Washington, DC 20549
Date of Report (Date of earliest event reported): January 6, 2012
DITECH NETWORKS, INC.
(Exact name of registrant as specified in its charter)
825 E. Middlefield Road
Mountain View, Ca. 94043
(Address of principal executive offices and zip code)
Registrants telephone number, including area code: (650) 623-1300
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 6, 2012, the Compensation Committee of the Board of Directors of Ditech Networks, Inc. established the performance metrics to be used in determining the cash bonus compensation for Kenneth Naumann, Ditech Networks, Inc.s Chief Executive Officer, for the third and fourth quarters of fiscal 2012. As previously disclosed, Mr. Naumanns target cash bonus for fiscal 2012 is $30,000 per quarter. The Compensation Committee determined that Mr. Naumanns actual bonus for the third and fourth fiscal quarters of fiscal 2012 will be a percentage of his target bonus calculated as follows:
· 70% of his bonus will be based on company performance, to be divided equally between (1) quarterly revenue, (2) use of cash and (3) EBITDA (earnings before interest, tax, depreciation and amortization). If the actual company performance for the category equals or exceeds the established level of performance for the category, then 100% of that portion of the target bonus will be paid, otherwise no portion of that portion of the target bonus will be paid. The established level of company performance for each quarter for each metric is as set forth in Ditechs fiscal 2012 operating plan, other than revenue, which is 85% of plan revenue.
· 30% of his bonus will be based on Mr. Naumanns individual performance in achieving specified strategic goals. The Compensation Committee will determine what portion, if any, of this portion of his bonus will be paid after determining the level of success of Mr. Naumann in achieving the specified strategic goals.
In addition, on January 6, 2012, the Compensation Committee approved Mr. Naumanns bonus for the second fiscal quarter at $22,500, and ratified Mr. Naumanns bonus for the first fiscal quarter at $30,000. In both cases, the bonus was established by the Compensation Committee based upon the Compensation Committees subjective assessment of Mr. Naumanns performance for the respective quarter.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.