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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K/AAmendment No. 1

(MARK ONE)ý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934For the Fiscal Year Ended April 30, 2009ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934For the Transition Period
From                                    To


COMMISSION FILE NUMBER: 000-26209

LOGO

DITECH NETWORKS, INC.(Exact Name of Registrant as Specified in its Charter)

DELAWARE(State or Other Jurisdiction of
Incorporation or Organization)

94-2935531(I.R.S. Employer
Identification No.)


825 East Middlefield Road
Mountain View, CA 94043(Address, Including Zip Code, of Registrant's Principal Executive Offices)

(650) 623-1300(Registrant's Telephone Number, Including Area Code)

Securities
Registered Pursuant to Section 12(b) of the Act:

Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $.001 Par Value

The NASDAQ Stock Market, Inc


Securities
Registered Pursuant to Section 12(g) of the Act:None

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes o    No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes o    No ý

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes ý    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes o    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of the Registrant's knowledge, in definitive proxy or information incorporated by reference to Part III of this Form 10-K or any amendment to this
Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o

Accelerated filer o

Non-accelerated filer o (Do not check if a smaller
reporting company)

Smaller reporting company ý


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act). Yes o    No ý

The aggregate market value of voting stock held by non-affiliates of the Registrant was approximately $10,714,423 as of October 31, 2008 based
upon the closing price on the Nasdaq Global Market reported for such date. Excludes an aggregate of 13,146,954 shares of common stock held by executive officers and directors and by each person known
by the registrant to own 5% or more of the outstanding common stock. Exclusion of shares held by any such person should not be construed to indicate that a determination has been made that such person
possesses the power, directly or indirectly, to direct or cause the direction of the management or policies of the registrant, or that such person is controlled by or under common control with the
registrant.

The
number of shares outstanding of the Registrant's Common Stock as of June 30, 2009 was 26,307,406 shares.

DOCUMENTS INCORPORATED BY REFERENCE

None



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DITECH NETWORKS, INC.        FORM 10-K/A  Amendment No. 1        INDEX



PAGEPART IIIItem 10Directors, Executive Officers and Corporate
Governance


1Item 11Executive Compensation


4Item 12Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters


11Item 13Certain Relationships and Related Transactions, and Director
Independence


16Item 14Principal Accountant Fees and
Services


17SIGNATURES


19


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DITECH NETWORKS, INC.        EXPLANATORY NOTE

We are filing this amendment to our Annual Report on Form 10-K, originally filed with the Securities and Exchange
Commission on July 2, 2008, solely for the purpose of amending and supplementing Part III of the Annual Report on Form 10-K. This amendment changes our Annual Report
only by including information required by Part III (Items 10, 11, 12, 13 and 14). In addition, we are also including Exhibits 31.1 and 31.2 required by the filing of this
amendment.

Part III

Item 10Directors, Executive Officers and Corporate Governance

Board of Directors

Gregory M. Avis,age 50, has been a director of Ditech since
February 1997. Mr. Avis has served as a Founding Managing Director of Summit Partners, a venture capital and private equity firm, since 1990 and has been a General Partner since 1987.
Mr. Avis also serves as a director of Right Now Technologies, a customer relationship management software company, and several privately held companies. Mr. Avis received a B.A. from
Williams College and an M.B.A. from Harvard University.

Francis (Fran) Dramis, Jr.age 61, has served as a director of Ditech since February of 2008. Mr. Dramis is currently
CEO of F. Dramis, LLC, a technology consulting firm. He also serves as a Director for Avocent, a leading global provider of IT infrastructure management solutions; Iocom, a developer of
enterprise collaboration software, and Netizza, the global leader in analytic appliances. Mr. Dramis serves on the Advisory Boards of Virma, Diabetech and NanoLumens, as well as Voyager
Capital, a Venture Capital Firm and the Seraph Group. Mr. Dramis served for 8 years as the Chief Information, Ecommerce and Security Officer for BellSouth. Prior to joining BellSouth
Corporation in 1998, Mr. Dramis founded CIO Strategy, Inc., an information technology consulting firm. At that firm, Mr. Dramis led technology transformation efforts at Citibank,
Coopers and Lybrand, NASD and Bankers Trust. Prior to CIO Strategy, Mr. Dramis was managing director and CIO at Salomon Brothers. Mr. Dramis also served as president and CEO of Network
Management Inc. and president and chief operating officer of Telic Corporation. Early in his career, Mr. Dramis worked with AT&T, including Bell Labs, rising to the position of executive
director of information product management. Mr. Dramis received a B.S. in History from Rutgers University, and a Masters of Science in Advanced Management from Pace University.

