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<P id=PARA1 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>UNITED STATES<BR>SECURITIES AND EXCHANGE COMMISSION</B><BR><B>Washington, D.C. 20549</B></FONT></P>
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<P id=PARA4 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>FORM 8-K</B></FONT></P>
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<P id=PARA6 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>CURRENT REPORT<BR>Pursuant to Section 13 or 15(d) of the<BR>Securities Exchange Act of 1934</B></FONT></P>
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<P id=PARA8 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Date of report (Date of earliest event reported): February 5, 2017</FONT></P>
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<P id=PARA9 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>DSP GROUP, INC.</B><BR>(Exact Name of Registrant as Specified in Its Charter)</FONT></P>
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<P id=PARA12 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Delaware<BR></B>(State or Other Jurisdiction of Incorporation)</FONT></P>
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<P id=PARA14 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>1-35256</B><B><BR></B>(Commission File Number)</FONT></P></TD>
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<P id=PARA15 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>94-2683643<BR></B>(I.R.S. Employer Identification No.)</FONT></P></TD></TR>
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<P id=PARA16 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>161 S. San Antonio Road, Suite 10<BR>Los Altos, CA</B><B><BR></B>(Address of Principal Executive Offices)</FONT></P></TD>
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<P id=PARA17 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>94022</B><B><BR></B>(Zip Code)</FONT></P></TD></TR></TABLE>
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<P id=PARA19 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>408/986-4300</B><BR>(Registrant&#8217;s Telephone Number, Including Area Code)</FONT></P>
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<P style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">With a copy to:<BR>Jaclyn Liu, Esq.<BR>Morrison&nbsp;&amp; Foerster&nbsp;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; FONT-VARIANT: small-caps">llp</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><BR>425 Market Street<BR>San Francisco, CA 94105</FONT></P>
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<P id=PARA23 style="TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">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 (<I>see </I>General Instruction A.2. below):</FONT></P>
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<P id=PARA31 style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 36pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9744;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</FONT></P>
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<P id=PARA33 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; TEXT-TRANSFORM: uppercase"><B>ITEM 5.02</B><B>. </B><B></B></FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS</B><FONT style="FONT-FAMILY: Times New Roman; TEXT-TRANSFORM: uppercase"><B> </B></FONT></FONT></P>
<P id=PARA34 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA35 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA36 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">On February 5, 2017, the Compensation Committee (the &#8220;Committee&#8221;) of the Board of Directors (the &#8220;Board&#8221;) of DSP Group, Inc. (the &#8220;Company&#8221;) approved a 2017 Performance-Based Bonus Plan applicable for the Chief Executive Officer and Chief Financial Officer of the Company (individually, a &#8220;Plan&#8221; and collectively, the &#8220;Plans&#8221;). Each of the Plans is effective as of January 1, 2017. </FONT></P>
<P id=PARA37 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA38 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The following is a description of the Plans provided pursuant to Paragraph&nbsp;10(iii) to Item&nbsp;601 of Regulation&nbsp;S-K, which requires a written description of a compensatory plan when there is no formal document containing the compensation information. </FONT></P>
<P id=PARA39 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA40 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Pursuant to the Plans, the payment of bonuses is based upon the Company&#8217;s achievement of four separate components, three of which are based on business objectives and one is at the discretion of the Committee. Each component has a specified weighting and such weighting differs among the Plans; provided that the discretionary component is weighted 20% in each of the Plans. No bonus would be payable based on the achievement of the business objective components if the Company&#8217;s 2017 earnings before interest, taxes, depreciation and amortization (&#8220;EBITDA&#8221;), excluding any restricting and non-recurring charges to be determined by the Committee, are less than a specified amount set forth in the Plans as determined by the Committee. </FONT></P>
<P id=PARA41 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA42 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The cap for the bonus payout under the Plan for the Chief Financial Officer is 1.0x of his annual base salary and the cap for the Chief Executive Officer under the Plan is 2.0x of his annual base salary. </FONT></P>
