Exhibit 10.1


 


Executive Officer Cash
Compensation Arrangements


 


Salaries


 


The
fiscal 2011 salaries for Ditech Networks’ named executive officers (the
executive officers appearing in the summary compensation table in Ditech
Networks’ latest proxy statement) are as follows:


 


	
  Named Executive Officer

  	
   

  	
  Title

  	
   

  	
  Fiscal 2011 Annual Salary

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Todd Simpson

  	
   

  	
  Chief
  Executive Officer and President

  	
   

  	
  $

  	
  325,000

  	
   

  
	
  William Tamblyn

  	
   

  	
  Executive
  Vice President, Chief Financial Officer and Chief Operating Officer

  	
   

  	
  $

  	
  266,400

  	
   

  
	
  Karl Brown

  	
   

  	
  Vice
  President of Marketing

  	
   

  	
  $

  	
  189,000

  	
   

  



 


Ditech Networks, Inc. 2011 Executive Bonus Plan


 


The
2011 Executive Bonus Plan provides for the payment of an annual cash bonus for
each Ditech Networks executive officer based on an individual target bonus
amount.  The 2011 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, Chief Financial Officer and Chief Operating Officer

  	
   

  	
  $

  	
  159,840

  	
   

  
	
  Karl Brown*

  	
   

  	
  Vice
  President of Marketing

  	
   

  	
  $

  	
  37,800

  	
   

  



 






*
In addition to Mr. Brown’s target bonus amount, Mr. Brown may earn up
to an additional $50,000 based on company sales.


 


No
bonuses will be paid for fiscal 2011 if Ditech Networks’ actual Operating
Performance (GAAP operating profit/(loss) for fiscal 2011 adjusted to reverse
the ASC 718 non-cash expense charge) does not meet or is not better than target
Operating Performance as set forth in Ditech Networks’ 2011 Operating Plan.


 


Each
executive officer’s total payout is capped at 200% of target bonus.


 


Each
executive’s bonus will be earned based on (a) company performance as
against Ditech Networks’ 2011 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 ASC 718 non-cash expense
charge for the period.


 


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 Ditech Networks’ 2011 Operating Plan.


 


For
every percentage point actual revenue exceeds 80% of target revenue as set
forth in Ditech Networks’ 2011 Operating Plan, the executive will earn 5% of
the portion of target bonus allocated to the revenue component.


 


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Operating Performance Component of Executive’s Bonus:


 


If
actual Operating Performance meets or is better than target Operating
Performance as set forth in Ditech Networks’ 2011 Operating Plan, 100% of this
component will be paid.


 


Individual Goals:


 


Yet
to be determined.


 


Discretionary Bonus:


 


The
Compensation Committee will retain the discretion to determine, in its sole and
absolute discretion, following the completion of 2011, the remainder of the
executive officer bonuses.


 


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