Edwin L. Harper,age 64, has been a director at Ditech since December 2002, served as our Lead Independent Director
from November 2003 to October 2007, and has served as our Chairman of the Board since June 2007. He served as our Interim Chief Executive Officer from August 15, 2007 to
September 24, 2007. Mr. Harper also serves on the Board of Directors of Avocent, Inc., a leading worldwide manufacturer of keyboard, video and mouse switching and connectivity
systems for IT Managers in network client/server environments where he was elected Chairman and interim CEO on January 23, 2008 to July 15, 2008. He also serves on the Board of Verari
Systems, Inc., a privately held manufacturer of high performance cluster computers, and MxLogic, Inc., a privately held software firm that provides e-mail security software
and managed services. Mr. Harper has over 30 years experience in the high-tech field and has served as President and Chief Executive Officer of several companies, including
Colorado Memory Systems, a computer storage company. From August 1999 to June 2001, Mr. Harper served as President and Chief Executive Officer at Manufacturing
Technology, Inc., a manufacturer of slicing machine systems. Mr. Harper currently serves as the Chairman and Chief Executive Officer of White Cell Software, Inc., a start up
providing end-point network security software and as Chairman and CEO of Magic Softworks, a startup providing remote backup for desktop computers. Mr. Harper also has extensive
experience serving on several companies' Board of Directors. From 1993 to May 2002, Mr. Harper served on the Board of Directors of Network Associates, a $1 billion network
security and management software company. During part of his tenure on the

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Network
Associates' Board, Mr. Harper served as Chairman. He received a B.S. and a M.S. in electrical engineering from Colorado State University.

William A. Hasler,age 67, has been a director of Ditech since May 1997. He was the Vice Chairman of Aphton
Corporation, a bio-pharmaceutical company and he served as its Co-Chief Executive Officer until February 2004. From August 1991 to July 1998,
Mr. Hasler was the Dean of the Haas School of Business at the University of California at Berkeley, and from January 1984 to August 1991, Mr. Hasler served as a Vice
Chairman of KPMG Peat Marwick. Mr. Hasler is a director of numerous companies, including Schwab Funds, a financial service company, and Harris Stratex Networks, a microwave radio supplier. He
received a B.A. from Pomona College and an M.B.A. from Harvard University.

Dr. Andrei M. Manoliu,age 57, has been a director of Ditech since June 2000. He is currently an independent
business and financial consultant to emerging growth companies. From September 2000 to October 2001, Dr. Manoliu served as the Chief Executive Officer of Nanomix, Inc., a
leading Nano electronic detection company. From 1982 through March 2000, Dr. Manoliu was an attorney with Cooley Godward LLP, where he was a senior partner prior to his departure.
During his tenure at Cooley Godward LLP, he served as outside counsel to Ditech. Dr. Manoliu received a Ph.D. in Solid State Physics from the University of California, Berkeley, and a
J.D. from Stanford Law School.

Dr. Todd G. Simpson,age 43, joined Ditech in June 2005 as our Vice President, General Manager in connection
with our acquisition of Jasomi Networks, Inc., and was promoted to Vice President, Marketing, in May 2007 and to President and Chief Executive Officer in September 2007. Prior to
joining Ditech, Dr. Simpson was President and CEO of Jasomi from January 2005 until June 2005. Prior
to joining Jasomi, Dr. Simpson was a Founder and Director of Call Genie Inc., a provider of automated voice solutions for the directory services business. From January 2001 to
December 2003, Dr. Simpson served as CTO for Zi Corporation, a provider of embedded software for mobile phones, and where previously, in 2000, he was Vice President of Engineering. Prior
to this, he founded a series of companies including Headplay Inc. and Conversion Works. He holds a BSc. and PhD. in Computer Science from the University of Calgary.

David M. Sugishita, age 61, has served as director and Chairman of the Audit Committee of Ditech since February 2003.
He also serves as director and Chairman of the Board as well as Chairman of both the Audit Committee and Corporate Nominating & Governance Committee for Atmel Corporation. In addition, he
serves as director for Micro Component Technology. Since 2000, Mr. Sugishita has taken various short-term assignments including Executive Vice President of Special Projects at
Peregrine Systems, a global provider of enterprise software, from December 2003 to July 2004, as well as Executive Vice President and Chief Financial Officer at SONICblue from
January 2002 to April 2002. Prior to 2000, Mr. Sugishita held various senior financial management positions: Synopsys (Senior Vice President of Finance & Operations, Chief
Financial Officer) from 1997 to 2000; Actel (Senior Vice President and Chief Financial Officer) from 1995 to 1997; Micro Component Technology (Senior Vice President and Chief Financial Officer) from
1994 to 1995; Applied Materials (Vice President and Corporate Controller) from 1991 to 1994; and National Semiconductor (Vice President of Finance) from 1978 to 1991. Mr. Sugishita holds
degrees in business administration from San Jose State University (B.S.) and University of Santa Clara (M.B.A.).

