Exhibit 10.43

 

DSP GROUP, INC.

 

2012 EQUITY INCENTIVE PLAN

 

AMENDED AND RESTATED DIRECTOR EQUITY SUB-PLAN

 

This sub-plan will be known as the Director Equity Sub-Plan (formerly the
Director Option Sub-Plan) (the “Director Equity Sub-Plan”) of the DSP Group,
Inc. 2012 Equity Incentive Plan (the “Plan”). The Director Equity Sub-Plan has
been adopted for the purpose of attracting and retaining the best available
personnel for service as Outside Directors of the Company, to provide additional
incentive to the Outside Directors of the Company to serve as Directors, and to
encourage their continued service on the Board.

 

For purposes of the Director Equity Sub-Plan, the provisions of the Plan shall
apply subject to the terms provided for below and, in the event of any
inconsistencies between the provisions of the Plan and the Director Equity
Sub-Plan, the provisions of the Director Equity Sub-Plan shall control with
respect to any Award of Options to Outside Directors. All other Awards granted
under the Plan shall be governed by the Plan without any reference to or
application of the Director Equity Sub-Plan. Any Director Awards granted under
the Director Equity Sub-Plan shall be governed by the Plan subject to the terms
provided for below:

 

1.     Definitions. The following words and expressions shall have the following
meanings solely for the purposes of the Director Equity Sub-Plan and the Awards
granted hereunder, unless the context otherwise requires:

 

(a)     “Continuous Status as a Director” shall mean the absence of any
interruption or termination of service as a member of the Board.

 

(b)     “Director” means a member of the Board.

 

(c)     “Director Equity Sub-Plan” means the Director Equity Sub-Plan (formerly
the Director Option Sub-Plan) of the DSP Group, Inc. 2012 Equity Incentive Plan
constituted and governed by the Plan subject to the terms set out herein.

 

(d)     “Effective Date” means January 1, 2014.

 

(e)     “Plan” means DSP Group, Inc.’s 2012 Equity Incentive Plan.

 

(f)     “Director Award” means an Award of an Option or a Restricted Stock Unit
that is granted under and satisfies the conditions of the Director Equity
Sub-Plan.

 

(g)     “Director Option” means an Award of an Option that is granted under and
satisfies the conditions of the Director Equity Sub-Plan.

 

(h)     “Director RSU” means an Award of a Restricted Stock Unit that is granted
under and satisfies the conditions of the Director Equity Sub-Plan.

 

(i)     “Outside Director” means a member of the Board who is not an Employee.

 

 
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2.     Interpretation.

 

(a)     Capitalized words not defined herein shall have the same meaning as in
the Plan.

 

(b)    Where the context so permits the singular shall include the plural and
vice versa and the masculine shall include the feminine.

 

3.     Stock Subject to the Director Equity Sub-Plan. The maximum aggregate
number of Shares which may be issued under the Director Equity Sub-Plan shall be
the number of Shares that may be issued under the Plan (the “Pool”). The Shares
may be authorized, but unissued, or reacquired Common Stock.

 

4.     Eligibility.

 

(a)     Director Awards may be granted only to Outside Directors of the Company.
All Director Awards shall be automatically granted in accordance with the terms
set forth in Section 5 hereof. An Outside Director who has been granted a
Director Award may, if he or she is otherwise eligible, be granted additional
Director Awards in accordance with such provisions.

 

(b)    The Plan shall not confer upon a Grantee any right with respect to
continuation of service as a Director or nomination to serve as a Director, nor
shall it interfere in any way with any rights which the Director or the Company
may have to terminate his or her directorship at any time.

 

5.     Grants of Director Awards Under the Director Equity Sub-Plan

 

(a)     Procedure for Grants. All grants of Director Awards hereunder shall be
automatic and nondiscretionary and shall be made in accordance with the
following provisions:

 

(i)     No person shall have any discretion to select which Outside Directors of
the Company shall be granted Director Awards or to determine the number of
Shares to be covered by Director Awards granted to Outside Directors of the
Company.

 

(ii)    Each Outside Director who becomes a member of the Board after the
Effective Date of this Director Equity Sub-Plan shall be automatically granted
(i) a pro rata portion of a Director Option to purchase 8,000 Shares and (ii) a
pro rata portion of 4,000 Director RSUs on the date on which such person first
becomes an Outside Director of the Company, whether through election by the
stockholders of the Company or appointment by the Board to fill a vacancy.
Proration shall be based upon the number of days remaining in the calendar year
following the date such person was nominated as an Outside Director of the
Company.

 

(iii)   Each Outside Director of the Company shall be automatically granted (i)
a Director Option to purchase 8,000 Shares and (ii) 4,000 Director RSUs on
January 1 of each year.

 

(iv)   Notwithstanding the provisions of subsections (ii) and (iii) hereof, in
the event that a grant would cause the number of Shares subject to outstanding
Awards, plus the number of Shares previously issued pursuant to Awards to exceed
the Pool, then each such automatic grant shall be for that number of Shares
determined by dividing the total number of Shares remaining available for grant
by the number of grants to be made on the automatic grant date. Any further
grants shall then be deferred until such time, if any, as additional Shares
become available for grant under the Plan through action of the stockholders to
increase the number of Shares which may be issued under the Plan or through
cancellation or expiration of Awards previously granted hereunder.

 

 
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(v)    The terms of any Director Award granted hereunder shall be as follows:

 

(A)    Except as provided in Section 8 and the Award Agreement, a Director Award
shall be exercisable only while the Outside Director remains a Director of the
Company.

