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(1)

Based on the total number of DSP Group common stock outstanding as of September 30, 2002 and options to purchase DSP Group common stock outstanding as of September 30, 2002 which are exercisable prior to October 22, 2002.

(2)

Estimated solely for the purpose of calculating the registration fee and, pursuant to Rule 457(f)(2) under the Securities Act, is based upon the book value of the Common Stock computed as of June 30, 2002.

(3)

Previously paid.

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Provide an integrated solution.    We seek to maximize our competitive advantage by focusing on providing integrated solutions, both for our programmable DSP cores and our application-level IP platforms, and we intend to continue to invest in the development of technology for complete systems in our target markets.

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Enhance our expertise.    We seek to maximize our expertise in DSP, analog, mixed-signal and related software technology, and to capitalize on that expertise to address critical customer demands. We intend to enhance our existing DSP cores and IP platforms with additional features and performance, while developing new offerings that will focus on other emerging applications across the range of end markets we serve.

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Target top-tier customers.    We seek to strengthen relationships and expand licensing and royalty arrangements with our existing customers and to extend our customer base with other key industry companies in order to facilitate the development of our technology. We believe that we can achieve the best results by targeting our sales and marketing activities at high-volume semiconductor companies and leading OEMs with a track record of successful end-user product deployments. Parthus and Ceva together have entered into license agreements with nine of the top ten semiconductor companies worldwide.

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Focus on large and fast-growing markets.    We believe that our expertise in programmable DSP cores and platform-level IP allows us to target fast-growing segments within the consumer electronics market, such as wireless communications, mobile computing, automotive electronics, and consumer entertainment. We intend to strengthen our relationships and expand licensing and royalty arrangements with customers in those markets and to extend our customer base with key industry leaders within each of those segments.

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Take advantage of the industry shift towards open-standard architectures.    We believe that the industries in which we compete are moving away from proprietary IP solutions towards open-standard architectures, and that this trend creates an opportunity for providers of licensable DSP cores and platform-level IP. As a consequence, we intend to use our expertise to create leading products and services in critical open standards fields, such as Bluetooth, GPS and multimedia, to position ourselves to take advantage of this trend. We also participate in the development of industry standards in these and other emerging technology areas.

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Focus on a portfolio approach to the licensing of our IP platforms.    We seek to differentiate ourselves through the breadth of our IP offerings and our ability to integrate these offerings into a single solution built around our family of state-of-the-art DSP cores. In tandem with targeting top-tier customers, we intend to focus on offering a variety of solutions. Our product architecture is designed to allow multiple platforms to reside on the same piece of silicon, significantly reducing the cost and complexity of integration while simultaneously improving power dissipation and time to market for next-generation devices. This approach enables our customers to develop product solutions for next-generation devices that incorporate multiple functions. This approach will also provide our customers with the benefits of “one-stop shopping” and a technology roadmap for the next generation of multi-functional devices.

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Establish, maintain and expand relationships with key technology providers.    We have established and seek to expand our close working relationships with:

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contract semiconductor companies, usually referred to as silicon foundries, in order to assure adequate supplies of chips for our customers who purchase our technology in chip form and in order to give our other OEM customers a means of obtaining competitive manufacturing capabilities;

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third-party suppliers of block-level semiconductor IP, in order to have access to their most current technologies; and

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developers of both application-level and system-level software so that we can continue to offer complete platform solutions.

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We will be able to focus on developing our business and pursuing strategic opportunities in the licensing of technology to third parties, increase our research and development efforts, better target our markets, and focus our sales and support infrastructures in different markets than those of DSP Group.

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As a stand-alone, independent company, our management will be able to devote time and energy exclusively to our business.

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We plan to make our technology accessible to all potential users, free of competitive considerations faced by DSP Group.

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Our employees will be motivated by incentive compensation programs tied to the market performance of our common stock.

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As a more focused company, we expect to be able to make decisions more quickly, deploy resources more rapidly and efficiently and enhance our responsiveness to customers and partners.

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We expect to have direct access to the capital markets to issue debt or equity securities and to grow through acquisitions.

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labor, tax, employee benefit, indemnification and other matters arising from our separation from DSP Group;

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intellectual property matters;

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employee retention and recruiting;

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the nature, quality and pricing of transitional services DSP Group has agreed to provide us; and

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business opportunities that may be attractive to both DSP Group and us.

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corporate-level taxable gain would be recognized by DSP Group in an amount equal to the difference between the market value of the Ceva’s common stock at the time of distribution to the DSP Group stockholders and DSP Group’s basis in that stock (and the tax would be determined by multiplying such gain by DSP Group’s net effective tax rate at the time of the distribution (currently approximately 38%)); and

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each holder of DSP Group’s common stock who received shares of our common stock in the distribution would be treated as having received a dividend taxable as ordinary income in an amount equal to the fair market value of our common stock received (assuming that DSP Group had sufficient current or accumulated “earnings and profits”). Dividends paid to holders that are U.S. corporations may be eligible for the dividends received deduction. For certain holders of DSP Group common stock — mainly non-U.S. stockholders — the dividend may be subject to withholding at a rate of 30%, or less if there is a lower rate under an applicable treaty. To the extent the distribution exceeds a DSP Group stockholder’s ratable portion of the current or accumulated earnings and profits of DSP Group, such distribution would be a non-taxable return of capital to the extent of the basis in such stockholder’s DSP Group common stock, and capital gain (if the DSP Group common stock is held by the stockholder as a capital asset) to the extent the amount distributed exceeds such basis.

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retaining and integrating management, engineering and other key employees of each of Ceva and Parthus;

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retaining existing customers, suppliers, distributors, licensees, vendors and others that have historically done business with Ceva or Parthus;

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integrating sales efforts so that customers can do business easily with the combined company; and

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preventing delays in ongoing research and development activities to permit efficient time-to-market introductions and time-to-volume production for acquired products and new technologies.

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impairment and/or loss of relationships with employees, customers, suppliers, distributors, licensees, vendors and others that have historically done business with Ceva or Parthus;

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adverse financial results associated with integration of the two businesses, including unanticipated expenses related to the integration and deployment of acquired technologies; and

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disruption of our business and distraction of our management.