<P id=PARA43 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA44 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Other than under the circumstances whereby there is a change of control transaction involving the Company, or termination of employment under specified circumstances as set forth in the employment agreement, payment of bonuses (if any) under the Plans is to be made in the following year. Any such bonuses would be paid in cash in a single lump sum, subject to payroll taxes and tax withholdings. </FONT></P>
<P id=PARA45 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA46 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">In the event of termination of employment of</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"> the Chief Executive Officer or Chief Financial Officer during 2017 by (i) either one of them (X) after complying with the advance notice provision in his respective employment agreement, or (Y) for good reason (as defined in his respective employment agreement), or (ii) the Company without cause (as defined in his respective employment agreement), the bonus </FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">under their respective Plan would be determined on the following basis: (a) all numbers under the &#8220;Target&#8221; column of the Plan would be reduced by a percentage equal to the percent of the year remaining after the date of termination of employment, (b) all non-numerical requirements under the &#8220;Target&#8221; column of the Plan would remain unchanged, (c) the 1.0 and 2.0 multiplier under the &#8220;Target&#8221; column of the Plan would be multiplied by their respective annual base salary for the part of the year prior to the date of termination of employment, and (d) the maximum bonus payable under the discretionary bonus component would be 40% of their respective annual base salary for the part of the year prior to the date of termination of employment.</FONT></P>
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<P id=PARA140.2 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT></P>
<P id=PARA48 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The following is a more detailed description of the Plans as applicable to the Company&#8217;s Chief Executive Officer and Chief Financial Officer. </FONT></P>
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<P id=PARA53 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Weight</B></FONT></P></TD>
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<P id=PARA54 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Objective</B></FONT></P></TD>
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<P id=PARA55 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Target</B></FONT></P></TD>
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<P id=PARA56 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Payout</B></FONT></P></TD></TR>
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<P id=PARA57 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Specified Weighting</FONT></P></TD>
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<P id=PARA58 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Revenue</FONT></P></TD>
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<P id=PARA59 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">0 if actual revenue is less than 90% of thr agreed amount based on the Company&#8217;s 2017 budget approved by the Board (the &#8220;Revenue Target&#8221;).</FONT></P>
<P id=PARA60 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">1.0 if actual revenue is equal to 100% of the Revenue Target. </FONT></P>
<P id=PARA61 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2.0 if actual revenue is greater than 110% of the Revenue Target.</FONT></P></TD>
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<P id=PARA62 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Payout is linear between percentage points (i.e. if the Company achieves 105% of the Revenue Target, 105% of the bonus amount payable upon achievement of such target would be payable). </FONT></P></TD></TR>
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<P id=PARA63 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Specified Weighting</FONT></P></TD>
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<P id=PARA64 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">New Products</FONT></P></TD>
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<P id=PARA65 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">0 if the actual new products revenue is less than an agreed amount determined by the Committee. </FONT></P>
<P id=PARA66 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">1.0 if the actual new products revenue equal to an agreed amount determined by the Committee. &nbsp;</FONT></P>
<P id=PARA67 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2.0 if the actual new products revenue is greater than or equal to an agreed amount determined by the Committee. </FONT></P>
<P id=PARA68 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 36pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA69 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The new products revenues include revenues from the Company&#8217;s VoIP and Mobile segments, as well as revenues for Internet of Things (including home gateway) products (the &#8220; New Products Revenue Categories&#8221;)</FONT></P>
<P id=PARA70 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA71 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">With respect to this new products portion of the bonus, the Committee established minimum revenue thresholds for the New Products Revenue Categories. In the event the minimum revenue threshold is not met for one or more of the New Products Revenue Categories, the payout would be prorated with each New Products Revenue Category representing 33% of the bonus payout for this section. </FONT></P></TD>