Stockholder Recommendation of Nominees to the Board of Directors

The Corporate Governance and Nominating Committee will consider director candidates recommended by stockholders. The Corporate
Governance and Nominating Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria it has established, based on whether the candidate was
recommended by a stockholder or not. Stockholders who wish to recommend individuals for consideration by the Corporate Governance and Nominating Committee to become nominees for election to the Board
may do so by delivering a written recommendation to the

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Corporate
Governance and Nominating Committee at the following address: Ditech Networks, Inc., 825 East Middlefield Road, Mountain View, California 94043, Attention: Director
Nominations. For nominations for election at an Annual Meeting of Stockholders, this written recommendation must be delivered by at least the date 120 days prior to the anniversary date of the
mailing of our proxy statement for the prior year's Annual Meeting of Stockholders. Submissions must include the full name of the proposed nominee, a description of the proposed nominee's business
experience for at least the previous five years, complete biographical information, a description of the proposed nominee's qualifications as a director and a representation that the nominating
stockholder is a beneficial or record owner of Ditech's stock. Any such submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a
director if elected.

Audit Committee

We have a standing Audit Committee. The Board of Directors annually reviews The Nasdaq Stock Market definition of independence for
Audit Committee members and has determined that all members of Ditech's Audit Committee are independent (as independence is currently defined in Rule 5605(c)(2) of the Nasdaq rules and the
rules established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934). The Board of Directors has determined that each of Messrs. Sugishita and Hasler
qualifies as an "audit committee financial expert," as defined in applicable SEC rules. The Board made a qualitative assessment of Mr. Sugishita's level of knowledge and experience based on a
number of factors, including his formal education and experience as a chief financial officer for public reporting companies. The Board made a qualitative assessment of Mr. Hasler's level of
knowledge and experience based on a number of factors, including his formal education, his service as the Dean of the Haas School of Business at the University of California at Berkeley, and his
experience as Vice Chairman of KPMG Peat Marwick, a large independent accounting firm.

Executive Officers

Information concerning our Executive Officers is set forth under the section entitled "Executive Officers of the Registrant" at the end
of Part I of our Annual Report on Form 10-K, which is incorporated by reference here.

Section 16(a) Beneficial Ownership Reporting Compliance.

Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act") requires our directors and executive officers, and persons
who own more than ten percent of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity
securities of Ditech Networks. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.

To
our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, during the fiscal year ended
April 30, 2009, all
Section 16(a) filing requirements applicable to its officers and directors were complied with. We did not receive any representations or reports from greater than ten percent beneficial owners.

Code of Business Conduct and Ethics.

Ditech has adopted the Ditech Networks, Inc. Code of Conduct and Ethics that applies to all officers, directors and employees. A
copy of the Code of Conduct and Ethics will be sent to any person requesting a copy without charge. To request a copy of our Code of Conduct and Ethics, please contact: Investor Relations, Ditech
Networks, Inc., 825 East Middlefield Road, Mountain View, CA 94303, or call our Investor Relations Department at (650) 623-1308. If Ditech makes any substantive
amendments to the Code of Conduct and Ethics or grants any waiver from a provision of the Code to

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any
executive officer or director, Ditech will promptly disclose the nature of the amendment or waiver on a Form 8-K filing, or if permitted by Nasdaq, on its website.

Item 11Executive Compensation

Compensation Of Executive Officers



The following table shows the compensation awarded or paid to, or earned by, our Chief Executive Officer, our Chief Financial Officer,
and our other most highly compensated executive officer serving in such capacity at April 30, 2009. We refer to these employees collectively as our "Named Executive Officers."

Summary Compensation Table

Name and Principal Position

Year

Salary($)

Stock
Awards
($)(1)

Option
Awards
($)(2)

Non-Equity
Incentive Plan
Compensation
($)($)(1)

All Other
Compensation
($)(3)

Total
Compensation
($)Todd G. Simpson, Ph.D(4)


2009


325,000


47,648


352,164





14,616


739,428President and Chief
Executive Officer


2008


283,784


189,723


241,654


47,188


285,800


1,048,189William J. Tamblyn


2009


266,400


22,662


130,593





4,775


424,430Executive Vice President &
Chief Financial Officer


2008


266,400


23,611


238,476


46,354


3,337


578,178Lowell B. Trangsrud


2009


266,400


22,662


157,717





5,514


452,293Executive Vice President &
Chief Operating Officer


2008


266,450


23,611


226,889


46,354


4,599


567,853


---

Based on company performance, no bonuses were granted in the fiscal years ended April 30, 2008 or 2009. Additionally, no compensation was
paid out based on the Non-Equity Incentive Plan predicated on the company achieving only minimal levels of performance. The Compensation Committee provided retention equity grants
following the end of the fiscal year in part as a result of not paying out any cash under the plan.

Material
terms of employment agreements or arrangements are under the Section, "Potential Payments Upon Termination or Change of Control" below.

The
Non-Equity Incentive Plan for 2009 was based primarily on Ditech's operating plan, with emphasis on revenue growth and operating loss control, and a portion on personal
performance. The Compensation Committee determined that no bonuses would be paid to Ditech's executive officers for the 2009 Fiscal Year.