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ParthusCeva’s technology may not be as robust as expected or may not achieve the expected performance, features or product yield;

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ParthusCeva’s intellectual property, including its patent portfolio, may not be as valuable as expected; and

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the value of the combination may not be accretive.

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difficulties integrating acquired operations, personnel, technologies or products;

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diversion of management’s focus from our core business concerns;

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write-offs related to acquired assets, including write-offs related to impairment of goodwill and other intangible assets; and

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dilution to existing stockholders and earnings per share.

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timely introduction, demand and market acceptance of new or enhanced products;

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new product announcements and introductions by competitors;

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supply constraints for and changes in the cost of components incorporated in our products;

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timing and volume of orders and production;

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gain or loss of significant customers, licensees, distributors and suppliers; and

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changes in our pricing policies and those of our competitors and suppliers.

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potential dilutive issuances of equity securities;

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the incurrence of debt and contingent liabilities;

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amortization of intangibles and impairment of goodwill;

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research and development write-offs; and

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other acquisition-related expenses.

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respond to new technologies or technical standards;

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react to changing customer requirements and expectations;

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devote needed resources to the development, production, promotion and sale of products; or

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deliver competitive products at lower prices.

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allocate a portion of their manufacturing capacity to our needs;

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produce acceptable quality silicon wafers and chips with acceptable manufacturing yields; and

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deliver chips on a timely basis at a competitive price.

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negative market reaction to the separation of the DSP cores licensing business from DSP Group;

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negative market reaction to the combination of Parthus and Ceva;

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quarterly variations in our operating results;

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changes in revenue or earnings estimates or publication of research reports by analysts;

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speculation in the press or investment community;

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strategic actions by us or our competitors, such as acquisitions or restructurings;

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actions by institutional stockholders;

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general market conditions; or

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domestic and international economic factors unrelated to our performance.

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Greater Strategic Focus.    DSP Group designs, manufactures and markets DSP integrated circuit devices for highly-integrated digital cordless phones, Internet telephony devices and other digital speech products. Our focus for the DSP cores licensing business will be on developing businesses and strategic opportunities in the licensing of technology to third parties for the manufacturing of these products. Our separation from DSP Group and the subsequent combination with Parthus will allow the board of directors, management team and employees of the combined company to focus specifically on our business and strategic opportunities. As a combined entity separate from DSP Group, we will have a greater ability to modify our business processes and organization to fulfill our goals with respect to enhanced research and development and the creation of targeted markets and sales and support infrastructures that better accommodate the needs of our business, customers and employees.

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Greater Management Focus.    As a stand-alone, independent company, our management can devote time and energy exclusively to our business. Our business requires a significant amount of executive attention at the sales and marketing level because license agreements are typically not finalized without the involvement of a sophisticated negotiator. The separation will enable our management team to focus on the licensing business without the distractions of the competing needs of DSP Group’s business.

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Avoid Conflicts of Interest.    As a licensor of intellectual property, we can make our technology accessible to all potential users. Our relationship with DSP Group raised competitive considerations for both DSP Group and potential customers of the products of the DSP cores licensing business, including direct competitors of DSP Group. We believe our separation from DSP Group will enable us to enter into license agreements with direct competitors of DSP Group, to offer more competitive agreements to potential customers, and to enter into mergers, joint ventures and technology development relationships as the opportunities present themselves.

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Better Incentives for Employees and Greater Accountability.    We expect the motivation of our employees and the focus of our management will be strengthened by incentive compensation programs tied to the market performance of our common stock. Our separation from DSP Group and combination with Parthus will enable us to offer our employees compensation directly linked to the performance of our business, which we expect to enhance our ability to attract and retain qualified personnel.

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Increased Speed and Responsiveness.    As a stand-alone company, we expect to be able to make decisions more quickly, deploy resources more rapidly and efficiently and operate with more agility than we could as a part of a more diverse organization. In addition, we expect to enhance our responsiveness to the needs of our customers and partners.

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Direct Access to Capital Markets.    As a separate company, we will have direct access to the capital markets to finance our operational and financial requirements, including growth through acquisitions.

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a technology transfer agreement whereby DSP Group transfers and/or assigns certain technology, third party licenses and other contracts to Ceva;

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a technology transfer assignment and assumption agreement whereby Ceva transfers and/or assigns the technology, as well as its rights under the transfer agreement, to DSP Ceva, Inc.;

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a technology transfer agreement whereby DSP Group, Ltd. transfers and/or assigns certain technology, third party licenses and other contracts to Corage, Ltd.;

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a transition services agreement between DSP Group, Ltd. and Corage, Ltd.; and

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a tax indemnification and allocation agreement between DSP Group and Ceva.

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liquidate or dispose of all or a substantial portion of our “active trade or business” as defined in the separation agreement;

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discontinue the conduct of our “active trade or business”; or

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except in accordance with the provisions of the separation agreement, dispose of any business or assets that would cause us to be operated in a manner inconsistent in any material respect with the business purposes of the distribution as set forth in the representation letter sent to, and the tax rulings issued by, the Internal Revenue Service in connection with the separation and distribution; and

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the failure to pay, perform or discharge any liabilities for which it is responsible under the separation agreement;

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the breach by it or any of its affiliates of the terms of the separation agreement and the ancillary agreements associated with the separation agreement; and

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the breach by it or any of its affiliates of any of the covenants or obligations in the combination agreement or any other documents or instruments executed or delivered by that party in connection with the separation, distribution and combination. These rights and obligations shall survive until the second anniversary following the distribution date. The amount of any claims for indemnification will be reduced by the amount of any insurance proceeds. There are no other limitations on the rights and obligations relating to the amount of any claim for indemnification.

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the parties will make a good-faith effort to first resolve the dispute through negotiation;

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in connection with these attempts to resolve the dispute, the parties may agree to attempt to resolve the dispute through non-binding mediation; and

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after certain events occur as described in the separation agreement, the parties can resort to binding arbitration. In addition, under limited circumstances any party acting in good faith may initiate litigation in lieu of complying with the arbitration provisions of the separation agreement.

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permitting dedicated management to focus on that line of business;

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eliminating potential lack of focus and customer confusion with respect to the DSP Group product business;

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presenting the opportunity for the DSP cores licensing business to obtain financing through third party sources or strategic relationships; as well as

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offering targeted employment incentives through the creation of separate equity incentive plans.

