Filed by Bowne Pure Compliance



 




Exhibit 10.9




PARTHUSCEVA, INC.

(subsequently known as CEVA, INC.)




2003 DIRECTOR STOCK OPTION PLAN

(amended and restated on May 15, 2007)




1. Purpose




The purpose of this 2003 Director Stock Option Plan (the “Plan”) of ParthusCeva, Inc. (the
“Company,” including any successor to the Company) is to encourage ownership in the Company by
non-employee directors of the Company whose continued services are considered essential to the
Company’s future progress and to provide them with a further incentive to remain as directors of
the Company.



2. Administration




The Board of Directors (the “Board”) shall supervise and administer the Plan. All questions
concerning interpretation of the Plan or any options granted under it shall be resolved by the
Board and such resolution shall be final and binding upon all persons having an interest in the
Plan. The Board may, to the full extent permitted by or consistent with applicable laws or
regulations, delegate any or all of its powers under the Plan to a committee appointed by the
Board, and if a committee is so appointed, all references to the Board in the Plan shall mean and
relate to such committee.



3. Participation in the Plan




Each director of the Company who is not an employee of the Company or any parent or subsidiary
of the Company (“Non-Employee Director”) shall be eligible to receive options under the Plan (the
“Optionee”).



4. Stock Subject to the Plan




(a) The maximum number of shares of the Company’s common stock, par value $.001 per share
(“Common Stock”), which may be issued under the Plan shall be 700,000 shares, subject to adjustment
as provided in Section 7.



(b) If any outstanding option under the Plan for any reason expires or is terminated without
having been exercised in full, the shares covered by the unexercised portion of such option shall
again become available for issuance pursuant to the Plan.



(c) All options granted under the Plan shall be non-statutory options not entitled to special
tax treatment under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).



(d) Shares issued under the Plan may consist in whole or in part of authorized but unissued
shares or treasury shares.


 


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5. Terms, Conditions and Form of Options




Each option granted under the Plan shall be evidenced by a written agreement in such form as
the Board shall from time to time approve, which agreements shall comply with and be subject to the
following terms and conditions:




(a) Option Grants.



(i) Each person who is a Non-Employee Director on the Effective Date and each person who
subsequently becomes a Non-Employee Director shall be automatically granted an option to purchase
38,000 shares of Common Stock on the date of which the later of the following events occurs: (A)
the Effective Date; or (B) the date on which such person first becomes a Non-Employee Director,
whether through election by the stockholders of the Company or appointment by the Board to fill a
vacancy.



(ii) On the Effective Date, each Non-Employee Director shall be automatically granted (A) an
option to purchase 13,000 shares of Common Stock, if on such date he or she shall have served on
the Board for at least six (6) months, and (B) an option to purchase 13,000 shares of Common Stock
for each committee of the Board on which he or she shall have served as chairperson for at least
six (6) months on such date. Beginning on June 30, 2004, on June 30 of each year, each
Non-Employee Director shall be automatically granted (A) an option to purchase 13,000 shares of
Common Stock, if on such date he or she shall have served on the Board for at least six (6) months,
and (B) an option to purchase 13,000 shares of Common Stock for each committee of the Board on
which he or she shall have served as chairperson for at least six (6) months on such date.



(iii) Subject to the execution by the Optionee of an appropriate option agreement, the Board
may grant additional options to purchase a number of shares to be determined by the Board in
recognition of services provided by an Optionee in his or her capacity as a director, provided that
such grants are in compliance with the requirements of Rule 16b-3, as promulgated under the
Securities Exchange Act of 1934, as amended.



Each date of grant of an option pursuant to this Section 5(a) is hereinafter referred to as an
“Option Grant Date.”



(b) Option Exercise Price. The option exercise price per share for each option granted under
the Plan shall equal (i) the closing price of the Common Stock on The NASDAQ Global Market, (ii)
the closing price of the Common Stock on The NASDAQ Capital Market or any national securities
exchange on which the Common Stock is listed or (iii) the average of the closing bid and asked
prices of the Common Stock in the over-the-counter market, whichever is applicable, as published in
The Wall Street Journal, on the last trading day immediately preceding the Option Grant Date. If
no sales of Common Stock were made on the last trading day immediately preceding the Option Grant
Date, the price of the Common Stock for purposes of Section 5(a) above shall be the reported price
for the next preceding day on which such sales were made.


