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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 16, 2021
 
CEVA, INC.
(Exact Name of Registrant as Specified in Its Charter)
 
Delaware
(State or Other Jurisdiction of Incorporation)
 
000-49842
(Commission File Number)
77-0556376
(I.R.S. Employer Identification No.)
   
15245 Shady Grove Road, Suite 400, Rockville, MD
(Address of Principal Executive Offices)
20850
(Zip Code)
 
(240)-308-8328
(Registrant’s Telephone Number, Including Area Code)
 
 
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 (see General Instruction A.2. below):
 
☐     Written communications 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, $.001 per share
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 (§230.405 of this chapter) or Rule 12b-2 of the Security Exchange Act of 1934 (§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
 
2021 Executive Bonus Plan for Chief Executive Officer, Chief Financial Officer and Chief Operating Officer
 
On February 16, 2021, the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of CEVA, Inc. (the “Corporation”) approved a 2021 Executive Bonus Plan (the “2021 Executive Plan”), effective as of January 1, 2021, for Gideon Wertheizer, 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 2021 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 2021 Executive Plan are as follows:
 
Weighting
Financial Target
Threshold for Receipt of Bonus
Linear Calculation from 90% to 100% of Target
Linear Calculation from 100% to 110% of Target
50%
2021 revenue target approved by the Board (the “2021 Revenue Target”)
90% of 2021 Revenue Target
If the Corporation achieves 95% of the 2021 Revenue Target, 95% of the bonus amount, which is subject to a 40% weighting, would be payable
For both financial targets (i.e. the 2021 Revenue Target and 2021 EPS Target), if actual result exceeds 100% of the target, every 1% increase of the target, up to 110%, would result in an increase of 4% for Mr. Wertheizer and an increase of 2.5% for each of Messrs. Arieli and Boukaya.
50%
Specified 2021 non-GAAP earnings per share approved by the Board (the “2021 EPS Target”)
90% of 2021 EPS Target
If the Corporation achieves 95% of the 2021 EPS Target, 95% of the bonus amount, which is subject to a 40% weighting, would be payable
 
 
 
 
 
Under the 2021 Plan, the target annual cash incentive award opportunities for each of Messrs. Wertheizer, Arieli and Boukaya are established as a percentage of each such executive officer's base salary for 2021. The target and maximum award opportunities for Messrs. Wertheizer, Arieli and Boukaya for 2021 are as follows:
 
Named Executive Officer
 
Target Award
(as a percentage of base salary)
   
Maximum Award
(as a percentage of base salary)
 
Gideon Wertheizer
    70 %     110 %
Yaniv Arieli
    50 %     75 %
Michael Boukaya
    50 %     75 %
 
Payment of bonuses (if any) will be made in 2022. 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 2021 Revenue Target and 2021 EPS Target under the 2021 Executive Plan would cause future competitive harm to the Corporation and therefore are not disclosed.
 
The above is a description of the 2021 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.
 
2021 Incentive Bonus Plan for EVP, Worldwide Sales
 
On February 18, 2021, the Corporation entered into a 2021 Incentive Plan (the “Ohana 2021 Plan”) with Issachar Ohana, the Corporation’s Executive Vice President, Worldwide Sales, effective as of January 1, 2021.
 
 
 
 
In accordance with the Ohana 2021 Plan, his bonus is based on a formula using a specified 2021 annual revenue target multiplied by a specified commission rate. A commission multiplier of 1.0 is applied to the commission rate based on 0% to 100% achievement of the 2021 annual revenue target. A commission multiplier of 1.5 is applied to the commission rate based on the achievement of the 2021 annual revenue target beyond 100%. Mr. Ohana’s bonus based on the achievement of the 2021 annual revenue target is capped at $165,000. In addition, Mr. Ohana is eligible to receive an additional quarterly bonus of $5,000 each if specified quarterly revenue targets based on the 2021 annual revenue target are achieved. Furthermore, Mr. Ohana is eligible to receive an additional bonus of $6,000 each time he successfully executes a new license agreement meeting a certain predetermined royalty per chip and, in some cases, license fee threshold amount with a specified strategic customer. The 2021 strategic account bonus is capped at $30,000 if the Corporation fails to achieve the 2021 annual revenue target but Mr. Ohana would not be subject to any cap if the 2021 annual revenue target is achieved. The commission-based bonus is payable quarterly based on the criteria discussed above and is subject to payroll taxes and tax withholdings.
 