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DSP cores, which provide the processing capability for digital electronic devices; and

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platform applications that make DSP technology useful to manufacturers of digital electronic devices.

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eliminating the disparity in value between the entities;

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providing adequate levels of working capital for the DSP cores licensing business; and

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providing a return of capital to Parthus shareholders.

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Immediately prior to the combination with Ceva, Parthus distributed to its shareholders an aggregate capital repayment of $60 million in cash.

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The existing Parthus shares were then cancelled and each Parthus shareholder received new shares of ParthusCeva’s common stock.

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Immediately following the combination, the stockholders of DSP Group and the former shareholders of Parthus own approximately 50.1% and 49.9%, respectively, of the common stock of ParthusCeva.

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ParthusCeva assumed all outstanding Parthus share options and the option plans and option agreements that govern them. These options continue with the same terms and conditions, except that they have become options to purchase shares of ParthusCeva’s common stock and have been adjusted in the manner set forth below. Option holders will no longer be able to obtain Parthus shares or ADSs upon exercise of such options.

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The number of shares of ParthusCeva’s common stock purchasable upon the exercise of each Parthus option is equal to the number of Parthus shares underlying the option, adjusted to take into account the conversion of Parthus shares into ParthusCeva shares. The exercise price per share was also adjusted proportionately and further adjusted as described below.

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on an actual basis (not giving effect to the contribution and combination described below);

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pro forma to give effect to:

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the contribution of the DSP cores licensing business of DSP Group to us, including a sum of $40 million in cash and $2.5 million in other assets, plus the amount by which the transaction costs of the separation and combination exceed $2 million, as though it had occurred on June 30, 2002;

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the combination of Ceva and Parthus as though it had closed on June 30, 2002;

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the results of the cancellation of certain shares of Ceva’s common stock in connection with its separation from DSP Group; and

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the repricing of certain Parthus options, including changes made as a result of Parthus’ $60 million cash repayment of capital to the Parthus shareholders.

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2,517,020 (1,135,035 pro forma) shares of our common stock subject to outstanding options under our 2000 Stock Incentive Plan at a weighted average exercise price of $5.54 per share ($12.29 per share pro forma);

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3,482,980 (1,570,629 pro forma) shares of our common stock available for issuance pursuant to our 2000 Stock Incentive Plan. No option grants will be made under our 2000 Stock Incentive Plan following the distribution;

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2,210,155 shares of DSP Group’s common stock (736,718 shares of Ceva’s common stock pro forma) will be subject to options to be granted on the distribution date to holders of options to purchase shares of DSP Group’s common stock.

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3,991,622 (1,800,000 pro forma) shares of our common stock available for issuance pursuant to our 2002 Stock Incentive Plan;

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2,217,568 (1,000,000 pro forma) shares of our common stock available for issuance pursuant to our 2002 Employee Stock Purchase Plan; and

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The pro forma share numbers above also exclude 1,644,435 additional shares of our common stock that will be subject to options to be assumed by us in connection with the combination with Parthus. As of June 30, 2002, there were outstanding options to purchase an aggregate of 107,799,111 ordinary shares of Parthus.

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Assuming all ordinary shares were held in the form of ADSs

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DSP Group executives will hold the positions of Chairman of the board of directors; Executive Vice President—Business Development and Chief Technology Officer; Vice President and General Manager of the DSP Intellectual Property Licensing Division; and Chief Scientist—DSP Technologies.

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Parthus executives will hold the positions of President and Chief Executive Officer, who will also be a board member of ParthusCeva; Vice Chairman; and Chief Financial Officer.

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Significant under performance relative to expected historical or projected future operating results;

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Significant changes in the manner of our use of the acquired assets or the strategy for our overall business; and

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Significant negative industry or economic trends.

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support more rapid expansion of the business of the new combined company than we currently anticipate;

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develop and introduce new or enhanced DSP core designs or services;

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respond to competitive pressures;

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invest in or acquire complementary businesses or technologies; or

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respond to unanticipated requirements or developments.

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significant underperformance relative to expected historical or projected future operating results;

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significant changes in the manner of Parthus’ use of the acquired assets or the strategy for Parthus’ overall business;

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significant negative industry or economic trends;

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significant decline in Parthus’ stock price for a sustained period; and

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changes in the ratio of Parthus’ market capitalization to net book value.

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technological feasibility had not been established at the acquisition date;

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there was no alternative future use and;

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the fair value was estimable with reasonable certainty.

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Second-generation (2G), “second-and-a-half”-generation (2.5G) and third-generation (3G) cellular telephones—cellular telephones that combine voice communications and high-speed data transmission capabilities, permitting access to the Internet and other advanced features;

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Internet-enabled personal digital assistants, or PDAs—hand-held devices that incorporate electronic calendars, address books and remote access to the Internet and other data networks;

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“Intelligent” pagers—personal paging devices that incorporate advanced data communications features, such as access to e-mail, news, weather and stock quotes;

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Global positioning system (GPS) devices—devices used in automobiles, wireless connections for personal computers and industrial controls accessed through wireless Internet connections;

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Other internet devices—products such as laptop computers, set-top boxes, Internet appliances and gaming consoles, which are increasingly connected to the Internet via either broadband wireless technologies or wireless local area network (W-LAN) technologies;

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Hard drive controllers—the devices which control the reading and writing of data for personal computers;

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Voice over packet gateways and clients—products for Voice-Over Internet Protocol (VoIP) and Voice-Over Broadband (VoB) applications;

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wireline telecommunications applications—applications such as digital subscriber line (DSL);

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automotive applications;

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consumer audio devices—products such as MP3 players; and

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digital still cameras.

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permits high-data-rate communications in conformity with industry standards;

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allows the integration of more advanced features at reasonable prices by combining functions on a single system-on-a-chip; and

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helps speed time to market by reducing product development time through design reuse.

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An extensive IP portfolio.    Our IP portfolio spans the bulk of mobile Internet, wireless application and multimedia technologies, as well as a suite of programmable DSP cores. This portfolio often allows us to provide a customer with the required solution with reduced development cost, complexity and risk, therefore reducing the customer’s time to market.

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The ability to deliver complete system solutions.    Our broad IP portfolio allows us to provide our customers with complete solutions at the system level, including application-specific IP platforms and general-purpose DSP cores. Our company combines the expertise of a provider of DSP architectures with the expertise of a supplier of complete platform level-IP solutions, which we believe strongly positions us to become a leading supplier of open-standard IP solutions to the industry.