 


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(c) Transferability of Options. Except as the Board may otherwise determine or provide in an
option granted under the Plan, any option granted under the Plan shall not be sold,
assigned, transferred, pledged or otherwise encumbered by the Optionee, either voluntarily or
by operation of law, except by will or the laws of descent and distribution, and, during the life
of the Optionee, shall be exercisable only by the Optionee. References to an Optionee, to the
extent relevant in the context, shall include references to authorized transferees.



(d) Vesting Period. Each option granted pursuant to Section 5(a)(i) or Section 5(a)(ii) above
shall vest and become exercisable as to 25% of the shares of Common Stock subject to the option on
the first anniversary of the Option Grant Date, and shall vest and become exercisable as to 25% of
the shares of Common Stock subject to the option at the end of each twelve-month period thereafter,
subject to the provisions of Section 7. Each option granted under the Plan pursuant to Section
5(a)(iii) above shall become exercisable on such terms as shall be determined by the Board and set
forth in the option agreement with the respective Optionee, subject to the provisions of Section 7.



(e) Termination. Each option shall terminate, and may no longer be exercised, on the earlier
of (i) the date ten years after the Option Grant Date of such option or (ii) the date which is 90
days after the date on which the Optionee ceases to serve as a Non-Employee Director.



(f) Exercise of Option. An option may be exercised only by written notice to the Company at
its principal office accompanied by (i) payment in cash or by certified or bank check of the full
consideration for the shares as to which they are exercised or (ii) an irrevocable undertaking by a
creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price
or delivery of irrevocable instructions to a creditworthy broker to deliver promptly to the Company
cash or a check sufficient to pay the exercise price.



6. Limitation of Rights




(a) No Right to Continue as a Director. Neither the Plan, nor the granting of an option nor
any other action taken pursuant to the Plan, shall constitute or be evidence of any agreement or
understanding, express or implied, that the Company will retain the Optionee as a Non-Employee
Director for any period of time.



(b) No Stockholder’s Rights for Options. An Optionee shall have no rights as a stockholder
with respect to the shares covered by his or her option until the date of the issuance to him or
her of a stock certificate therefor, and no adjustment will be made for dividends or other rights
(except as provided in Section 7) for which the record date is prior to the date such certificate
is issued.



(c) Compliance with Securities Laws. Each option shall be subject to the requirement that if,
at any time, counsel to the Company shall determine that the listing, registration or qualification
of the shares subject to such option upon any securities exchange or under any state or federal
law, or the consent or approval of any governmental or regulatory body, or the disclosure of
non-public information or the satisfaction of any other condition is necessary as a condition of,
or in connection with, the issuance or purchase of shares thereunder, such option may not be
exercised, in whole or in part, unless such listing, registration, qualification, consent or
approval, or satisfaction of such condition shall have been effected or
obtained on conditions acceptable to the Board. Nothing herein shall be deemed to require the
Company to apply for or to obtain such listing, registration or qualification, or to satisfy such
condition.


 


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7. Adjustments for Changes in Common Stock and Certain Other Events.




(a) Changes in Capitalization. In the event of any stock split, reverse stock split, stock
dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other
similar change in capitalization or event, or any distribution to holders of Common Stock other
than a normal cash dividend, (i) the number and class of securities available under this Plan and
(ii) the number and class of securities and exercise price per share subject to each outstanding
option under the Plan shall be appropriately adjusted by the Company (or substituted options may be
made, if applicable) to the extent the Board shall determine, in good faith, that such an
adjustment (or substitution) is necessary and appropriate. If this Section 7(a) applies and
Section 7(c) or Section 7(d) also applies to any event, Section 7(c) or Section 7(d), as
applicable, shall be applicable to such event, and this Section 7(a) shall not be applicable.



(b) Liquidation or Dissolution. In the event of a proposed liquidation or dissolution of the
Company, all then unexercised options under the Plan will (i) become exercisable in full as of a
specified time at least 10 business days prior to the effective date of such liquidation or
dissolution and (ii) terminate effective upon such liquidation or dissolution, except to the extent
exercised before such effective date.




(c) Reorganization Events.



(i) Definition. A “Reorganization Event” shall mean: (a) any merger or consolidation of the
Company with or into another entity as a result of which all of the Common Stock is converted into
or exchanged for the right to receive cash, securities or other property or (b) any exchange of all
of the Common Stock for cash, securities or other property pursuant to a share exchange
transaction, in each case other than an Acquisition Event (as defined below).