Due to their strategic significance, the Corporation believes that the disclosure of the 2021 annual revenue target, quarterly revenue targets, commission rate, information relating to the strategic customer accounts and the specified technologies and market industries targeted by the Corporation under the Ohana 2021 Plan would cause competitive harm to the Corporation and therefore are not disclosed.
 
The foregoing description of the Ohana 2021 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.
 
2021 Equity Award to the Corporation’s Executive Officers
 
On February 18, 2021, the Committee granted 5,962, 4,024, 3,577 and 3,577 time-based restricted stock units (“RSU”) to each of Messrs. Wertheizer, Ohana, Arieli and Boukaya pursuant to the Corporation’s 2012 Equity Incentive Plan (the “2012 Plan”). The RSU grants vest 33.4% on February 18, 2022, 33.3% on February 18, 2023 and 33.3% on February 18, 2024.
 
Also, on February 18, 2021, the Committee granted 8,943, 2,683, 2,385 and 2,385 performance-based stock units (“PSUs”) to each of Messrs. Wertheizer, Ohana, Arieli and Boukaya pursuant to 2012 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 2021 license and related revenue target approved by the Board (the “2021 License Revenue Target”). The vesting threshold is achievement of 90% of 2021 License Revenue Target. If the Corporation’s actual result exceeds 90% of the 2021 License Revenue Target, every 1% increase of the 2021 License Revenue Target, up to 110%, would result in an increase of 1% of the eligible PSUs.
50%
Vesting of the full 50% of the PSUs occurs if the Corporation achieves positive total shareholder return whereby the return on the Corporation’s stock for 2021 is greater than the S&P500 index. The vesting threshold is if the return on the Corporation’s stock for 2021 is at least 90% of the S&P500 index. If the return on the Corporation’s stock, in comparison to the S&P500, is above 90% but less than 99% of the S&P500 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&P500 index, every 1% increase in comparison to the S&P500 index, up to 110%, would result in an increase of 2% of the eligible PSUs.
 
 
Additionally, PSUs representing an additional 20%, meaning an additional 1,788, 536, 477 and 477 would be eligible for vesting for each of Messrs. Wertheizer, Ohana, Arieli and Boukaya, respectively, if the performance goals set forth above are exceeded.
 
Subject to achievement of the thresholds the above performance goals for 2021, the Short-Term Executive PSUs vest 33.4% on February 18, 2022, 33.3% on February 18, 2023 and 33.3% on February 18, 2024.
 
Amendment to the Employment Agreements For the Chief Executive Officer, Chief Financial Officer and Chief Operating Officer
 
On February 16, 2021, the Committee approved a change to the vacation policy for all employees of the Corporation. Under the vacation policy as revised, instead of accumulating each employee’s balance of any accrued but unused vacation days, the Corporation will pay out any accrued but unused vacation days in excess of two weeks. As part of implementing this new vacation policy, the Corporation will pay out such accrued but unused vacation days in excess of two weeks to each employee. For Messrs. Wertheizer and Arieli, the payment amount is approximately $733,000 and approximately $175,000, respectively, and the Employment Agreement for each of Messrs. Wertheizer and Arieli was amended to reflect payment of such accrued but unused vacation days under the revised vacation policy. Mr. Boukaya did not have any accrued but unused vacation days as of the change in vacation policy.
 
 
 
 
In addition, the Employment Agreements for each of Messrs. Wertheizer, Arieli and Boukaya were amended to reference a new Israeli law that apply to all employees, including such executives. As of July 1, 2021, the Corporation’s contributions to the severance pay component of such executive’s pension fund shall be in lieu of severance pay, in accordance with Section 14 of the Severance Pay Law, 1963-14, and such executive shall not be entitled to any other additional payments of severance pay with respect the period beginning on such date.
 
