EXHIBIT 10.13

 

CASH COMPENSATION ARRANGEMENTS WITH EXECUTIVE OFFICERS

 

Fiscal 2008 Bonuses

 

The following are the fiscal 2008 cash bonuses paid to the following executive
officers:

 

Executive Officer

 

Title

 

Bonus

 

 

 

 

 

 

 

Todd Simpson

 

Chief Executive Officer and President

 

$

47,188

 

 

 

 

 

 

 

William Tamblyn

 

Executive Vice President and Chief Financial Officer

 

$

46,354

 

 

 

 

 

 

 

Lowell Trangsrud

 

Executive Vice President and Chief Operating Officer

 

$

46,354

 

 

Fiscal 2009 Base Salary and Target Bonus

 

The following are the fiscal 2009 salaries and target bonuses for the executive
officers:

 

Named Executive Officer

 

Salary

 

Target Bonus as %
of Salary

 

 

 

 

 

 

 

Mr. Simpson

 

$

325,000

 

75

%

Mr. Tamblyn

 

$

266,400

 

60

%

Mr. Trangsrud

 

$

266,400

 

60

%

 

Fiscal 2009 Management Bonus Plan

 

The following is the 2009 Management Bonus Plan applicable to the executive
officers:

 

The 2009 Executive Bonus Plan provides for the payment of an annual cash bonus
for each Ditech Networks officer, including the “named executive officers,”
based on an individual targeted bonus amount.  The 2009 target bonus amounts for
the “named executive officers” are as follows:

 

Named Executive Officer

 

Title

 

Target Bonus 
Amount

 

 

 

 

 

 

 

Todd Simpson

 

Chief Executive Officer and President

 

$

243,750

 

William Tamblyn

 

Executive Vice President and Chief Financial Officer

 

$

159,840

 

Lowell Trangsrud

 

Executive Vice President and Chief Operating Officer

 

$

159,840

 

 

Each executive’s bonus will be earned based on (a) Company performance as
against the Company’s 2009 Operating Plan, (b) individual performance as against
established individual goals, and (c) a discretionary portion.  Weighting of
these components is as follows:

 

Weighting:

 

Revenue

 

40

%

Operating Performance (1)

 

30

%

Individual Goals

 

20

%

Discretionary Bonus

 

10

%

Total

 

100

%

 

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(1)

Operating Performance is GAAP operating profit/(loss) adjusted to reverse the
FAS 123R non-cash expense charge for the period(s).

 

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Revenue Component of Executive’s Bonus:

 

No pay out if actual revenue does not exceed at least 80% of target revenue as
set forth in the Company’s 2009 Operating Plan.

 

For every percentage point actual revenue exceeds 80% of target revenue as set
forth in the Company’s 2009 Operating Plan, the executive will earn 5% of the
portion of target bonus allocated to the revenue component.

 

Operating Performance Component of Executive’s Bonus:

 

No pay out if actual Operating Performance is more than 30% unfavorable to the
Company than target Operating Performance as set forth in the Company’s 2009
Operating Plan.

 

If actual Operating Performance is 30% more unfavorable to the Company than
target Operating Performance as set forth in the Company’s 2009 Operating Plan,
the executive will earn 40% of the portion of target bonus allocated to the
Operating Performance component.

 

For every percentage point actual Operating Performance is more favorable to the
Company than Operating Performance for the minimum amount for a bonus to be
earned, the executive will earn (a) an additional 2% of the portion of target
bonus allocated to the Operating Performance component, until actual Operating
Performance equals target Operating Performance as set forth in the Company’s
2009 Operating Plan, and (b) an additional 3% of the portion of target bonus
allocated to the Operating Performance component for actual Operating
Performance being more favorable than target Operating Performance as set forth
in the Company’s 2009 Operating Plan.

 

Caps on Bonus:

 

1.             For the revenue component of the payment to pay out greater than
100% of target for the revenue component, the executive must have earned some
bonus amount under the Operating Performance component of the Company’s 2009
Operating Plan.

 

2.             The total payout for each executive will be capped at 200% of
target bonus.

 

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