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

  	
  %

  



 






	
  (1)

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

  



 

















 


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.