The foregoing description of the amendments to such Employment Agreements is qualified in its entirety by reference to the complete text of such amended agreements, which are attached as Exhibits 10.2, 10.3 and 10.4 to this Current Report on Form 8-K and are incorporated herein by reference.
 
 
ITEM 9.01. Financial Statements and Exhibits.
 
(d) Exhibits.
 
10.1     2021 Incentive Plan for Issachar Ohana, EVP Worldwide Sales (portions of this exhibit are redacted).
 
10.2     Amendment, dated February 18, 2021, to the Employment Agreement between the Registrant and Gideon Wertheizer dated as of November 1, 2002.
 
10.3     Amendment, dated February 18, 2021, to the Employment Agreement between the Registrant and Yaniv Arieli dated as of August 18, 2005.
 
10.4     Amendment, dated February 18, 2021, to the Employment Agreement between the Registrant and Michael Boukaya dated as of April 4, 2019.
 
104      Cover Page Interactive Data File (embedded within the Inline XBRL document).
 
 
 
 
SIGNATURES
 
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 19, 2021
By:
/s/ Yaniv Arieli
Yaniv Arieli
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 18, 2021

 

 

To: Issachar Ohana, EVP WW Sales, CEVA, Inc. (the “Company”)

From: Gideon Wertheizer, CEO

 

 

Re: 2021 Incentive Plan

 

This document outlines your Incentive Plan for 2021. The rules and guidelines for the plan are contained herein.

 

 

1.

Compensation Package: Your compensation package is made up of a base salary and an Incentive Bonus (“IB”) component. The IB provides reward for successful performance and is based on (a) the Company’s annual Revenue Target (the “CRT”), (b) Corporate Quarterly Revenue Target (the “CQRT”) and (c) Strategic Accounts (the “SA”), each as further detailed below.

 

 

A.     Company Revenue Target (“CRT”)     $[***]

    

  i.   Revenue-Based Incentive Target:      $165,000
 

ii.

 

Commission Rate: [***]

 

iii.

 

Commission Multiplier: The commission multipliers are set forth in the table below. The commission multipliers to be used in the quarterly commission calculation will be based on your percent of cumulative quota achievement after achieving the CRT target.

 

Percent of Cumulative Quota

Achievement

Commission Multiplier to be

Applied

From 0 to 100%

1.0

From 100% and above

1.5

 

 

While the CRT is based on the Company’s annual Revenue Target, the IB payment is calculated on a quarterly basis, based on bookings that have been invoiced and recognized as revenue by the Company, and paid after the end of the respective quarter as soon as reasonably practical.

 

 
 

 

 

B.

$5,000 payment each quarter based on achievement of the following CQRT:

 

  i.   Q1          $[***]
  ii.   Q2          $[***]
  iii.   Q3          $[***]
  iv.   Q4          $[***]

 

 

C.

$6,000 payment based on each new license agreement with predetermined royalty per chip with the following Strategic Account (SA).

    Note: royalty per chip relates to the lowest bracket of a royalty scheme.
    [***]

     

Payments are calculated on an annual basis, based on bookings that have been invoiced and recognized as revenue by the Company, and paid as is practically possible.

 

The total bonus payment due for SA deals will be capped at $30,000 as long as the annual revenue achieved by the Company is below the CRT. The cap for SA bonus will be removed if the annual revenue achieved by the Company exceeds the CRT.

 

 

2.

Effective date/terms: This plan is effective for January 1, 2021 through December 31, 2021, unless modified in writing by the CEO. This plan supersedes all prior commission plans. Management reserves the right to make any changes to the sales incentive plan at any time.

 

 

3.

Plan Eligibility: This 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, you will be entitled to IB payment based on any revenue amount invoiced up to the date of termination.

 

 

I have read and understand the 2021 Incentive Plan. I have received a copy of the plan for my record. I accept the terms and conditions of the plan as outlined above and agree that my compensation will be determined according to these terms and conditions.