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Flexible IP deployment and support.    To meet specific customer circumstances and requirements, we intend to offer system-level solutions composed of our IP platforms built around our DSP cores, as well as to license our platforms and cores as stand-alone offerings. We make our solutions available in the form of licensed intellectual property rights, dedicated development projects, or “hard IP” embodied in silicon chips or circuit boards. In addition, we offer our licensees specialized intellectual property integration support. We believe that this flexibility facilitates the adoption and integration of our intellectual property.

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Leading-edge technology.    Our licensing relationships with a number of leading semiconductor companies and OEMs, as well as our communications with potential customers, help to assure that we are developing additional intellectual property that meets market requirements as they evolve. A number of our employees also participate actively in international standards-setting bodies in order to influence and learn about new technological developments.

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The ability to provide a production-ready solution.    We fully test the platforms and DSP cores we provide so that they are ready for product integration. In addition, we utilize third-party foundries that manufacture chips to our design. These relationships allow us to assure our customers access to low-cost production.

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A diverse and experienced research and development staff.    We have approximately 227 employees engaged in product development in a broad range of areas, including analog, digital, software, mixed-signal and digital signal processing technology. We believe that the breadth of knowledge, experience, and stability of our workforce allow us to provide better and faster services to our customers, and to maintain and develop our core intellectual property efficiently.

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Provide an integrated solution.    We seek to maximize the competitive advantage provided by our ability to offer an integrated IP solution—including communications, applications and multimedia IP built around our DSP processor core architectures. We believe that this integrated solution will favorably position us to capitalize on what we believe is the industry trend towards the licensing of open-standard IP architectures.

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Take advantage of the industry shift towards open-standard architectures.    We believe that the industry trend away from proprietary IP towards open-standard architectures creates an opportunity for providers of licensable DSP cores and platform-level IP. As a consequence, we intend to use our expertise in critical open standards fields, such as Bluetooth, GPS and multimedia, in order to position ourselves to take advantage of this trend. Towards this end, we have participated and intend to continue to participate in the development of industry standards in these and other emerging technology areas.

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Focus on a portfolio approach to the licensing of our IP platforms.    We seek to differentiate ourselves through the breadth of our IP offerings and our capability to integrate these offerings into a single solution built around our family of state-of-the-art DSP cores. We intend to continue to expand our portfolio of broadband wireless solutions (2G, 2.5G, 3G), wireless local area networking solutions (802.11, Bluetooth), and key application and multimedia solutions (including audio, multimedia, GPS and smartphone technologies).

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Focus on convergence of technologies through an open architecture.    We seek to ensure that our platforms, as well as other third-party IP, can be rapidly integrated into a single integrated circuit through adherence to the specifications of our open, flexible and highly power-efficient architectures.

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Maximize our expertise.    We seek to maximize our expertise in DSP, analog, mixed-signal and radio frequency technology and to use that expertise to address critical customer demands. We intend to enhance our existing DSP cores and IP platforms with additional features and performance, while developing new offerings that will focus on other emerging applications across the range of end markets we serve.

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Target top-tier customers.    We seek to strengthen relationships and expand licensing and royalty arrangements with our existing customers and to extend our customer base with key industry companies in order to facilitate the development of our technology. We believe that we can achieve the best rate of return on our investment in technology by targeting our sales and marketing activities at high-volume semiconductor companies and leading electronic product manufacturers with a track record of

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Focus on large and fast-growing markets.    We believe that our expertise in programmable DSP cores and platform-level IP favorably positions us to target fast-growing segments within the consumer electronics market, such as wireless communications, mobile computing, automotive electronics, and consumer entertainment. We intend to strengthen our relationships and expand licensing and royalty arrangements with customers in those markets and to extend our customer base with key industry leaders within each of those segments. We believe that we can achieve the best results by targeting our sales activities at leaders within those markets.

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Establish, maintain and expand relationships with key technology providers.    We have established and seek to expand our close working relationships with:

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contract semiconductor companies, usually referred to as silicon foundries, in order to assure adequate supplies of chips for our customers who purchase our technology in chip form and in order to give OEMs a means of obtaining competitive manufacturing capabilities;

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third-party suppliers of block-level semiconductor intellectual property, in order to have access to their most current technologies; and

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developers of both application-level and system-level software so that we can continue to offer complete platform solutions.

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PineDSPCore.    Introduced in 1991, the PineDSPCore was the first DSP core we developed. Due to its small die size and compact instruction code, it has been primarily used for low-end, high-volume applications, including digital answering machines, fax machines, low-speed modems and hard disk drive controllers. We currently generate revenues from the PineDSPCore, although we are no longer actively promoting it.

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OakDSPCore.    The OakDSPCore’s hardware units are operative through a set of soft cores known as an instruction set, which is a central processing unit (CPU) type instruction allowing the core to also

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TeakLite.    TeakLite is a “soft core” which significantly facilitates its incorporation of its design into a licensee’s chip and foundry specifications. TeakLite offers the same instruction set as OakDSPCore; it is superior to the OakDSPCore in terms of portability, operating speed and power consumption. TeakLite is primarily designed for 2G and 2.5G cellular telephones, modems, consumer multimedia (digital still cameras and audio appliances, including MP3 players), hard disk drive controllers and voice-over IP applications.

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Teak.    Like TeakLite, Teak is a “soft core” and is designed with a focus on power reduction features. The Teak offers high performance, the ability to process multiple instructions in parallel and excellent code density, making it well suited for 2.5G and 3G cellular telephones, broadband modems and consumer multimedia applications.

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PalmDSPCore.    With faster processing capabilities and the ability to process multiple instructions in parallel, PalmDSPCore is a sub-family of three DSP soft cores designed to meet the high-performance, low-cost and low-power requirements of a range of applications. These include 2.5G cellular telephones, broadband modems, and voice-over packet network gateways, for which we offer a 16-bit core, and consumer audio and video applications, for which we offer 20-bit and 24-bit cores.

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XpertTeak.    XpertTeak is a highly integrated, low power Teak core-based DSP sub-system. In addition to the Teak core, it incorporates advanced peripherals and a system interface set, such as direct memory accesses (DMA) controllers, timers, power consumption management units, serial ports and CPU interfaces.