<TD style="WIDTH: 20%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<P id=PARA72 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Payout is linear between percentage points.</FONT></P></TD></TR>
<TR>
<TD style="WIDTH: 13%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<P id=PARA73 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Specified Weighting</FONT></P></TD>
<TD style="BORDER-RIGHT: #000000 1px solid; WIDTH: 17.5%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid">
<P id=PARA74 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">EBITDA (excluding restricting and other non-recurring charges)</FONT></P></TD>
<TD style="BORDER-RIGHT: #000000 1px solid; WIDTH: 50.6%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<P id=PARA75 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">0 if EBITDA is less than an agreed amount determined by the Committee.</FONT></P>
<P id=PARA76 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">1.0 if EBITDA is greater than or equal to an agreed amount determined by the Committee.&nbsp;</FONT></P>
<P id=PARA77 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2.0 if EBITDA 1.0 if EBITDA is greater than or equal to an agreed amount determined by the Committee.</FONT></P></TD>
<TD style="WIDTH: 20%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<P id=PARA78 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Payout is linear between percentage points.</FONT></P></TD></TR>
<TR>
<TD style="WIDTH: 13%; VERTICAL-ALIGN: top">
<P id=PARA79 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">20%</FONT></P></TD>
<TD style="BORDER-RIGHT: #000000 1px solid; WIDTH: 17.5%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 1px solid">
<P id=PARA80 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Compensation Committee Discretion</FONT></P></TD>
<TD style="BORDER-RIGHT: #000000 1px solid; WIDTH: 50.6%; VERTICAL-ALIGN: top">
<P id=PARA81 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Committee will apply its discretion based primarily on its evaluation of how management has performed in positioning the Company for future success and enhancement of stockholder value. </FONT></P>
<P id=PARA82 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA83 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The maximum total discretionary bonus is 40% of annual base salary.</FONT></P></TD>
<TD style="WIDTH: 20%; VERTICAL-ALIGN: top">
<P id=PARA84 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Payable at the sole discretion of the Committee.&nbsp;</FONT></P></TD></TR></TABLE>
<P id=PARA86 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<DIV id=PGBK1  style="WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=PGFTR1  style="WIDTH: 100%; TEXT-ALIGN: center">&nbsp;</DIV>
<DIV id=PGNUM1  style="FONT-SIZE: 10pt; WIDTH: 100%; TEXT-ALIGN: center">3</DIV>
<HR style="HEIGHT: 2px; WIDTH: 100%; PAGE-BREAK-AFTER: always; COLOR: #000000" noShade>

<DIV id=PGHDR1  style="WIDTH: 100%; TEXT-ALIGN: left">&nbsp;</DIV></DIV>
<P id=PARA1.2 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT></P>
<P id=PARA87 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><I>Chief Financial Officer </I></FONT></P>
<P id=PARA88 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><I>&nbsp;</I></FONT></P>
<TABLE id=TBL119  style="FONT-SIZE: 10pt; BORDER-TOP: #000000 1px solid; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 100%; BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0px" cellSpacing=0 cellPadding=0 border=0>

<TR>
<TD style="WIDTH: 13%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<P id=PARA89 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Weight</B></FONT></P></TD>
<TD style="BORDER-RIGHT: #000000 1px solid; WIDTH: 17.5%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid">
<P id=PARA90 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Objective</B></FONT></P></TD>
<TD style="BORDER-RIGHT: #000000 1px solid; WIDTH: 50.6%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<P id=PARA91 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Target</B></FONT></P></TD>
<TD style="WIDTH: 20%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<P id=PARA92 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Payout</B></FONT></P></TD></TR>
<TR>
<TD style="WIDTH: 13%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<P id=PARA93 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Specified Weighting</FONT></P></TD>
<TD style="BORDER-RIGHT: #000000 1px solid; WIDTH: 17.5%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid">
<P id=PARA94 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Revenue</FONT></P></TD>
<TD style="BORDER-RIGHT: #000000 1px solid; WIDTH: 50.6%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<P id=PARA95 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">0 if actual revenue is less than 90% of the Revenue Target.</FONT></P>
<P id=PARA96 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">0.6 if actual revenue is equal to 100% of the Revenue Target. </FONT></P>
<P id=PARA97 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">1.2 if actual revenue is greater than 110% of the Revenue Target.</FONT></P></TD>
<TD style="WIDTH: 20%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<P id=PARA98 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Payout is linear between percentage points (i.e. if the Company achieves 105% of the Revenue Target, 105% of the bonus amount payable upon achievement of such target would be payable). </FONT></P></TD></TR>
<TR>