 

/s/ Issachar Ohana   2/18/2021
Issachar Ohana, EVP Worldwide Sales    Date
     
/s/ Gideon Wertheizer   2/18/2021
Gideon Wertheizer, CEO   Date
     
CC:      Finance    
     HR, Employee File    

                         

 

Exhibit 10.2

 

AMENDMENT TO EMPLOYMENT AGREEMENT 

 

Made and signed on the 18 of February 2021

 

This Amendment to the Employment Agreement (this “Amendment”) is entered into as of 18 February 2021 (“Amendment Effective Date”) by and between CEVA D.S.P. Ltd (the “Company”), and Gideon Wertheizer, ID 054540414 of Beer Ganim 87, Even Yehuda (the “Executive”).

 

Whereas the Company and Executive entered into an employment agreement dated 1 November 2002 (the “Agreement”); and

 

Whereas the parties desire to amend the Agreement so to render it compatible with the Company's present policies and practices, all as set out in this Amendment.

 

Now Therefore, the parties agree as follows:

 

1.     Amendments to the Agreement

 

Pursuant to the parties' mutual understanding, the following terms of the Agreement shall be amended as follows:

 

1.1.    Accrual of Vacation Days

 

 

(a)

In accordance with the Company's renewed vacation policy, as of the Amendment Effective Date, the Executive shall be entitled to accumulate to his credit an unused balance of the vacation days up to a ceiling that is double the number of annual vacation days that he is entitled to accumulate under the Agreement (the "Ceiling"), provided that he takes at least seven consecutive annual working days' vacation each year. Should the Executive accumulate vacation days exceeding the Ceiling, the exceeding days balance shall be eliminated from the Executive's credit upon the completion of the relevant calendar year.

 

 

(b)

Those vacation days exceeding the Ceiling as of the Amendment Effective Date shall be redeemed within the framework of the Executive's upcoming monthly salary.

     
    It is clarified that as of the Amendment Effective Date, the Executive has accumulated to his credit 386.15 Excess Vacation Days, each such day being of monetary value of 6,204.5 NIS (gross) (equivalent to approximately 1,897 USD). Total monetary value of Excess Vacation Days: of 732,696 USD (2,395,885 NIS) (gross).

 

 
 

 

1.2.    Application of Section 14 Arrangement

 

 

(a)

As of 1 July 2021, the Company's payments under the severance pay component of the Executive's pension fund shall be in lieu of severance pay in accordance with Section 14 of the Severance Pay Law, 1963-14 (hereinafter: the "Severance Pay Law") and the Executive shall not be entitled to any other additional payments of severance pay with respect the period beginning on said date.

 

 

(b)

The Executive and the Company, by signing this Amendment, adopt the arrangement pursuant to the general confirmation (hereinafter: the "General Confirmation") regarding employers' payments for pension fund and provident fund instead of severance pay, in accordance with the Severance Pay Law, 5723-1963, attached to this Appendix as Appendix A and forming an integral part hereof.

 

2.     Miscellaneous

 

 

2.1.

All terms and provisions of the Agreement not amended hereby, either expressly or by necessary implication, shall remain in full force and effect.

 

2.2.

This Amendment may be changed, supplemented or modified only by a written instrument duly executed by or on behalf of each party hereto.

 

2.3.

This Amendment shall be governed by and construed in accordance with the laws of the State of Israel.

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment to Agreement effective as of the Amendment Effective Date.

