
to have been duly given if delivered personally or sent by fax, or
mailed
first-class, postage prepaid, by registered or certified mail, to
the
addresses and fax numbers set forth in this Agreement (or to such
other
address and fax numbers as either party shall designate by notice
in
writing to the other in accordance herewith). Notices sent by fax
shall be
deemed to have been given upon transmission and electronic confirmation
of
receipt or (if transmitted and received on a non-business day) on
the
first business day following transmission and electronic confirmation
of
receipt, notices sent by mail shall be deemed to have been given
ninety-six (96) hours after
delivery.
|
5.3
|
This
Agreement is the entire agreement between the parties with respect
to the
subject matter hereof, and supersedes all prior understandings, agreements
and discussions between them, oral or
written.
|
Signature:
|
________________________________ | |
Employee’s
name:
|
________________________________ | |
Identity
number:
|
________________________________ | |
Date:
|
________________________________ |
1.
|
|
I
have reviewed this Quarterly Report on Form 10-Q of CEVA,
Inc. (the
“Company”);
|
2.
|
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such
statements
were made, not misleading with respect to the period covered by
this
report;
|
3.
|
|
Based
on my knowledge, the financial statements, and other financial
information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures
(as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
(a)
|
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including
its
consolidated subsidiaries, is made known to us by others within
those
entities, particularly during the period in which this report is
being
prepared;
|
(b)
|
Designed
such internal control over financial reporting, or caused such
internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
||
|
(c)
|
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
|
|
(d)
|
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting,
to
the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
|
(a)
|
|
All
significant deficiencies and material weaknesses in the design
or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
|
|
(b)
|
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
|
|
|
/s/ GIDEON WERTHEIZER | ||
Gideon Wertheizer |
||
Chief Executive Officer |
1.
|
|
I
have reviewed this Quarterly Report on Form 10-Q of CEVA,
Inc. (the
“Company”);
|
2.
|
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such
statements
were made, not misleading with respect to the period covered by
this
report;
|
3.
|
|
Based
on my knowledge, the financial statements, and other financial
information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures
(as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
(a)
|
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including
its
consolidated subsidiaries, is made known to us by others within
those
entities, particularly during the period in which this report is
being
prepared;
|
(b)
|
Designed
such internal control over financial reporting, or caused such
internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
||
|
(c)
|
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
|
|
(c)
|
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting,
to
the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
|
(a)
|
|
All
significant deficiencies and material weaknesses in the design
or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
|
|
(b)
|
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
|
|
|
/s/ YANIV ARIELI | ||
Yaniv Arieli |
||
Chief Financial Officer |
Date: November 9 , 2005 | ||
|
|
|
/s/ GIDEON WERTHEIZER | ||
Gideon
Wertheizer
|
||
Chief Executive Officer |
|
|
|
/s/ YANIV ARIELI | ||
Yaniv
Arieli
|
||
Chief
Financial Officer
|