<TD style="WIDTH: 13%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<P id=PARA99 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Specified Weighting</FONT></P></TD>
<TD style="BORDER-RIGHT: #000000 1px solid; WIDTH: 17.5%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid">
<P id=PARA100 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">New Products</FONT></P></TD>
<TD style="BORDER-RIGHT: #000000 1px solid; WIDTH: 50.6%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<P id=PARA101 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">0 if the actual new products revenue is less than an agreed amount determined by the Committee.&nbsp;</FONT></P>
<P id=PARA102 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">0.6 if the actual new products revenue iof equal to an agreed amount determined&nbsp;by the Committee. </FONT></P>
<P id=PARA103 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">1.2 if the actual new products revenue is greater than or equal to an agreed amount determined by the Committee. </FONT></P>
<P id=PARA104 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA105 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">With respect to this new products portion of the bonus, the Committee established minimum revenue thresholds for the New Products Revenue Categories. In the event the minimum revenue threshold is not met for one or more of the New Products Revenue Categories, the payout would be prorated with each New Products Revenue Category representing 33% of the bonus payout for this section. </FONT></P></TD>
<TD style="WIDTH: 20%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<P id=PARA106 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Payout is linear between percentage points.</FONT></P></TD></TR>
<TR>
<TD style="WIDTH: 13%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<P id=PARA107 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Specified Weighting</FONT></P></TD>
<TD style="BORDER-RIGHT: #000000 1px solid; WIDTH: 17.5%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid">
<P id=PARA108 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">EBITDA (excluding restricting and other non-recurring charges)</FONT></P></TD>
<TD style="BORDER-RIGHT: #000000 1px solid; WIDTH: 50.6%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<P id=PARA109 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">0 if EBITDA is less than an agreed amount determined by the Committee.</FONT></P>
<P id=PARA110 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">0.6 if EBITDA is greater than or equal to an agreed amount determined by the Committee. </FONT></P>
<P id=PARA111 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">1.2 if EBITDA 1.0 if EBITDA is greater than or equal to an agreed amount determined by the Committee.</FONT></P></TD>
<TD style="WIDTH: 20%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">
<P id=PARA112 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Payout is linear between percentage points.</FONT></P></TD></TR>
<TR>
<TD style="WIDTH: 13%; VERTICAL-ALIGN: top">
<P id=PARA113 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">20%</FONT></P></TD>
<TD style="BORDER-RIGHT: #000000 1px solid; WIDTH: 17.5%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 1px solid">
<P id=PARA114 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Compensation Committee Discretion</FONT></P></TD>
<TD style="BORDER-RIGHT: #000000 1px solid; WIDTH: 50.6%; VERTICAL-ALIGN: top">
<P id=PARA115 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Committee will apply its discretion based primarily on its evaluation of how management has performed in positioning the Company for future success and enhancement of stockholder value. </FONT></P>
<P id=PARA116 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA117 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The maximum total discretionary bonus is 24% of annual base salary.</FONT></P></TD>
<TD style="WIDTH: 20%; VERTICAL-ALIGN: top">
<P id=PARA118 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Payable at the sole discretion of the Committee.&nbsp;</FONT></P></TD></TR></TABLE>
<P id=PARA120 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA121 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Due to their strategic significance, the Company believes that the disclosure of the 2017 Revenue Target, minimum revenue thresholds for New Products Revenue Categories and EBITDA targets would cause future competitive harm to the Company and therefore are not disclosed. In addition, the Company believes the disclosure of the weightings that apply to the three business objective components within each Plan would cause future competitive harm since the weightings indicate the priority the Company places on its business initiatives and therefore are not disclosed.</FONT></P>
<P id=PARA122 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</P>
<DIV id=PGBK123  style="WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=PGFTR123  style="WIDTH: 100%; TEXT-ALIGN: center">&nbsp;</DIV>
<DIV id=PGNUM123  style="FONT-SIZE: 10pt; WIDTH: 100%; TEXT-ALIGN: center">4</DIV>
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<DIV id=PGHDR123  style="WIDTH: 100%; TEXT-ALIGN: left">&nbsp;</DIV></DIV>
<P id=PARA123.2 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT></P>
<P id=PARA124 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>SIGNATURES</B></FONT></P>
<P id=PARA125 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA126 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 54pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">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.</FONT></P>