 

Company:

Executive

   

Signature: /s/ Peter McManamon 

Name: Peter McManamon

Title: Chairman of the Board of Directors

Signature: /s/ Gideon Wertheizer 

   
Signature: /s/ Yaniv Arieli  
Name: Yaniv Arieli  
Title: Chief Financial Officer  

 

 
 

 

APPENDIX A

 

GENERAL APPROVAL REGARDING PAYMENTS BY EMPLOYERS TO A PENSION FUND AND INSURANCE FUND IN LIEU OF SEVERANCE PAY

 

By virtue of my power under section 14 of the Severance Pay Law, 1963 (hereinafter: the “Law"), I certify that payments made by an employer commencing from the date of the publication of this approval publication for his employee to a comprehensive pension benefit fund that is not an insurance fund within the meaning thereof in the Income Tax (Rules for the Approval and Conduct of Benefit Funds) Regulations, 1964 (hereinafter: the “Pension Fund") or to managers insurance including the possibility of an insurance pension fund or a combination of payments to an annuity fund and to a non-annuity fund (hereinafter: the “Insurance Fund), including payments made by him by a combination of payments to a Pension Fund and an Insurance Fund, whether or not the Insurance Fund has an annuity fund (hereinafter: the “Employer's Payments), shall be made in lieu of the severance pay due to the said employee in respect of the salary from which the said payments were made and for the period they were paid (hereinafter: the “Exempt Salary"), provided that all the following conditions are fulfilled:

 

(1)

The Employer's Payments -

 

 

(a)

To the Pension Fund are not less than 141/3% of the Exempt Salary or 12% of the Exempt Salary if the employer pays for his employee in addition thereto also payments to supplement severance pay to a benefit fund for severance pay or to an Insurance Fund in the employee's name in an amount of 21/3% of the Exempt Salary. In the event the employer has not paid an addition to the said 12%, his payments shall be only in lieu of 72% of the employee's severance pay;

 

 

(b)

To the Insurance Fund are not less than one of the following:

 

(1)     131/3% of the Exempt Salary, if the employer pays for his employee in addition thereto also payments to secure monthly income in the event of disability, in a plan approved by the Commissioner of the Capital Market, Insurance and Savings Department of the Ministry of Finance, in an amount required to secure at least 75% of the Exempt Salary or in an amount of 21/2% of the Exempt Salary, the lower of the two (hereinafter: “Disability Insurance");

 

(2)     11% of the Exempt Salary, if the employer paid, in addition, a payment to the Disability Insurance, and in such case the Employer's Payments shall only replace 72% of the Employee's severance pay; In the event the employer has paid in addition to the foregoing payments to supplement severance pay to a benefit fund for severance pay or to an Insurance Fund in the employee's name in an amount of 21/3% of the Exempt Salary, the Employer's Payments shall replace 100% of the employee's severance pay.

 

(2)

No later than three months from the commencement of the Employer's Payments, a written agreement is executed between the employer and the employee in which -

 

 

(a)

The employee has agreed to the arrangement pursuant to this approval in a text specifying the Employer's Payments, the Pension Fund and Insurance Fund, as the case may be; the said agreement shall also include the text of this approval;

 

 

(b)

The employer waives in advance any right, which it may have to a refund of monies from his payments, unless the employee’s right to severance pay has been revoked by a judgment by virtue of Section 16 and 17 of the Law, and to the extent so revoked and/or the employee has withdrawn monies from the Pension Fund or Insurance Fund other than by reason of an entitling event; in such regard "Entitling Event" means death, disability or retirement at after the age of 60.

 

(3)

This approval is not such as to derogate from the employee's right to severance pay pursuant to any law, collective agreement, extension order or employment agreement, in respect of salary over and above the Exempt Salary.

 

  /s/ Gideon Wertheizer /s/ Peter McManamon
  The Executive   /s/ Yaniv Arieli
    The Employer
    CEVA D.S.P. Ltd.

 

 

Exhibit 10.3

 

AMENDMENT TO EMPLOYMENT AGREEMENT 

 

Made and signed on the 18 of February 2021

 

This Amendment to the Employment Agreement (this “Amendment”) is entered into as of 18 February 2021 (“Amendment Effective Date”) by and between CEVA D.S.P. Ltd (the “Company”), and Yaniv Arieli, ID 023832827 of 8 Rieness st. Raanana (the “Executive”).

 

Whereas the Company and Executive entered into an employment agreement dated 18 August 2005 (the “Agreement”); and

 

Whereas the parties desire to amend the Agreement so to render it compatible with the Company's present policies and practices, all as set out in this Amendment.