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Low power consumption.    Our cores have been designed to satisfy low power consumption requirements—a key feature of products that rely on batteries, such as cell phones and portable audio products, or are sensitive to power dissipation, such as telecommunications equipment.

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Low cost.    Our technology is designed to address the cost requirements for high volume, highly competitive applications through reduced chip size (by carefully selecting functions we offer and also by allowing multiple functions to be placed on one chip) and minimization of the size of required memory.

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Flexibility.    Our open, “soft-core” DSP architecture allows our licensees to differentiate their products, in particular through software. It allows the licensees to create diversified versions of their embedded intellectual property solutions, reuse the same chip design for multiple generations of products and select different physical library vendors or silicon suppliers. In addition, because of our “soft-core” architecture, our cores can be easily integrated across multiple semiconductor manufacturing processes with different geometry technologies.

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Improved time to market.    Our technology shortens the typical semiconductor design cycle and improves our customers’ time to market by shortening the process of porting the core design to physical hardware layout, and by providing an efficient environment for designing the software to be used in our core designs.

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Tightly coupled development tools and architecture.    We provide our licensees with both DSP cores and the related software development and hardware emulation tools to assist in product development, which speeds their development process.

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voice compression, by which digitally encoded speech is processed to take up less storage space and transmission bandwidth;

•

echo cancellation, which involves the elimination of echoes in two-way transmissions;

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dual-tone multiple frequency (DTMF) algorithms, which produce tones that are generated when pressing buttons on touch-tone telephones;

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caller ID, which is a telephone company service that identifies the caller’s telephone number to the party that is called; and

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fax, which involves the processing and transmission of fax information over packet network.

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BlueStream.    BlueStream is highly functional platform supporting Bluetooth communications—an emerging standard for wireless communications among electronic devices over short distances. This platform includes a comprehensive radio component; a digital baseband, offered both in baseband IP and as a full system-on-a-chip; and a complete software stack designed for baseband and host interface.

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MediaStream.    MediaStream is an advanced Internet audio technology enabling a range of mobile multimedia applications, including mobile phones, MP3 players, game consoles and high-fidelity in-car entertainment systems.

•

NavStream.    NavStream is a complete GPS platform delivering precise location information (less than five meters within five seconds) to any device, including mobile phones, personal digital assistants (PDAs), and GPS-enabled vehicles, anywhere in the world. One of the key differentiators of the NavStream platform is its ability to track GPS signals and determine a user’s location indoors. NavStream is one of the few technologies that comply with the U.S. Federal Communications Commission’s e-911 Location Accuracy Directive, which requires that all mobile telephones enable the location of the caller to be determined to within 150 meters.

•

InfoStream.    InfoStream is a mobile computing platform for the next generation of wireless devices, including 3G “smart” cellular phones, PDAs, Internet appliances and home entertainment/multimedia devices. The platform was developed in conjunction with Psion and delivers high performance, low power consumption and high levels of on-chip integration.

•

MobiStream.    MobiStream is an advanced platform for applications using the GPRS (general packet radio services) mobile communications standard. This platform combines high data rates and integrated multimedia on low baseband power consumption solutions.

•

In8Stream.    In April 2002, we announced the launch of In8Stream, a multi-mode wireless local area network (WLAN) platform employing the 802.11 standard for wireless communications between electronic devices over short distances. In8Stream targets the entire range of 802.11 WLAN standards through a single, flexible architecture.

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Back-end support.    Our computer aided design (CAD) team develops in-house design flows. The team provides each design group working on a development project a template identifying which CAD tools to use to meet its specific design goals. The team also writes software to assure that the identified tools can be used on an integrated and seamless basis. In addition, a team of layout engineers with experience in digital, analog, radio frequency and system-on-a-chip layout processes determines the physical layout requirements for each project.

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System integration laboratory.    We have an in-house capacity to test the performance of our intellectual property as embodied in silicon against a variety of parameters. This capability enables us to perform complete system-level product development combining our integrated circuit and software intellectual property.

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Initial license fees.    Initial license fees are typically non-refundable and are generally paid in installments upon reaching defined development milestones. Our licenses are typically perpetual in duration but may in some cases be limited to fixed terms.

•

Re-use license fees.    A re-use license fee is payable for each new product that incorporates technology previously licensed from us. Re-use license fees are payable when a licensee sends a design using our intellectual property for manufacture in a subsequent product. Alternatively, licensees may pay a one-time buyout fee in lieu of subsequent re-use fees.

•

Per-unit royalties.    A per-unit royalty is paid for each product incorporating our intellectual property that is sold, supplied or distributed by the licensee. These royalties are calculated either as a percentage of the licensee’s sale price per product or as a fixed amount per unit sold. We generally give volume pricing to our licensees, and our per unit royalties rate under a license will go down as more products incorporating our intellectual property are shipped. As products incorporating our technology are brought to market, we expect revenue from royalties to increase. We have no control, however, over when our customers will ultimately bring such products to market. Some of our licenses include prepaid royalties, in which a customer pays the royalties on a certain minimum number of products at the time we sign the license, which are typically non-refundable.

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Support and maintenance.    We generally require licensees to pay a quarterly support and maintenance fee for a minimum of two years for integrated circuits and three years for software. After that mandatory period, the customer may extend the support and maintenance agreement on an annual basis.

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technical support, consisting of assisting with implementation, responding to customer specific inquiries, training and, when and if they become available, distributing updates and upgrades of our products;

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application support, consisting of providing general hardware and software design examples, ready to use software modules and guidelines to our licensees to assist them in using our technology; and

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design services, consisting of creating customer specific implementations of our DSP cores. These revenues have not been significant to date.

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Product improvement is the process of making incremental modifications to our SmartCores designs that enhance their performance and ease of implementation. In addition, we continuously enhance our development tools by adding features to improve the productivity of the software development process.

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Next-generation product evolution is the process of developing new products, based on the same design concepts as the current generation, with substantially better performance and significant new features.

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Future product revolution is the process of developing new products that represent a significant departure from previous generation design concepts and which incorporate evolving trends in processor architecture.

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systems architecture, including modeling and partitioning;

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analog and mixed-signal technology;

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IP integration for system-on-a-chip development;

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software development; and

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systems integration.