 

(B)     The exercise price of a Director Option shall be 100% of the Fair Market
Value per Share on the date of grant.

 

(C)     Director Awards shall vest in full and become exercisable as to 100% of
the Shares subject to any Director Award on the first anniversary of the date of
grant of the Director Award.

 

(D)     The Board may accelerate the unvested portion of any Director Award
granted under the Plan held by any Director whose Continuous Status as a
Director terminates for any reason prior to the Director Award being fully
vested.

 

6.     Form of Consideration. The consideration, if any, to be paid for the
Shares to be issued upon exercise of a Director Option shall consist entirely of
cash, check, other Shares having a fair market value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said Director
Option shall be exercised (which, if acquired from the Company, shall have been
held for at least six months), delivery of a properly executed exercise notice,
together with such other documentation as the Company and the broker, if
applicable, shall require to effect an exercise of the Director Option and
delivery to the Company of the funds required to pay the exercise price, or any
combination of such methods of payment and/or any other consideration or method
of payment as shall be permitted under applicable corporate law.

 

7.     Term of Director Options. The term of each Director Option shall be 10
years from the date of grant thereof.

 

8.     Exercise of Options

 

(a)     Termination of Continuous Status as a Director. If a Grantee ceases to
serve as a Director, he or she may, but only within three months after the date
he or she ceases to be a Director, exercise his or her Director Option to the
extent that he or she was entitled to exercise it at the date of such
termination. Notwithstanding the foregoing, in no event may the Director Option
be exercised after its term has expired. The Board may extend the exercise
period of a Director Option held by a Director whose term is expiring to any
date prior to the Option’s expiration date. To the extent that such Outside
Director was not entitled to exercise a Director Option at the date of such
termination, or does not exercise such Director Option (which he or she was
entitled to exercise) within the time specified herein, the Option shall
terminate.

 

 
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(b)    Disability of Grantee. Notwithstanding the provisions of Section 8(a)
above, in the event a Grantee is unable to continue his or her service as a
Director as a result of his or her total and permanent disability (as defined in
Section 22(e)(3) of the Internal Revenue Code), he or she may, but only within
six months from the date of such termination, exercise his or her Director
Option to the extent he or she was entitled to exercise it at the date of such
termination. The Board may extend the exercise period of a Director Option held
by a Director whose Continuous Status as a Director terminates as a result of
his or her total and permanent disability. Notwithstanding the foregoing, in no
event may the Director Option be exercised after its term has expired. To the
extent that he or she was not entitled to exercise the Director Option at the
date of termination, or if he or she does not exercise such Director Option
(which he or she was entitled to exercise) within the time specified herein, the
Director Option shall terminate.

 

(c)     Death of Grantee. In the event of the death of a Grantee:

 

(i)     during the term of the Director Option who is, at the time of his or her
death, a Director and who shall have been in Continuous Status as a Director
since the date of grant of the Director Option, the Director Option may be
exercised, at any time within 12 months following the date of death, by the
Grantee’s estate or by a person who acquired the right to exercise the Director
Option by bequest or inheritance, but only to the extent of the right to
exercise that would have accrued had the Grantee continued living and remained
in Continuous Status as a Director for six months after the date of death. The
Board may extend the exercise period of an Option held by a Director whose
Continuous Status as a Director terminates as a result of his or her death.
Notwithstanding the foregoing, in no event may the Director Option be exercised
after its term has expired.

 

(ii)    within three months after the termination of Continuous Status as a
Director, the Director Option may be exercised, at any time within 12 months
following the date of death, by the Grantee’s estate or by a person who acquired
the right to exercise the Director Option by bequest or inheritance, but only to
the extent of the right to exercise that had accrued at the date of termination.
The Board may extend the exercise period of a Director Option held by a Director
who dies within three months after the termination of Continuous Status as a
Director. Notwithstanding the foregoing, in no event may the Director Option be
exercised after its term has expired.

 

9.     Nontransferability of Awards. The Director Awards may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution. The designation of a
beneficiary by a Grantee does not constitute a transfer. A Director Option may
be exercised during the lifetime of a Grantee only by the Grantee.

 

10.   Corporate Transaction and Change in Control. In the event of a Corporate
Transaction, each Director Award which is at the time outstanding under the Plan
automatically shall become fully vested and exercisable and be released from any
restrictions on transfer and repurchase or forfeiture rights, immediately prior
to the specified effective date of such Corporate Transaction, for all of the
Shares at the time represented by such Director Award. Effective upon the
consummation of the Corporate Transaction, all outstanding Director Awards under
the Plan shall terminate unless Assumed by the successor company or its parent.
In the event of a Change in Control (other than a Change in Control which also
is a Corporate Transaction), each Director Award which is at the time
outstanding under the Plan automatically shall become fully vested and
exercisable and be released from any restrictions on transfer and repurchase or
forfeiture rights, immediately prior to the specified effective date of such
Change in Control, for all of the Shares at the time represented by such
Director Awards. Each such Director Award shall remain exercisable until the
expiration or sooner termination of the applicable Director Award term.

 

11.   The Director Equity Sub-Plan is designed to comply with the provisions of
the Israeli Income Tax Ordinance New Version, 1961, as amended (the “Tax
Ordinance”). The Administrator at its sole discretion may grant Director Options
to an Outside Director who is an Israeli resident pursuant to Sections 3(i) and
102 of the Tax Ordinance.

 

 

END OF DIRECTOR EQUITY SUB-PLAN

 

 

 

 

 

 

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