 

Now Therefore, the parties agree as follows:

 

1.     Amendments to the Agreement

 

Pursuant to the parties' mutual understanding, the following terms of the Agreement shall be amended as follows:

 

1.1    Accrual of Vacation Days

 

 

(a)

In accordance with the Company's renewed vacation policy, as of the Amendment Effective Date, the Executive shall be entitled to accumulate to his credit an unused balance of the vacation days up to a ceiling that is double the number of annual vacation days that he is entitled to accumulate under the Agreement (the "Ceiling"), provided that he takes at least seven consecutive annual working days' vacation each year. Should the Executive accumulate vacation days exceeding the Ceiling, the exceeding days balance shall be eliminated from the Executive's credit upon the completion of the relevant calendar year.

 

 

(b)

Those vacation days exceeding the Ceiling as of the Amendment Effective Date shall be redeemed within the framework of the Executive's upcoming monthly salary.

     
    It is clarified that as of the Amendment Effective Date, the Executive has accumulated to his credit 149.32 Excess Vacation Days, each such day being of monetary value of 3,841 NIS (gross) (equivalent to approximately 1,175 USD). Total monetary value of Excess Vacation Days: of 175,396 USD (573,537 NIS) (gross).

 

 
 

 

1.2.   Application of Section 14 Arrangement

 

 

(a)

As of 1 July 2021, the Company's payments under the severance pay component of the Executive's pension fund shall be in lieu of severance pay in accordance with Section 14 of the Severance Pay Law, 1963-14 (hereinafter: the "Severance Pay Law") and the Executive shall not be entitled to any other additional payments of severance pay with respect the period beginning on said date.

 

 

(b)

The Executive and the Company, by signing this Amendment, adopt the arrangement pursuant to the general confirmation (hereinafter: the "General Confirmation") regarding employers' payments for pension fund and provident fund instead of severance pay, in accordance with the Severance Pay Law, 5723-1963, attached to this Appendix as Appendix A and forming an integral part hereof.

 

2.     Miscellaneous

 

 

2.1.

All terms and provisions of the Agreement not amended hereby, either expressly or by necessary implication, shall remain in full force and effect.

 

2.2.

This Amendment may be changed, supplemented or modified only by a written instrument duly executed by or on behalf of each party hereto.

 

2.3.

This Amendment shall be governed by and construed in accordance with the laws of the State of Israel.

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment to Agreement effective as of the Amendment Effective Date.

 

Company:

Executive

   

Signature: /s/ Gideon Wertheizer 

Name: Gideon Wertheizer

Title: Chief Executive Officer

Signature: /s/ Yaniv Arieli 

 

 
 

 

APPENDIX A

 

GENERAL APPROVAL REGARDING PAYMENTS BY EMPLOYERS TO A PENSION FUND AND INSURANCE FUND IN LIEU OF SEVERANCE PAY

 

By virtue of my power under section 14 of the Severance Pay Law, 1963 (hereinafter: the “Law"), I certify that payments made by an employer commencing from the date of the publication of this approval publication for his employee to a comprehensive pension benefit fund that is not an insurance fund within the meaning thereof in the Income Tax (Rules for the Approval and Conduct of Benefit Funds) Regulations, 1964 (hereinafter: the “Pension Fund") or to managers insurance including the possibility of an insurance pension fund or a combination of payments to an annuity fund and to a non-annuity fund (hereinafter: the “Insurance Fund), including payments made by him by a combination of payments to a Pension Fund and an Insurance Fund, whether or not the Insurance Fund has an annuity fund (hereinafter: the “Employer's Payments), shall be made in lieu of the severance pay due to the said employee in respect of the salary from which the said payments were made and for the period they were paid (hereinafter: the “Exempt Salary"), provided that all the following conditions are fulfilled:

 

(1)

The Employer's Payments -

 

 

(a)