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faster and higher performance, which is essential for the take-up of new services or content;

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lower power requirements, which is critical for battery life;

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smaller and lighter chip components, for better overall product design;

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easier manufacturing of extremely complex technology; and

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higher value at lower cost.

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•

In connection with our DSP cores licensing business, we hold five U.S. patents, with expiration dates between 2013 and 2019, and have 16 patent applications pending in the United States, 11 pending in Israel, four pending in Japan, four pending in Europe and four pending in South Korea.

•

In connection with our IP platform licensing business, we currently hold 19 U.S. patents, with expiration dates between 2011 and 2020, and 11 non-U.S. patents on various aspects of our technology. We also have 35 patent applications pending in the United States and an additional 12 pending in the United Kingdom and other jurisdictions.

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•

intellectual property vendors that offer programmable DSP cores;

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intellectual property vendors of general purpose processors with DSP extensions;

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internal design groups of large chip companies that develop proprietary DSP solutions for their own application-specific chips; and

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semiconductor companies that offer off-the-shelf programmable DSP chips.

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in the Bluetooth and 802.11 technology arenas—with NewLogic and Tality;

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in the GPS market—with SiRF, Snaptrack and Trimble;

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in the GPRS and W-CDMA markets—with TTPcom; and

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in the Internet audio market—with Micronas, e.Digital and Xaudio.

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Member of audit committee

(2)

Member of compensation committee

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terminate the officer’s employment for any reason, other than for cause; or

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if the officer resigns after we

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assign him or her to duties inconsistent in any material respect with, or materially diminish, his or her position, authority or responsibilities;

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reduce the officer’s annual base salary other than through a comparable reduction in salary affecting all similarly situated employees;

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fail to continue to provide any material compensation or benefit plan or program in which the officer participates or provide such compensation, plan or program on a materially reduced basis;

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fail to award cash bonuses to the officer in amounts and in a manner substantially consistent with awards to other members of the senior management term in light of the officer’s title and responsibilities; or

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relocate the officer to a new office that is more than 60 kilometers from the officer’s principal residence and more than 35 kilometers from the location at which the officer performs his or her principal duties for us

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(1)

Salaries include social benefit payments and car allowances. With respect to Mr. Ohana, salaries also include sales commission in the aggregate amount of $54,110.

(2)

Includes bonus amounts earned in 2001 and paid in 2002.

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*

Mr. Fielding was appointed a director on November 27, 2000; Mr. Nilsson was appointed a director on March 31, 2000.

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(1)

Options granted pursuant to Ceva’s 2000 Stock Incentive Plan. 25% of the options granted vest one year from the date of grant. Thereafter the remaining 75% of the options granted vest quarterly over the next three years.

(2)

In the last fiscal year, Ceva, Inc. granted options to purchase an aggregate of 1,002,740 shares.

(3)

In determining the fair market value of our common stock, our board of directors considered various factors, including our financial condition and business prospects, our operating results, the absence of a market for our common stock and the risks normally associated with high technology companies and relied significantly upon the report of Ducas Economic Planning Ltd. related to the valuation of the DSP cores licensing business. The exercise price may be paid in cash, check, promissory note, shares of our common stock, through a cashless exercise procedure involving same-day sale of the purchased shares or any combination of such methods.

(4)

Options may terminate before their expiration dates if the optionee’s status as an employee or consultant is terminated or upon the optionee’s death or disability.

(5)

The 5% and 10% assumed annual rates of compounded stock price appreciation are mandated by rules of the Securities and Exchange Commission and do not represent our estimate or projection of our future common stock prices.

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the number of shares of common stock covered by options and the dates upon which such options become exercisable;

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the exercise price of options;

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the duration of options; and

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the number of shares of common stock subject to any restricted stock awards and the terms and conditions of such awards, including the conditions for repurchase, issue price, and repurchase price.

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85% of the fair market value of our common stock on the date of the grant of the option, which is the commencement of the offer period; or

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85% of the fair market value of our common stock on the exercise date, which is the last day of a purchase period.

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•

each person known by us to own beneficially more than 5% of the outstanding shares of our common stock after the distribution of our common stock by DSP Group and our combination with Parthus;

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each of our directors;

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each Named Executive Officer (see “Management—Executive Compensation”); and

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all current executive officers and directors as a group.

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*

Less than 1% of the outstanding shares of DSP Group, Ceva, Parthus or ParthusCeva, as the case may be.

(1)

All shares listed are comprised entirely of stock options granted to these individuals, and show the portion exercisable within 60 days of September 30, 2002. DSP Group granted options to purchase Ceva common stock to these individuals because it believed that the option grants permitted them to have the possibility of participating in any increase in share value of Ceva common stock (or ParthusCeva common stock after the combination) after the separation of the DSP cores licensing business from DSP Group and created better performance incentives for, and thus increased the retention of, these individuals who would be central to the DSP cores licensing business after the separation and combination.

(2)

Number of shares of ParthusCeva after transactions for each individual previously associated with DSP Group is calculated based on an aggregate of (i) shares of ParthusCeva common stock distributed to the individual (using a distribution ratio of one share of Ceva common stock for every three shares of DSP Group common stock held as of September 30, 2002), (ii) shares of ParthusCeva common stock issuable upon exercise of previously granted DSP Group options exercisable within 60 days of September 30, 2002 (adjusted using the distribution ratio of one share of Ceva common stock for every three shares of DSP Group common stock) and (iii) shares of ParthusCeva common stock issuable upon exercise of previously granted Ceva options exercisable within 60 days of September 30, 2002 (adjusted to reflect the surrender for cancellation by DSP Group of approximately 55% of its equity ownership in Ceva to Ceva in connection with the spin- off of Ceva from DSP Group). Number of shares of ParthusCeva after transactions for each individual previously associated with Parthus is calculated based on the aggregate of (i) shares of ParthusCeva common stock distributed to the individual (based on an assumption that former Parthus shareholders will hold 49.9% of the outstanding shares of ParthusCeva common stock after the combination of Ceva and Parthus) and (ii) shares of ParthusCeva common stock issuable upon exercise of previously granted Parthus options exercisable within 60 days of September 30, 2002 (adjusted based on the assumption that former Parthus shareholders will hold 49.9% of the outstanding shares of ParthusCeva common stock after the combination of Ceva and Parthus).

