CEVA

Business Context and Reporting Period

This Form 8-K Current Report was filed by CEVA, Inc. on May 7, 2019. The filing addresses Item 5.02 regarding the amendment of the 2019 long-term equity award for Gideon Wertheizer, the Company's Chief Executive Officer. The amendment was approved by the Compensation Committee of the Board of Directors effective immediately.

Key Financial Metrics

The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on executive compensation structure and does not contain financial performance data for the reporting period.

Material Changes Versus Prior Period

The primary material change is the restructuring of the CEO's 2019 equity award following stockholder feedback:

• Prior Award: 30,000 time-based Restricted Stock Units (RSUs) granted on February 19, 2019, vesting over three years.
• Amended Award: The time-based award was reduced to 10,000 RSUs. The remaining 20,000 units were converted into an opportunity to earn up to 24,000 Performance Stock Units (PSUs).
• Rationale: Stockholders indicated that performance-based awards better align executive interests with stockholder value compared to time-based awards.

Guidance, Outlook, and Management Commentary

Performance Criteria: The PSU award is tied to the "2019 License Revenue Target" approved by the Board.

• Threshold: 90% achievement of the target is required for initial vesting.
• Target: 100% achievement results in 20,000 PSUs.
• Maximum: 120% achievement results in 24,000 PSUs.
• Calculation: Vesting is calculated linearly between 90% and 120% of the target.

Vesting Schedule: Subject to meeting the revenue threshold, the PSUs vest over three years: 1/3 on February 19, 2020, and the remaining balance in equal installments on February 19, 2021, and February 19, 2022. Management Commentary: The Committee stated that this amendment enhances the alignment of pay with performance and reflects competitive practices. Since 2015, the Company has utilized RSUs to minimize dilution compared to stock options.

Important Facts for Investor Verification

• Verify the specific dollar amount of the "2019 License Revenue Target" as it is referenced but not disclosed in this filing.
• Confirm the total number of PSUs earned once the 2019 fiscal year concludes and actual revenue is reported.
• Review the Company's subsequent 10-K or 10-Q filings to assess if the 90% revenue threshold was met to trigger any PSU vesting.
• Note that the CEO's compensation is now significantly more variable and dependent on achieving specific revenue milestones.