To the Pension Fund are not less than 141/3% of the Exempt Salary or 12% of the Exempt Salary if the employer pays for his employee in addition thereto also payments to supplement severance pay to a benefit fund for severance pay or to an Insurance Fund in the employee's name in an amount of 21/3% of the Exempt Salary. In the event the employer has not paid an addition to the said 12%, his payments shall be only in lieu of 72% of the employee's severance pay;

 

 

(b)

To the Insurance Fund are not less than one of the following:

 

(1)     131/3% of the Exempt Salary, if the employer pays for his employee in addition thereto also payments to secure monthly income in the event of disability, in a plan approved by the Commissioner of the Capital Market, Insurance and Savings Department of the Ministry of Finance, in an amount required to secure at least 75% of the Exempt Salary or in an amount of 21/2% of the Exempt Salary, the lower of the two (hereinafter: “Disability Insurance");

 

(2)     11% of the Exempt Salary, if the employer paid, in addition, a payment to the Disability Insurance, and in such case the Employer's Payments shall only replace 72% of the Employee's severance pay; In the event the employer has paid in addition to the foregoing payments to supplement severance pay to a benefit fund for severance pay or to an Insurance Fund in the employee's name in an amount of 21/3% of the Exempt Salary, the Employer's Payments shall replace 100% of the employee's severance pay.

 

(2)

No later than three months from the commencement of the Employer's Payments, a written agreement is executed between the employer and the employee in which -

 

 

(a)

The employee has agreed to the arrangement pursuant to this approval in a text specifying the Employer's Payments, the Pension Fund and Insurance Fund, as the case may be; the said agreement shall also include the text of this approval;

 

 

(b)

The employer waives in advance any right, which it may have to a refund of monies from his payments, unless the employee’s right to severance pay has been revoked by a judgment by virtue of Section 16 and 17 of the Law, and to the extent so revoked and/or the employee has withdrawn monies from the Pension Fund or Insurance Fund other than by reason of an entitling event; in such regard "Entitling Event" means death, disability or retirement at after the age of 60.

 

(3)

This approval is not such as to derogate from the employee's right to severance pay pursuant to any law, collective agreement, extension order or employment agreement, in respect of salary over and above the Exempt Salary.

 

  /s/ Yaniv Arieli  /s/ Gideon Wertheizer
  The Executive  The Employer
    CEVA D.S.P. Ltd.

                             

 

Exhibit 10.4

 

AMENDMENT TO EMPLOYMENT AGREEMENT 

 

Made and signed on the 18 of February 2021

 

This Amendment to the Employment Agreement (this “Amendment”) is entered into as of 18 February 2021 (“Amendment Effective Date”) by and between CEVA D.S.P. Ltd (the “Company”), and Michael Boukaya, ID 313701112 of Ben Gurion  17/6, Raanana (the “Executive”).

 

Whereas the Company and Executive entered into an employment agreement dated 4 April 2019 (the “Agreement”); and

 

Whereas the parties desire to amend the Agreement so to render it compatible with the Company's present policies and practices, all as set out in this Amendment.

 

Now Therefore, the parties agree as follows:

 

1.     Amendment to the Agreement

 

Pursuant to the parties' mutual understanding, the following terms of the Agreement shall be amended as follows:

 

Application of Section 14 Arrangement

 

 

(a)

As of 1 July 2021, the Company's payments under the severance pay component of the Executive's pension fund shall be in lieu of severance pay in accordance with Section 14 of the Severance Pay Law, 1963-14 (hereinafter: the "Severance Pay Law") and the Executive shall not be entitled to any other additional payments of severance pay with respect the period beginning on said date.

 

 

(b)

The Executive and the Company, by signing this Amendment, adopt the arrangement pursuant to the general confirmation (hereinafter: the "General Confirmation") regarding employers' payments for pension fund and provident fund instead of severance pay, in accordance with the Severance Pay Law, 5723-1963, attached to this Appendix as Appendix A and forming an integral part hereof.

 

2.     Miscellaneous

 

 

2.1.

All terms and provisions of the Agreement not amended hereby, either expressly or by necessary implication, shall remain in full force and effect.

 

2.2.