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Outstanding Equity Awards At Fiscal Year-End

The following table shows for the fiscal year ended April 30, 2009, certain information regarding outstanding equity awards at
fiscal year end for the named executive officers.

OUTSTANDING EQUITY AWARDS AT APRIL 30, 2009

Option Awards

Stock AwardsNumber of
Securities
Underlying
Unexercised
Options(#)
Exercisable

Number of
Securities
Underlying
Unexercised
Options(#)
Unexercisable

Equity
Incentive Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options(#)

Option
Exercise
Price($)

Option
Expiration
Date

Equity
Incentive Plan
Awards:
Number of
Unearned
Shares, Units
or other
Rights That
Have Not
Vested(#)(5)

Equity
Incentive Plan
Awards:
Market Value
or Payout
Value of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested($)(3)(5)Mr. Simpson


26,971








0.36


04/20/2014
(2)




25,000








7.22


02/15/2007
(1)

4,166


4,083450,000








5.02


10/10/2017
(1)










66,667


3.42


7/31/2009
(4)










33,333


3.42


7/31/2010
(4)










60,000


2.29


06/04/2018
(4)

20,000


19,602





60,000


0.7699


12/19/2018
(4)










60,000


0.7699


12/19/2018
(4)




Mr. Tamblyn


124,586








9.00


08/10/2009
(2)




125,000








7.19


01/10/2011
(2)




90,000








2.92


06/21/2012
(2)




10,000








10.35


09/23/2013
(2)




150,000








8.76


09/30/2013
(2)




125,000








13.37


05/18/2014
(1)




100,000








6.49


06/30/2015
(1)




37,500








7.22


02/15/2017
(1)

6,250


6,126





80,000


3.42


07/31/2009
(4)










40,000


3.42


07/31/2010
(4)










45,000


2.29


06/04/2018
(4)

15,000


14,702





45,000


0.7699


12/19/2018
(4)










45,000


0.7699


12/19/2018
(4)




Mr. Trangsrud


126,000








7.12


07/12/2011
(2)




28,900








2.92


06/21/2012
(2)




150,000








8.76


09/30/2013
(2)




125,000








13.37


05/18/2014
(1)




100,000








6.49


06/30/2015
(1)




37,500








7.22


02/15/2017
(1)

6,250


6,25060,000








3.42


12/07/2017
(1)










40,000


3.42


07/31/2009
(4)










20,000


3.42


07/31/2010
(4)










45,000


2.29


06/04/2018
(4)

15,000


14,702





45,000


0.7699


12/19/2018
(4)










45,000


0.7699


12/19/2018
(4)







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Potential Payments Upon Termination or Change of Control

Employment Agreement with Mr. Simpson.In September 2007, Ditech entered into a letter agreement with Mr. Simpson to
serve as
Ditech's Chief Executive Officer and President. Under the terms of Mr. Simpson's agreement, Mr. Simpson receives a base salary of $325,000 per year, less applicable payroll taxes and
withholdings, payable on the company's regular payroll schedule, and is eligible for an annual bonus of up to 75% of his annual base salary under the terms of the FY 2008 Executive Bonus Program, pro
rated in accordance with the time served in this position, with the remainder of his bonus governed by the bonus arrangements in place prior to execution of the agreement, also pro rated for the
portion of the year served under that prior arrangement. In addition, the obligations of Ditech under Mr. Simpson's prior agreement with the company relating to relocation assistance continue
uninterrupted by this letter agreement;provided, however,that (1) if his employment with the company is terminated without Cause prior to
July 31, 2008, then the company will continue to pay the relocation assistance through July 31, 2008, and (2) if his employment is terminated for any other reason, either by
Mr. Simpson or by the company, prior to July 31, 2008, then the relocation assistance shall cease as of his last day of employment.

In
addition, Mr. Simpson received an option to purchase 450,000 shares of the company's common stock with an exercise price equal to the fair market value of the company's common
stock on the date of grant. The option has a four year vesting schedule, under which 25% of the shares subject to the option will vest after 12 months and
1/48th of the total will vest at the end of each month thereafter, until either the option is fully vested or Mr. Simpson's employment ends, whichever occurs
first.

Mr. Simpson
was also granted an additional option to purchase 100,000 shares of the company's common stock, which shall vest upon achievement of company performance milestones
determined by the Compensation Committee.

Mr. Simpson
was added as a participant under the Ditech Networks, Inc. Amended and Restated Change in Control Severance Benefit Plan (the "Severance Plan"), which provides
for severance benefits in the event of a change of control. See the description of the Severance Plan below.

Additionally,
under the terms of Mr. Simpson's letter agreement, if Ditech terminates his employment without Cause (as defined below) prior to September 30, 2009, and such
termination is not in connection with a Change in Control (as defined in the Severance Plan), then Ditech will provide Mr. Simpson with the following severance
benefits:



The
severance benefits are conditional upon Mr. Simpson delivering to the company an effective, general release of claims in favor of the company.