(3)

In connection with the separation of the DSP cores licensing business, DSP Group distributed all outstanding shares of Ceva common stock it held to the DSP Group stockholders, and Ceva granted options to purchase an aggregate of 711,249 shares of its common stock to holders of DSP Group options. In addition, in connection with Ceva’s combination with Parthus, it issued 9,004,165 shares of its common stock to former Parthus shareholders.

(4)

The number of shares of DSP Group prior to transactions includes 840,000 shares of DSP Group common stock subject to options held by Mr. Ayalon that are currently exercisable or will become exercisable within 60 days of September 30, 2002. The number of shares of ParthusCeva after transactions consists of 1,478 shares of ParthusCeva common stock and 551,194 shares of ParthusCeva common stock subject to options held by Mr. Ayalon that are currently exercisable or will become exercisable within 60 days of September 30, 2002.

(5)

The number of shares of Parthus prior to transactions includes (i) 280,000 Parthus ordinary shares held by Mr. Long’s wife and (ii) 100,492,422 Parthus ordinary shares held beneficially and of record by Mr. Long that are subject to a put and call option agreement between Mr. Long and Ollaberry Limited, an Isle of Man limited company that is an affiliate of Mr. Long. The number of shares of ParthusCeva after transactions consists of 1,677,420 shares of ParthusCeva common stock, of which 1,525,520 shares are subject to a put and call option agreement between Mr. Long and Ollaberry Limited.

(6)

The number of shares of Parthus prior to transactions consists entirely of shares held beneficially and of record by Mr. Long that are subject to a put and call option agreement between Mr. Long and Ollaberry Limited, an Isle of Man limited company that is an affiliate of Mr. Long. The number of shares of ParthusCeva after transactions consists of 1,525,520 shares of ParthusCeva common stock held beneficially and of record by Mr. Long that are subject to a put and call option agreement between Mr. Long and Ollaberry Limited. The address of Ollaberry Limited is 41 Athol Street, Douglas, Isle of Man, IM99 1HN.

(7)

The number of shares of Parthus prior to transactions includes 2,856,380 shares of Parthus ordinary shares subject to options held by Mr. Fielding that are currently exercisable or will become exercisable within 60

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days of September 30, 2002. The number of shares of ParthusCeva after transactions consists of 94 shares of ParthusCeva common stock and 43,383 shares of ParthusCeva common stock subject to options held by Mr. Fielding that are currently exercisable or will become exercisable within 60 days of September 30, 2002.

(8)

The number of shares of DSP Group prior to transactions consists solely of DSP Group common stock subject to options held by Mr. Limon that are currently exercisable or will become exercisable within 60 days of September 30, 2002. The number of shares of ParthusCeva after transactions consists of solely of shares of ParthusCeva common stock subject to options held by Mr. Limon that are currently exercisable or will become exercisable within 60 days of September 30, 2002.

(9)

The number of shares of Ceva prior to the transactions and of ParthusCeva after transactions consists solely of shares of ParthusCeva common stock subject to options held by Mr. Mann that are currently exercisable or will become exercisable within 60 days of September 30, 2002.

(10)

The number of shares of Parthus prior to transactions consists solely of Parthus ordinary shares subject to options held by Mr. Nilsson that are currently exercisable or will become exercisable within 60 days of September 30, 2002. The number of shares of ParthusCeva after transactions consists solely of shares of ParthusCeva common stock subject to options held by Mr. Nilsson that are currently exercisable or will become exercisable within 60 days of September 30, 2002.

(11)

The number of shares of DSP Group prior to transactions includes (i) 33,334 shares of DSP Group common stock subject to options held by Mr. Silver that are currently exercisable or will become exercisable within 60 days of September 30, 2002, (ii) 2,000 shares of DSP Group common stock held by the Theodore J. Silver Trust of which Mr. Silver disclaims beneficial ownership, and (iii) 8,000 shares of DSP Group common stock held by the Adrienne Silver Trust of which Mr. Silver disclaims beneficial ownership. The number of shares of ParthusCeva after transactions consists of 3,333 shares of ParthusCeva common stock.

(12)

The number of shares of DSP Group prior to transactions consists solely of DSP Group common stock subject to options held by Mr. Wertheizer that are currently exercisable or will become exercisable within 60 days of September 30, 2002. The number of shares of ParthusCeva after transactions consists solely of shares of ParthusCeva common stock subject to options held by Mr. Wertheizer that are currently exercisable or will become exercisable within 60 days of September 30, 2002.

(13)

The number of shares of Parthus prior to transactions consists solely of Parthus ordinary shares subject to options held by Ms. Coughlan that are currently exercisable or will become exercisable within 60 days of September 30, 2002. The number of shares of ParthusCeva after transactions consists solely of shares of ParthusCeva common stock subject to options held by Ms. Coughlan that are currently exercisable or will become exercisable within 60 days of September 30, 2002.

(14)

The number of shares of DSP Group prior to transactions consists solely of DSP Group common stock subject to options held by Mr. Ohana that are currently exercisable or will become exercisable within 60 days of September 30, 2002. The number of shares of ParthusCeva after transactions consists solely of shares of ParthusCeva common stock subject to options held by Mr. Ohana that are currently exercisable or will become exercisable within 60 days of September 30, 2002.

(15)

The number of shares of DSP Group prior to transactions includes 61,496 shares of DSP Group common stock subject to options held by Ms. Ovadia that are currently exercisable or will become exercisable within 60 days of September 30, 2002. The number of shares of ParthusCeva after transactions consists of 701 shares of ParthusCeva common stock and 34,963 shares of ParthusCeva common stock subject to options held by Ms. Ovadia that are currently exercisable or will become exercisable within 60 days of September 30, 2002.

(16)

Includes an aggregate of (a) 1,139,909 shares of DSP Group common stock, (b) 819,250 shares of Ceva common stock, (c) 5,031,760 ordinary shares of Parthus, and (d) 804,462 shares of ParthusCeva common stock each subject to options that are currently exercisable or will become exercisable within 60 days of September 30, 2002.