This Amendment may be changed, supplemented or modified only by a written instrument duly executed by or on behalf of each party hereto.

 

2.3.

This Amendment shall be governed by and construed in accordance with the laws of the State of Israel.

 

 
 

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment to Agreement effective as of the Amendment Effective Date.

 

Company:

Executive

   

Signature: /s/ Gideon Wertheizer

Name: Gideon Wertheizer

Title: Chief Executive Officer

Signature: /s/ Michael Boukaya

 

 
 

 

APPENDIX A

 

GENERAL APPROVAL REGARDING PAYMENTS BY EMPLOYERS TO A PENSION FUND AND INSURANCE FUND IN LIEU OF SEVERANCE PAY

 

By virtue of my power under section 14 of the Severance Pay Law, 1963 (hereinafter: the “Law"), I certify that payments made by an employer commencing from the date of the publication of this approval publication for his employee to a comprehensive pension benefit fund that is not an insurance fund within the meaning thereof in the Income Tax (Rules for the Approval and Conduct of Benefit Funds) Regulations, 1964 (hereinafter: the “Pension Fund") or to managers insurance including the possibility of an insurance pension fund or a combination of payments to an annuity fund and to a non-annuity fund (hereinafter: the “Insurance Fund), including payments made by him by a combination of payments to a Pension Fund and an Insurance Fund, whether or not the Insurance Fund has an annuity fund (hereinafter: the “Employer's Payments), shall be made in lieu of the severance pay due to the said employee in respect of the salary from which the said payments were made and for the period they were paid (hereinafter: the “Exempt Salary"), provided that all the following conditions are fulfilled:

 

(1)

The Employer's Payments -

 

 

(a)

To the Pension Fund are not less than 141/3% of the Exempt Salary or 12% of the Exempt Salary if the employer pays for his employee in addition thereto also payments to supplement severance pay to a benefit fund for severance pay or to an Insurance Fund in the employee's name in an amount of 21/3% of the Exempt Salary. In the event the employer has not paid an addition to the said 12%, his payments shall be only in lieu of 72% of the employee's severance pay;

 

 

(b)

To the Insurance Fund are not less than one of the following:

 

(1)     131/3% of the Exempt Salary, if the employer pays for his employee in addition thereto also payments to secure monthly income in the event of disability, in a plan approved by the Commissioner of the Capital Market, Insurance and Savings Department of the Ministry of Finance, in an amount required to secure at least 75% of the Exempt Salary or in an amount of 21/2% of the Exempt Salary, the lower of the two (hereinafter: “Disability Insurance");

 

(2)     11% of the Exempt Salary, if the employer paid, in addition, a payment to the Disability Insurance, and in such case the Employer's Payments shall only replace 72% of the Employee's severance pay; In the event the employer has paid in addition to the foregoing payments to supplement severance pay to a benefit fund for severance pay or to an Insurance Fund in the employee's name in an amount of 21/3% of the Exempt Salary, the Employer's Payments shall replace 100% of the employee's severance pay.

 

(2)

No later than three months from the commencement of the Employer's Payments, a written agreement is executed between the employer and the employee in which -

 

 

(a)

The employee has agreed to the arrangement pursuant to this approval in a text specifying the Employer's Payments, the Pension Fund and Insurance Fund, as the case may be; the said agreement shall also include the text of this approval;

 

 

(b)

The employer waives in advance any right, which it may have to a refund of monies from his payments, unless the employee’s right to severance pay has been revoked by a judgment by virtue of Section 16 and 17 of the Law, and to the extent so revoked and/or the employee has withdrawn monies from the Pension Fund or Insurance Fund other than by reason of an entitling event; in such regard "Entitling Event" means death, disability or retirement at after the age of 60.

 

(3)

This approval is not such as to derogate from the employee's right to severance pay pursuant to any law, collective agreement, extension order or employment agreement, in respect of salary over and above the Exempt Salary.

     
  /s/ Michael Boukaya  /s/ Gideon Wertheizer     
  The Executive The Employer
    CEVA D.S.P. Ltd.