For
purposes of the letter agreement, "Cause" means: (i) violation of any material provision of Mr. Simpson's Employee Proprietary Information and Inventions Agreement;
(ii) any act of theft or dishonesty; (iii) participation in any immoral or illegal act that has had or could reasonably be expected to have or had a detrimental effect on the business or
reputation of the company; or (iv) material failure to use reasonable efforts to perform reasonably requested tasks after written notice and a reasonable opportunity to comply with such notice.

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Change in Control Severance Benefit Plan.On August 18, 2006, the Compensation Committee adopted a Change in Control Severance
Benefit Plan,
which it amended on September 24, 2007. Each person, during such time as they are a participant in the Severance Plan, is referred to as a "participant."

A
participant in the Severance Plan will receive, if the participant's employment with Ditech is terminated due to an "involuntary termination without cause" or a "constructive
termination" (as those terms are defined in the Severance Plan), in either case within one (1) month prior to or twelve (12) months following a "change in control" (defined in the
Severance Plan), the following benefits:



For
purposes of the Severance Plan:

"Change
in control" means one of the following events or a series of more than one of the following events that are related, wherein the stockholders of Ditech immediately before the
transaction do not retain immediately after the transaction, in substantially the same proportions as their ownership of shares of Ditech's voting stock immediately before the transaction, direct or
indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding voting stock of Ditech, the resulting entity in a merger or, in the case of an
asset sale, the corporation or corporations to which the assets of Ditech were transferred:



"Constructive
termination" means a resignation by a participant of employment with the Company after one of the following is undertaken without the participant's express written consent:



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Notwithstanding
the foregoing, a resignation shall not be deemed a constructive termination unless (x) the participant provides Ditech with written notice that the participant
believes that an event described above has occurred, (y) the constructive termination notice is given within three (3) months of the date the event occurred, and (z) Ditech does
not rescind or cure the conduct giving rise to the event within fifteen (15) days of receipt by Ditech of the constructive termination notice.

"Involuntary
termination without cause" means an involuntary termination of employment by Ditech other than for one of the following reasons:



In
order to be eligible for benefits under the Severance Plan, the participant must execute a general release of claims against Ditech. The Severance Plan provides that Ditech may reduce
the amount of severance payable under the Severance Plan by the amount, if any, payable to an individually negotiated written contract or written agreement relating to severance or change in control
benefits.

Stock Option Plans.Under the terms of our stock option plans, if stock options are not assumed in connection with a change in control
of Ditech,
then the stock options will vest in full and then terminate at the closing of the change in control.

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Compensation of Directors

The following table shows for the fiscal year ended April 30, 2009, certain information with respect to the compensation of all
non-employee directors of Ditech:

Director Compensation in Fiscal 2009

Name

Fees earned or
paid in cash
($)

Options
Awards
($)(1)

Total
($)Gregory M. Avis





7,424

$
7,424Francis (Fran) A. Dramis, Jr.


35,500


7,424

$
42,924Edwin L. Harper


51,250


7,424

$
58,974William A. Hasler


43,000


7,424

$
50,424Andrei M. Manoliu, Ph.D.


45,000


7,424

$
52,424David M. Sugishita


50,500


7,424

$
52,924






The
following options were outstanding as of April 30, 2009: Mr. Avis: 50,000; Mr. Harper: 75,000; Mr. Hasler: 50,000; Dr. Manoliu: 50,000;
Mr. Sugishita: 50,000; and Mr. Dramis 45,000.

The
following table sets forth each grant of options to Ditech's non-employee directors during fiscal 2009 under the 1999 Non-Employee Directors' Stock Option
Plan, as amended ("Directors' Plan"), together with the exercise price per share and grant fair value of each award computed in accordance with FAS 123(R) using the Black-Scholes model.

Name

Options
Granted in
Fiscal 2009

Grant Date

Exercise Price
Per Share
($)

Grant Date
Fair Value of
Option Award
($)Gregory M. Avis


10,000


9/12/08

$
1.37


7,424Francis (Fran) A. Dramis, Jr.


10,000


9/12/08

$
1.37


7,424Edwin L. Harper


10,000


9/12/08

$
1.37


7,424William A. Hasler


10,000


9/12/08

$
1.37


7,424Andrei M. Manoliu, Ph.D.


10,000


9/12/08

$
1.37


7,424David M. Sugishita


10,000


9/12/08

$
1.37


7,424


Standard Cash Compensation Arrangements With Outside Directors.During fiscal 2009, the standard amounts of cash compensation for our
non-employee was as set forth in the table below. Fees

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are
paid quarterly in arrears. Additionally, directors are entitled to be reimbursed for certain expenses in connection with attendance at board and committee meetings.