<P id=PARA127 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA128 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 54pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA129 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
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<P id=PARA2 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt">&nbsp;</P></TD>
<TD style="WIDTH: 50%">
<P id=PARA3 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt">DSP GROUP, INC.</P></TD></TR>
<TR>
<TD>
<P id=PARA4 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt">&nbsp;</P></TD>
<TD>
<P id=PARA5 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt">&nbsp;</P></TD></TR>
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<P id=PARA6 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt">&nbsp;</P></TD>
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<P id=PARA7 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt">&nbsp;</P></TD></TR>
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<TD>
<P id=PARA8 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt">Date:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;February 9, 2017&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P></TD>
<TD>
<P id=PARA9 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt">By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>/s/ Dror Levy</U></P></TD></TR>
<TR>
<TD>&nbsp;</TD>
<TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dror Levy<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chief Financial Officer<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and Secretary</TD></TR></TABLE>
<P id=PARA130 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></FONT>&nbsp;</P>
<P style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; LINE-HEIGHT: 1.25">&nbsp;</P>
<P style="MARGIN-BOTTOM: 0px; TEXT-ALIGN: center; MARGIN-TOP: 0px; LINE-HEIGHT: 1.25">5</P></BODY></HTML>
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dspg20170209_8k.htm
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 5, 2017
DSP GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
1-35256
(Commission File Number)
94-2683643
(I.R.S. Employer Identification No.)
161 S. San Antonio Road, Suite 10
Los Altos, CA
(Address of Principal Executive Offices)
94022
(Zip Code)
408/986-4300
(Registrant's Telephone Number, Including Area Code)
With a copy to:
Jaclyn Liu, Esq.
Morrison & Foerster
llp
425 Market Street
San Francisco, CA 94105
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))
ITEM 5.02
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DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
On February 5, 2017, the Compensation Committee (the "Committee") of the Board of Directors (the "Board") of DSP Group, Inc. (the "Company") approved a 2017 Performance-Based Bonus Plan applicable for the Chief Executive Officer and Chief Financial Officer of the Company (individually, a "Plan" and collectively, the "Plans"). Each of the Plans is effective as of January 1, 2017.
The following is a description of the Plans 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.
Pursuant to the Plans, the payment of bonuses is based upon the Company's achievement of four separate components, three of which are based on business objectives and one is at the discretion of the Committee. Each component has a specified weighting and such weighting differs among the Plans; provided that the discretionary component is weighted 20% in each of the Plans. No bonus would be payable based on the achievement of the business objective components if the Company's 2017 earnings before interest, taxes, depreciation and amortization ("EBITDA"), excluding any restricting and non-recurring charges to be determined by the Committee, are less than a specified amount set forth in the Plans as determined by the Committee.
The cap for the bonus payout under the Plan for the Chief Financial Officer is 1.0x of his annual base salary and the cap for the Chief Executive Officer under the Plan is 2.0x of his annual base salary.
Other than under the circumstances whereby there is a change of control transaction involving the Company, or termination of employment under specified circumstances as set forth in the employment agreement, payment of bonuses (if any) under the Plans is to be made in the following year. Any such bonuses would be paid in cash in a single lump sum, subject to payroll taxes and tax withholdings.
In the event of termination of employment of
the Chief Executive Officer or Chief Financial Officer during 2017 by (i) either one of them (X) after complying with the advance notice provision in his respective employment agreement, or (Y) for good reason (as defined in his respective employment agreement), or (ii) the Company without cause (as defined in his respective employment agreement), the bonus
under their respective Plan would be determined on the following basis: (a) all numbers under the "Target" column of the Plan would be reduced by a percentage equal to the percent of the year remaining after the date of termination of employment, (b) all non-numerical requirements under the "Target" column of the Plan would remain unchanged, (c) the 1.0 and 2.0 multiplier under the "Target" column of the Plan would be multiplied by their respective annual base salary for the part of the year prior to the date of termination of employment, and (d) the maximum bonus payable under the discretionary bonus component would be 40% of their respective annual base salary for the part of the year prior to the date of termination of employment.
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The following is a more detailed description of the Plans as applicable to the Company's Chief Executive Officer and Chief Financial Officer.
