Exhibit 10.12


 


April 25, 2002


 


 


Lee House


 


Subject:  Employment Offer


 


Dear Lee,


 


I am pleased to offer you
employment as Vice President, Engineering, Echo and DSP Network Products,
reporting directly to me.  This offer is
contingent upon the approval of Ditech’s Board of Directors – Compensation
Committee.


 


Your compensation package
consists of the following:


•                  Annual Base
salary of $180,000.


•                  Eligibility for
a Management Bonus of up to $45,000. 
The bonus is broken down as follows:


•                          $20,000 based on attainment of corporate
performance objectives.   There will be
no payment made for FY 03 corporate performance.


•                          $25,000 based on attainment of
individual performance objectives.  The
Management Bonus program in general, and your bonus in particular, are subject
to change, including elimination of the program, at the sole discretion of the
Company.  Bonus will be earned and paid
pro-rata at the end of each fiscal quarter. 
This bonus will be guaranteed for the first year of your employment
only.  Payment will be made pro-rata
over the year and paid on the fiscal quarters. 
You must be employed by Ditech as an active employee on the last day of
said quarter in order to earn a bonus for that quarter.


 


Subject to the approval of the
Company’s Board of Directors or its Compensation Committee, you will be granted
stock options to purchase 150,000 shares of the Company’s Common Stock. The
exercise price per share will be equal to the fair market value per share on
the date the option is approved by Ditech’s Board of Directors.  The option will be subject to the terms and
conditions applicable to options granted under Ditech’s 2000 Non-Qualified
Stock Plan, as described in that Plan and the applicable stock option
agreement.  The option will be
immediately exercisable and are Non-qualified options.  The purchased shares will be subject to
repurchase by the Company at the exercise price in the event that your service
terminates before you vest in the shares. 
Vesting breakdown is as follows:


•                          For the first 100,000 shares, you will
vest in 25% of the option shares after 12 months of continuous service and the
balance will vest in monthly installments over the next 36 months


•                          50,000 shares are targeted on specific
goals/milestone completion.  The option
would vest up to 25,000 shares per year if the milestones for each year are
fully achieved.  Further details would
be provided in your stock option agreement.


 


The company will employ you on
an “at will” basis, described below. 
However, if the company terminates your employment for any reason other
than cause during your first year of service only, then the Company will
continue to pay your base salary for six months from the notification of intent
to separate.  “Cause” means (i) gross
negligence or willful misconduct in the performance of your duties; (ii)
failure to perform your duties, after reasonable notice and opportunity to cure
any such failure; (iii) commission of any act of fraud; or (iv) conviction of a
felony or a crime involving moral turpitude causing actual or potential harm to
the business of the company.  This
severance benefit will be in lieu of any other severance policy of general
application to company employees.  After
the first year, you will only be entitled to severance under any severance
policy of general application, if any. The same salary continuation period will
be credited as continuous service for purposes of the stock options
described.  However, the maximum vesting
continuation is capped at one year from start date and the minimum vesting
continuation is up to one year from date of hire.  The applicability of this is described above, based on
termination of employment for any reason other than cause (see definition of
“cause” above), and applicable to your first year of service only.  This paragraph will not apply unless you (a)
have executed a general release (in a form prescribed by the Company) of all
known and unknown claims that you may then have against the Company or persons
affiliated with the Company and (b) have agreed not to prosecute any legal
action for other proceedings based on those claims.  This paragraph is subject to Board approval.   The normal exercise period for stock


 

















 


options pursuant to the plan is
90 days from date of termination.


 


Executive compensation is reviewed
at the beginning of our fiscal year on May 1st.


 


Your benefit package with
Ditech Communications Corporation will include Health insurance coverage (with
partial premium due if for family coverage) beginning the first of the month
after date of employment, Life and Long Term Disability insurance with option
for additional coverage, Flexible Spending Program participation, Employee
Stock Purchase Program (ESPP) and 401(k) participation.  Eligibility for 401(k) is effective after 90
days of employment.  ESPP contribution
period begins June 1, 2002.


 


Your employment with Ditech
Communications Corporation is at-will. 
This means that either you or the company may terminate the employment
relationship at any time, with or without cause, and with or without prior
notice.  This at-will provision is only
subject to change in a writing signed by the CEO of the company.  You will be asked to sign the statement of
your acceptance and a confidentiality agreement when you report to work.


 


This offer letter constitutes
the entire terms of the offer of employment with the company, and supersedes
all prior negotiations and agreements, whether written or oral, relating to the
subject matter of the offer.


 


I look forward to working with
you and having you as a part of our valuable and dynamic team!  Please indicate your acceptance by signing
and returning this letter by April 30, 2002. 
You may fax your acceptance to (650) 564-9593.  We anticipate your start to begin part-time on May 1, 2002 and
full-time on May 6, 2002.


 


	
  Sincerely,

  	
  Accepted by:

  	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  /s/ Timothy
  K. Montgomery

  	
   

  	
  /s/ Lee
  House

  	
   

  	
  May 14, 2002

  	
   

  
	
  Timothy K.
  Montgomery

  President and CEO

  	
  Lee House

  	
  Date

  
							



 


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