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•

DSP Group’s certificate of incorporation and bylaws provide for the division of its board of directors into three classes. The term of office for each class is three years, with staggered terms so that the term of Class I directors will expire at the annual meeting of stockholders in 2004, the term of Class II directors will expire at the annual meeting of stockholders in 2005 and the term of Class III directors will expire at the annual meeting of stockholders in 2003. Because this system of electing and removing directors generally makes it more difficult for stockholders to replace a majority of the board of directors, it may discourage a third party from making a tender offer or otherwise attempting to gain control of DSP Group’s board of directors. Our certificate of incorporation and bylaws do not provide for any staggered board.

•

Our bylaws provide that our directors may be removed, with or without cause, by the affirmative vote of the holders of a majority of the outstanding shares entitled to vote at an election of directors, whereas DSP Group’s certificate of incorporation provides that its directors may be removed with cause by the affirmative vote of the holders of a majority of the then-outstanding shares of stock entitled to vote at an election of directors and without cause by the affirmative vote of the holders of at least 66 2/3% of the then-outstanding shares of stock entitled to vote at an election of directors. The higher percentage vote requirement to remove a DSP Group director without cause may discourage a third party from attempting to gain control of DSP Group’s board of directors.

•

Our bylaws specifically provide that ParthusCeva shall have a management committee, consisting of the Chairman and Vice Chairman of our board of directors, our President and Chief Executive Officer, and our Chief Technology Officer. Our Chief Financial Officer may attend meetings of the management committee on a non-voting basis. No member of the management committee may be removed (with or without cause) and no person may be appointed to fill any vacancy on the management committee, without the affirmative vote of not less than six members of our board of directors. DSP Group’s bylaws do not specifically provide for the establishment of a management committee but its board of directors may establish such committees as may be permitted by Delaware law and those committees shall have such powers and perform the duties as may be prescribed by its board.

•

Our bylaws provide that ParthusCeva shall have a compensation committee consisting of four non-executive members of our board of directors. Except for the appointment of the initial members of the compensation committee, no member of the compensation committee may be removed, with or without cause, and no person may be appointed to fill any vacancy on the compensation committee, without the affirmative vote of not less than six members of our board of directors. DSP Group’s bylaws do not

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specifically provide for the establishment of a compensation committee but it currently has a compensation committee in existence, whose members may be appointed or removed by a majority of its board.

•

Our bylaws provide that our board of directors may, by a vote of not less than six directors, from time to time appoint such other committees as may be permitted by Delaware law. As discussed above, DSP Group’s bylaws similarly provide that its board of directors may appoint such committees as may be permitted by Delaware law but does not require a vote of not less than six directors to establish any such committees.

•

Our bylaws provide that no persons named to the following positions may be removed, with or without cause, and no person may be named to fill any vacancy in the following positions, without the approval of not less than six members of our board of directors: Chairman of the board of directors; Vice Chairman of the board of directors; President and Chief Executive Officer; Executive Vice President—Business Development and Chief Technology Officer; Chief Operating Officer; Chief Financial Officer; General Manager of the DSP Intellectual Property Licensing Division; and Chief Scientist—DSP Technologies. DSP Group's bylaws do not provide for any such arrangement with respect to appointment and removal of its officers.

•

acquisition of ParthusCeva by means of a tender offer,

•

acquisition of ParthusCeva by means of a proxy contest or otherwise, or

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removal of our incumbent officers and directors.

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1% of the then outstanding shares of our common stock, or

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the average weekly trading volume during the four calendar weeks preceding such sale, subject to the filing of a Form 144 with respect to the sale.

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Represents a percentage less than 10%

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Immediately prior to the combination with Ceva, Parthus distributed to its shareholders an aggregate cash repayment of capital of $60 million.

•

The existing Parthus shares were then cancelled and each Parthus shareholder received new shares of ParthusCeva’s common stock.

•

Immediately following the combination, the stockholders of DSP Group and the former shareholders of Parthus own approximately 50.1% and 49.9%, respectively, of the common stock of ParthusCeva.

•

ParthusCeva assumed all outstanding Parthus share options and the option plans and option agreements that govern them. These options continue with the same terms and conditions, except that they have become options to purchase shares of ParthusCeva’s common stock and have been adjusted in the manner set forth below. Option holders will no longer be able to obtain Parthus shares or ADSs upon exercise of such options.

•

The number of shares of ParthusCeva’s common stock purchasable upon the exercise of each Parthus option is equal to the number of Parthus shares underlying the option, adjusted to take into account the conversion of Parthus shares into ParthusCeva shares. The exercise price per share was also adjusted proportionately.

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(*)

Including 35,750 options of employees who were transferred from the Parent to the Company during the year 2001.

(**)

Including 14,167 options of employees who were transferred from the Company to the Parent during the year 2001.

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Immediately prior to the combination with Ceva, Parthus distributed to its shareholders an aggregate cash repayment of capital of $60 million.

•

The existing Parthus shares were then cancelled and each Parthus shareholder received new shares of ParthusCeva’s common stock.

•

Immediately following the combination, the stockholders of DSP Group and the former shareholders of Parthus own approximately 50.1% and 49.9%, respectively, of the common stock of ParthusCeva.

•

ParthusCeva assumed all outstanding Parthus share options and the option plans and option agreements that govern them. These options continue with the same terms and conditions, except that they have become options to purchase shares of ParthusCeva’s common stock and have been adjusted in the manner set forth below. Option holders will no longer be able to obtain Parthus shares or ADSs upon exercise of such options.

•

The number of shares of ParthusCeva’s common stock purchasable upon the exercise of each Parthus option is equal to the number of Parthus shares underlying the option, adjusted to take into account the conversion of Parthus shares into ParthusCeva shares. The exercise price per share was also adjusted proportionately.

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+

All amounts are estimates except the SEC filing fee, the Nasdaq National Market listing fee and the London Stock Exchange listing fee.

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†

Filed as an exhibit to the Registrant’s registration statement on Form 10, as amended, filed with the Commission on June 3, 2002.

*

Filed herewith.

**

Previously filed

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(1)

Filed as an exhibit to the registration statement on Form S-8 of Parthus Technologies plc, filed with the Commission on June 6, 2000.

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†

Filed as an exhibit to the Registrant’s registration statement on Form 10, as amended, filed with the Commission on June 3, 2002.

*

Filed herewith.

**

Previously filed

(1)

Filed as an exhibit to the registration statement on Form S-8 of Parthus Technologies plc, filed with the Commission on June 6, 2000.