Cash PaymentAnnual Retainer:Board Members

$
25,000Chairman of the Board (additional)(1)

$
15,000Audit Committee Chairperson

$
7,500Compensation Committee Chairperson

$
5,000Corporate Governance and Nominating Committee Chairperson

$
5,000Meeting Fees:Board of DirectorsAnnual offsite regular meeting

$
2,500Regular meeting

$
1,000Special (telephonic)

$
500Audit CommitteeRegular meeting

$
2,500Special (in person)

$
1,000Special (telephonic)

$
750Compensation CommitteeRegular meeting

$
2,000Special

$
750Corporate Governance and Nominating CommitteeRegular meeting

$
2,000Special

$
750






Equity Compensation for Outside Directors.Pursuant to the Directors' Plan, upon initial appointment, each non-employee director is
automatically granted an option to purchase 35,000 shares of Ditech's Common Stock, which is subject to annual vesting over a four-year period from the date of grant. In addition, each
non-employee director will automatically be granted a fully-vested option to purchase 10,000 shares of Ditech's Common Stock immediately following each annual meeting of stockholders;
provided, that such person has served as a non-employee director of Ditech for at least six months as of the date of the applicable
annual meeting of stockholders. These options are granted at 100% of the fair market value of the Common Stock on the date of grant and have a five-year term. Pursuant to the Directors'
Plan, the initial grants and the annual grants are non-discretionary and are granted automatically, without any further action by Ditech, the Board or the stockholders. The Directors' Plan
expired in March 2009. The Board agreed in July 2009, that similar grant levels, terms and conditions will continue under other shareholder approved plans, that currently exist, such as
the 2006 Equity Incentive Plan.

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Item 12Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

SECURITY OWNERSHIP OF  CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the ownership of our common stock as of July 31, 2009 by:
(1) each director; (2) each of the executive officers named in the Summary Compensation Table; (3) all our executive officers and directors as a group; and (4) all those
known by us to be beneficial owners of more than five percent of our common stock, if any. We do not have any class of equity securities outstanding other than our common stock.

Beneficial Owner

Beneficial Ownership(1)Name and Address

Number of Shares

Percent of TotalFMR Corp., et al(2)


3,234,000


12.29Lamassu Holdings LLC(3)


2,399,845


9.12Morgan Stanley(4)


2,209,442


8.40Dimensional Fund Advisors LP(5)


2,136,721


8.12Lloyd I. Miller, III(6)


1,540,694


5.86The PNC Financial Services Group, Inc.(7)


1,536,911


5.84Renaissance Technologies LLC(8)


1,323,900


5.03Dr. Todd G. Simpson(9)


609,481


2.27William J. Tamblyn(10)


868,328


3.21Lowell B. Trangsrud(11)


674,080


2.50William A. Hasler(12)


109,640


*Edwin L. Harper(13)


125,000


*David M. Sugishita(14)


78,097


*Dr. Andrei M. Manoliu(15)


103,000


*Gregory M. Avis(16)


50,000


*Francis (Fran) A. Dramis, Jr.(17)


45,000


*All current directors and executive officers as a group (9 persons)(18)


2,662,626


9.34


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Equity Compensation Plan Information

The following table provides certain information with respect to all of our equity compensation plans and grants made outside of any
plans in effect as of April 30, 2009:

Plan Category

Number of Securities
to be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights(a)

Weighted-average
Exercise Price of
Outstanding Options,
Warrants, and Rights(b)

Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(excluding securities
reflected in column (a))(c)Equity Compensation Plans Approved by Security Holders(1)


4,654,784

$
5.61


1,837,915Equity Compensation Plans Not Approved by Security Holders(2)


389,060

$
8.06


1,066,513Total


5,043,844

$
5.80


2,904,428


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Description of Equity Compensation Plans Adopted Without the Approval of Stockholders

The following equity compensation plans of Ditech were in effect as of April 30, 2009 and were adopted without the approval of
our stockholders: the 1999
Non-Officer Equity Incentive Plan, the 2005 New Recruit Stock Plan, and the 2005 New Recruit Stock Option Plan.

1999 Non-officer Equity Incentive Plan

The material features of Ditech's 1999 Non-Officer Equity Incentive Plan (the "1999 Plan") are outlined below:

General

The 1999 Plan provides for the grant of nonstatutory stock options, stock bonuses and rights to purchase restricted stock (collectively
"awards"). To date, we have granted only stock options under the 1999 Plan. An aggregate of 1,000,000 shares of Common Stock is reserved for issuance under the 1999 Plan.

Eligibility

Employees and consultants of both Ditech and our affiliates who are not officers or directors of Ditech or any of our affiliates are
eligible to receive all types of awards under the 1999 Plan, except that officers who have not been previously employed by Ditech are eligible to receive awards if the

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award
is granted as an inducement essential to such officers entering into an employment contract with Ditech.

Term of Awards

Exercise Price; Payment.The exercise price of nonstatutory options may not be less than 85% of the fair market value of the stock on
the date of
grant. The purchase price of restricted stock purchase awards may not be less than 85% of the fair market value of the stock on the date of grant. Stock bonuses may be awarded in consideration for
past services actually rendered to Ditech or our affiliates.

