Exhibit 10.1


 


AMENDMENT TO LETTER
AGREEMENT


 


This Amendment to Letter Agreement (the “Amendment”)
is made and entered into as of December 15, 2008 (the “Effective Date”),
by and between Ditech Networks, Inc., a Delaware corporation (the “Company”)
and Todd Simpson (“Executive”).


 


RECITALS


 


A.            The
Company retains the services of Executive pursuant to that certain letter
agreement dated September 24, 2007 (the “Letter Agreement”).


 


B.            The
Company and Executive wish to amend the Letter Agreement to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as
amended.


 


AGREEMENT


 


A new Section of the Letter Agreement is hereby
added to read in its entirety as follows:


 


Compliance with Internal Revenue Code Section 409A.


 


All payments provided under this agreement are intended to constitute
separate payments for purposes of Treasury Regulation Section 1.409A-2(b)(2).  If you are a “specified employee” of the
Company or any affiliate thereof (or any successor entity thereto) within the
meaning of Section 409A(a)(2)(B)(i) of the Internal Revenue Code of
1986, as amended (the “Code”) on the date of a termination without Cause that
constitutes a “separation from service” with the Company within the meaning of
Treasury Regulation Section 1.409A-1(h) (without regard to any
permissible alternative definition there under) (a “Covered Termination”), then
the severance pay in the form of continuation of base salary (the “Payments”)
shall be delayed until the earlier of: (i) the date that is six (6) months
after the date of the Covered Termination, or (ii) the date of your death
(such date, the “Delayed Payment Date”), and the Company (or the successor
entity thereto, as applicable) shall (A) pay to you a lump sum amount
equal to the sum of the Payments that otherwise would have been paid to you on
or before the Delayed Payment Date, without any adjustment on account of such
delay, and (B) continue the Payments in accordance with any applicable
payment schedules set forth for the balance of the period specified
herein.  Notwithstanding the foregoing, (i) Payments
scheduled to be paid from the date of a Covered Termination through March 15th
of the calendar year following such termination shall be paid as scheduled
pursuant to the “short-term deferral” rule set forth in Treasury
Regulation Section 1.409A-1(b)(4); (ii) Payments scheduled to be paid
following such March 15th shall be paid as scheduled to the maximum extent
permitted pursuant to an “involuntary separation from service” as permitted by
Treasury Regulation Section 1.409A-1(b)(9)(iii), but in no event later
than the last day of the second taxable year following the taxable year of the
Covered Termination; and (iii) any excess Payments shall be subject to
delay as provided in the previous sentence. 
Amounts paid to 


 

















 


reimburse for COBRA premiums are intended to be paid pursuant to the
exception provided by Treasury Regulation Section 1.409A-1(b)(9)(v)(B).


 


Other
than as set forth herein, the terms of the Letter Agreement remain unaffected
hereby.


 


In Witness
Whereof, the Company and Executive have executed this Amendment on the dates
set forth below, to be effective immediately as of the Effective Date.


 


	
  Ditech
  Networks, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/William J. Tamblyn

  	
   

  
	
   

  	
   

  
	
  Its:

  	
  Executive Vice
  President and Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  December 15, 2008

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Todd
  Simpson

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/Todd G. Simpson

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  December 15, 2008