(ii) Consequences of a Reorganization Event on Options. Upon the occurrence of a
Reorganization Event, or the execution by the Company of any agreement with respect to a
Reorganization Event, all outstanding options under the Plan shall be Assumed, or equivalent
options shall be substituted, by the surviving or acquiring entity (or an affiliate thereof). For
purposes hereof, an option shall be considered to be “Assumed” if, either (i) the option is
expressly affirmed by the Company or (ii) the contractual obligations represented by the option are
expressly assumed (and not simply by operation of law) by the surviving or acquiring entity (or an
affiliate thereof) in connection with the Reorganization Event with appropriate adjustments to the
number and type of securities of the surviving or acquiring entity (or an affiliate thereof)
subject to the option and the exercise price thereof which at least preserves the compensation
element of the option existing at the time of such Reorganization Event as determined in accordance
with the instruments evidencing the agreement to assume the option.


 


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Notwithstanding the foregoing, if the surviving or acquiring entity (or an affiliate thereof)
does not agree to Assume, or substitute for, the outstanding options, then all then unexercised
options under the Plan will become fully vested and exercisable in full immediately prior to
the effective time of the Reorganization Event and will terminate upon the consummation of such
Reorganization Event, except to the extent exercised by the Participants before the consummation of
such Reorganization Event; provided, however, that in the event of a Reorganization Event under the
terms of which holders of Common Stock will receive upon consummation thereof a cash payment for
each share of Common Stock surrendered pursuant to such Reorganization Event (the “Reorganization
Price”), then the Board may instead provide that all outstanding options under the Plan shall
terminate upon consummation of such Reorganization Event and that each Participant shall receive,
in exchange therefor, a cash payment equal to the amount (if any) by which (A) the Reorganization
Price multiplied by the number of shares of Common Stock subject to such outstanding options
(whether or not then exercisable), exceeds (B) the aggregate exercise price of such options.




(d) Acquisition Events.



(i) Definition. An “Acquisition Event” shall mean (a) any merger or consolidation which
results in the voting securities of the Company outstanding immediately prior thereto representing
immediately thereafter (either by remaining outstanding or by being converted into voting
securities of the surviving or acquiring entity) less than 50% of the combined voting power of the
voting securities of the Company or such surviving or acquiring entity outstanding immediately
after such merger or consolidation, or (b) any sale of all or substantially all of the assets of
the Company.



(ii) Consequences of an Acquisition Event on Options. Upon the occurrence of an Acquisition
Event, or the execution by the Company of any agreement with respect to an Acquisition Event, all
outstanding options under the Plan shall be Assumed, or equivalent options shall be substituted, by
the surviving or acquiring entity (or an affiliate thereof).



Notwithstanding the foregoing, if the surviving or acquiring entity (or an affiliate thereof)
does not agree to Assume, or substitute for, the outstanding options, then all then unexercised
options under the Plan will become fully vested and exercisable in full immediately prior to the
effective time of the Acquisition Event and will terminate upon the consummation of such
Acquisition Event, except to the extent exercised by the Participants before the consummation of
such Acquisition Event; provided, however, that in the event of an Acquisition Event under the
terms of which holders of Common Stock will receive upon consummation thereof a cash payment for
each share of Common Stock surrendered pursuant to such Acquisition Event (the “Acquisition
Price”), then the Board may instead provide that all outstanding options under the Plan shall
terminate upon consummation of such Acquisition Event and that each Participant shall receive, in
exchange therefor, a cash payment equal to the amount (if any) by which (A) the Acquisition Price
multiplied by the number of shares of Common Stock subject to such outstanding options (whether or
not then exercisable), exceeds (B) the aggregate exercise price of such options.



8. Termination and Amendment of the Plan




The Board may suspend or terminate the Plan or amend it in any respect whatsoever.


 


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9. Notice




Any written notice to the Company required by any of the provisions of the Plan shall be
addressed to the Treasurer of the Company and shall become effective when it is received.



10. Governing Law




The Plan and all determinations made and actions taken pursuant hereto shall be governed by
the internal laws of the State of Delaware (without regard to any applicable conflicts of laws or
principles).



11. Effective Date




The Plan shall take effect upon its adoption by the Board and receipt of stockholder approval
at the Company’s 2003 Annual Meeting of Stockholders (the “Effective Date”).




Adopted by the Board of Directors on April 25, 2003.



Adopted by the Stockholders on June 18, 2003.




 


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