The
exercise price of options and restricted stock purchase awards granted under the 1999 Plan must be paid either in cash at the time the option is exercised (or at the time the
restricted stock is purchased) or, at the discretion of the Board, (i) pursuant to a deferred payment arrangement or (ii) in any other form of legal consideration acceptable to the
Board. The exercise price of options may also be paid, at the discretion of the Board, by delivery of other shares of our Common Stock.

Award Vesting.Awards granted under the 1999 Plan may become exercisable (in the case of options) or released from a repurchase option
in favor of
Ditech (in the case of stock bonuses and restricted stock purchase awards) in cumulative increments ("vest") as determined by the Board. The Board has the power to accelerate the time during which an
option or a restricted stock purchase award may vest or be exercised. In addition, options granted under the 1999 Plan may permit exercise prior to vesting, but in such event the participant may be
required to enter into an early exercise stock purchase agreement that allows Ditech to repurchase unvested shares, generally at their exercise price, should the participant's service terminate before
vesting.

Term.The maximum term of options granted under the 1999 Plan is 10 years. Options under the 1999 Plan generally terminate three
months after
termination of the participant's service, subject to extension in certain circumstances. Ditech generally may repurchase shares that have been issued pursuant to stock bonuses or restricted stock
purchase awards granted under the 1999 Plan but have not yet vested as of the date the participant terminates his or her service with Ditech.

Effect of Certain Corporate Transactions.In the event of (i) a dissolution or liquidation of Ditech or (ii) certain
specified types of
merger, consolidation or similar transactions (collectively, a "corporate transaction"), any surviving or acquiring corporation may assume options outstanding under the Option
Plan or may substitute similar options. If any surviving or acquiring corporation does not assume such options or substitute similar options, then with respect to options held by option holders whose
service with Ditech or an affiliate has not terminated as of the effective date of the corporate transaction, the vesting of such options (and, if applicable, the time during which such options may be
exercised) will be accelerated in full and the options will terminate if not exercised at or prior to such effective date.

2005 New Recruit Stock Plan

In connection with our acquisition of Jasomi Networks on June 30, 2005, the Board of Directors adopted the 2005 New Recruit
Stock Plan. The 2005 New Recruit Stock Plan does not require approval by our stockholders due to its qualification under the "inducement grant exception" provided by Rule 4350(i)(1)(A)(iv) of
the NASD Marketplace Rules. The 2005 New Recruit Stock Plan provides for the grant of restricted stock awards and restricted stock unit awards to newly-hired employees as an inducement for those
individuals to enter into an employment relationship with Ditech or its affiliates. For purposes of the 2005 New Recruit Stock Option Plan, eligible employees includes only those individuals newly
hired by Ditech or its affiliates, so long as those persons either (i) were not previously employed or serving as a director of Ditech or its affiliates, or (ii) entered into an
employment relationship with us following abona fideperiod of non-employment. The aggregate number of shares of common stock that may be
issued pursuant to restricted stock awards and restricted stock unit awards under the 2005 New Recruit Stock Plan is 500,000 shares. Jasomi Networks employees hired by

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Ditech
received grants of restricted stock or restricted stock units that vested with respect to 1/3 of the shares subject to their award on the first anniversary of the grant date, and
with respect to the balance of the shares in a series of eight (8) successive equal quarterly installments over the two year period measured from the first anniversary of the grant date. All
grants under the 2005 New Recruit Stock Plan to eligible employees must be approved either by a majority of "independent directors" within the meaning of Rule 4200 of the NASD Marketplace
Rules, or by our Compensation Committee.

2005 New Recruit Stock Option Plan

In November 2005, the Board adopted the 2005 New Recruit Stock Option Plan. The 2005 New Recruit Stock Option Plan does not require
approval by our stockholders due to its qualification under the "inducement grant exception" provided by Rule 4350(i)(1)(A)(iv) of the NASD Marketplace Rules. The 2005 New Recruit Stock Option
Plan provides for the grant of nonstatutory stock options to newly-hired employees as an inducement for those individuals to enter into an employment relationship with Ditech or its affiliates. For
purposes of the 2005 New Recruit Stock Option Plan, eligible employees includes only those individuals newly hired by Ditech or its
affiliates, so long as those persons either (i) were not previously employed or serving as a director of Ditech or its affiliates, or (ii) entered into an employment relationship with us
following abona fideperiod of non-employment. The aggregate number of shares of common stock that may be issued pursuant to nonstatutory
stock options under the 2005 New Recruit Stock Option Plan is 500,000 shares. Such number includes the 300,000 shares added to the reserve in connection with the hiring of a new Vice President of
Worldwide Sales in February 2006. All grants under the 2005 New Recruit Stock Plan to eligible employees must be approved either by a majority of "independent directors" within the meaning of
Rule 4200 of the NASD Marketplace Rules, or by our Compensation Committee.