Chief Executive Officer
Weight
Objective
Target
Payout
Specified Weighting
Revenue
●
0 if actual revenue is less than 90% of thr agreed amount based on the Company's 2017 budget approved by the Board (the "Revenue Target").
●
1.0 if actual revenue is equal to 100% of the Revenue Target.
●
2.0 if actual revenue is greater than 110% of the Revenue Target.
Payout is linear between percentage points (i.e. if the Company achieves 105% of the Revenue Target, 105% of the bonus amount payable upon achievement of such target would be payable).
Specified Weighting
New Products
●
0 if the actual new products revenue is less than an agreed amount determined by the Committee.
●
1.0 if the actual new products revenue equal to an agreed amount determined by the Committee.
●
2.0 if the actual new products revenue is greater than or equal to an agreed amount determined by the Committee.
The new products revenues include revenues from the Company's VoIP and Mobile segments, as well as revenues for Internet of Things (including home gateway) products (the " New Products Revenue Categories")
With respect to this new products portion of the bonus, the Committee established minimum revenue thresholds for the New Products Revenue Categories. In the event the minimum revenue threshold is not met for one or more of the New Products Revenue Categories, the payout would be prorated with each New Products Revenue Category representing 33% of the bonus payout for this section.
Payout is linear between percentage points.
Specified Weighting
EBITDA (excluding restricting and other non-recurring charges)
●
0 if EBITDA is less than an agreed amount determined by the Committee.
●
1.0 if EBITDA is greater than or equal to an agreed amount determined by the Committee.
●
2.0 if EBITDA 1.0 if EBITDA is greater than or equal to an agreed amount determined by the Committee.
Payout is linear between percentage points.
20%
Compensation Committee Discretion
The Committee will apply its discretion based primarily on its evaluation of how management has performed in positioning the Company for future success and enhancement of stockholder value.
The maximum total discretionary bonus is 40% of annual base salary.
Payable at the sole discretion of the Committee.
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Chief Financial Officer
Weight
Objective
Target
Payout
Specified Weighting
Revenue
●
0 if actual revenue is less than 90% of the Revenue Target.
●
0.6 if actual revenue is equal to 100% of the Revenue Target.
●
1.2 if actual revenue is greater than 110% of the Revenue Target.
Payout is linear between percentage points (i.e. if the Company achieves 105% of the Revenue Target, 105% of the bonus amount payable upon achievement of such target would be payable).
Specified Weighting
New Products
●
0 if the actual new products revenue is less than an agreed amount determined by the Committee.
●
0.6 if the actual new products revenue iof equal to an agreed amount determined by the Committee.
●
1.2 if the actual new products revenue is greater than or equal to an agreed amount determined by the Committee.
With respect to this new products portion of the bonus, the Committee established minimum revenue thresholds for the New Products Revenue Categories. In the event the minimum revenue threshold is not met for one or more of the New Products Revenue Categories, the payout would be prorated with each New Products Revenue Category representing 33% of the bonus payout for this section.
Payout is linear between percentage points.
Specified Weighting
EBITDA (excluding restricting and other non-recurring charges)
●
0 if EBITDA is less than an agreed amount determined by the Committee.
●
0.6 if EBITDA is greater than or equal to an agreed amount determined by the Committee.
●
1.2 if EBITDA 1.0 if EBITDA is greater than or equal to an agreed amount determined by the Committee.
Payout is linear between percentage points.
20%
Compensation Committee Discretion
The Committee will apply its discretion based primarily on its evaluation of how management has performed in positioning the Company for future success and enhancement of stockholder value.
The maximum total discretionary bonus is 24% of annual base salary.
Payable at the sole discretion of the Committee.
Due to their strategic significance, the Company believes that the disclosure of the 2017 Revenue Target, minimum revenue thresholds for New Products Revenue Categories and EBITDA targets would cause future competitive harm to the Company and therefore are not disclosed. In addition, the Company believes the disclosure of the weightings that apply to the three business objective components within each Plan would cause future competitive harm since the weightings indicate the priority the Company places on its business initiatives and therefore are not disclosed.
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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.
DSP GROUP, INC.
Date:     February 9, 2017
By:
/s/ Dror Levy
Dror Levy
Chief Financial Officer
and Secretary
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