Item 13Certain Relationships and Related Transactions, and Director Independence

Certain Relationships And Related Party Transactions

Ditech has entered into indemnity agreements with certain officers and directors which provide, among other things, that Ditech will
indemnify such officer or director, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines and settlements he or she may be required to pay in actions
or proceedings which he or she is or may be made a party by reason of his or her position as a director, officer or other agent of Ditech, and otherwise to the fullest extent permitted under Delaware
law and Ditech's By-laws.

Policies And Procedures For Review Of Related Party Transactions

Pursuant to the charter of our Audit Committee, unless previously approved by another independent committee of our Board of Directors,
our Audit Committee reviews and, if determined appropriate, approves all related person transactions. It is management's responsibility to bring related person transactions to the attention of the
members of the Audit Committee.

Our
Code of Conduct and Ethics provides that our employees, including our officers and directors, should avoid conflicts of interest that occur when their personal interests may
interfere in any way with
the performance of their duties or the best interests of Ditech. Our Code of Conduct and Ethics also addresses specific types of related person transactions and how they should be addressed. All of
our employees, including our officers and directors, are expected and required to adhere to the Code of Conduct and Ethics. If an officer or director has any questions regarding whether a potential
transaction would be in violation of the Code of Conduct and Ethics, they are required to bring this to the attention of our Compliance Officer or General Counsel. If the potential transaction is a
related person transaction, it would be recognized as such and brought to the Audit Committee for pre-approval.

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Further,
each of our officers and directors is knowledgeable regarding the requirements of obtaining approval of related person transactions and is responsible for identifying any
related-person transaction involving such officer or director or his or her affiliates and immediate family members and seeking approval from our Audit Committee before he or she or, with respect to
immediate family members, any of their affiliates, may engage in the transaction.

Our
Audit Committee will take into account all relevant factors when determining whether to approve or disapprove of any related person transaction.

Director Independence

As required under the rules of The Nasdaq Stock Market (the "Nasdaq Rules"), a majority of the members of a listed company's Board of
Directors must qualify as "independent," as affirmatively determined by the Board of Directors. The Board consults with Ditech's counsel to ensure that the Board's determinations are consistent with
all relevant securities and other laws and regulations regarding the definition of "independent," including those set forth in pertinent Nasdaq Rules, as in effect from time to time.

Consistent
with these considerations, after review of all relevant transactions or relationships between each director, or any of his family members, and Ditech, its senior management
and its independent registered public accounting firm, the Board affirmatively has determined that all of Ditech's current directors are independent directors within the meaning of the applicable
Nasdaq Rules, except for Dr. Simpson, who is Ditech's President and Chief Executive Officer. The remaining members of the Board, Gregory M. Avis, Francis (Fran) Dramis Jr.,
Edwin L. Harper, William A. Hasler, Dr. Andrei M. Manoliu, and David M. Sugishita, are all independent.

Item 14Principal Accountant Fees and Services

The following table represents aggregate fees billed to Ditech Networks for fiscal years ended April 30, 2009 and
April 30, 2008 by Burr, Pilger & Mayer LLP and PricewaterhouseCoopers LLP. PricewaterhouseCoopers LLP had audited Ditech's financial statements since April 1998. On
July 30, 2008, Ditech dismissed PricewaterhouseCoopers LLP as its independent registered public accounting firm and engaged Burr, Pilger & Mayer LLP to be Ditech's
independent registered public accounting firm. for professional services rendered.

Fiscal Year Ended2009

2008(in thousands)Audit Fees

$
410

$
584Audit-related Fees





Tax Fees





All Other Fees





Total Fees

$
410

$
584


All
fees described above were approved by the Audit Committee.

Pre-Approval Policies And Procedures

The Audit Committee has adopted a policy and procedures for the pre-approval of audit and non-audit services
rendered by our independent registered public accounting firm, Burr, Pilger & Mayer LLP. The policy generally pre-approves specified services in the defined categories of
audit and audit-related services, and tax services up to specified amounts. Pre-approval may also be given as part of the Audit Committee's approval of the scope of the engagement of the
independent registered public accounting firm or on an individual explicit case-by-case basis before the independent registered

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public
accounting firm is engaged to provide each service. The pre-approval of services may be delegated to one or more of the Audit Committee's members, but the decision must be reported
to the full Audit Committee at its next scheduled meeting. The Audit Committee has determined that the rendering of the services other than audit services by Burr, Pilger & Mayer LLP is
compatible with maintaining the principal accountant's independence, within these defined categories of audit related and tax services.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

DITECH NETWORKS, INC.August 28, 2009

By:

/s/ TODD SIMPSON Todd Simpson Chief Executive Officer and President
(Principal Executive Officer)August 28, 2009

By:

/s/ WILLIAM J. TAMBLYN William J. Tamblyn Chief Financial Officer
(Principal Financial and Accounting Officer)


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Exhibit Index        To Amendment No. 1 to Annual Report on Form 10-K/A

Exhibit

Description of document31.1

Certification by Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2

Certification by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002


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