Exhibit 10.3  DITECH NETWORKS, INC.  1999 EMPLOYEE STOCK PURCHASE PLAN  Approved by the Board of Directors March 5, 1999 Approved by Stockholders April 21, 1999 Amended by the Board of Directors July 25, 2000 Amendment Approved by Stockholders September 22, 2000 Amended by the Board of Directors July 12, 2001 Amendment Approved by Stockholders September 21, 2001 Amended by the Board of Directors November 14, 2001 Amended by the Board of Directors June 6, 2002 Amendment Approved by Stockholders September 20, 2002 Amended by the Board of Directors 
May 16, 2003 Amendment Approved by the Stockholders September 19, 2003 Amended by the Board of Directors May 12, 2006 Subject to Approval by Stockholders September 15, 2006 Amended by the Board of Directors May 8, 2009  1.PURPOSE.  (a)The purpose of this Employee
Stock Purchase Plan (the Plan) is to provide a means by which employees of
Ditech Networks, Inc. (the Company) and its Affiliates, as defined in
subparagraph 1(b), which are designated as provided in subparagraph 2(b), may
be given an opportunity to purchase common stock of the Company.  (b)The word Affiliate as used
in the Plan means any parent corporation or subsidiary corporation of the
Company, as those terms are defined in Sections 424(e) and (f),
respectively, of the Internal Revenue Code of 1986, as amended (the Code).  (c)The Company, by means of the
Plan, seeks to retain the services of its employees, to secure and retain the
services of new employees, and to provide incentives for such persons to exert
maximum efforts for the success of the Company.  (d)The Company intends that the
rights to purchase stock of the Company granted under the Plan be considered
options issued under an employee stock purchase plan as that term is defined
in Section 423(b) of the Code.  2.ADMINISTRATION.  (a)The Plan shall be
administered by the Board of Directors (the Board) of the Company unless and
until the Board delegates administration to a Committee, as provided in
subparagraph 2(c).  Whether or not the
Board has delegated administration, the Board shall have the final power to
determine all questions of policy and expediency that may arise in the
administration of the Plan.  1


(b)The Board shall have the
power, subject to, and within the limitations of, the express provisions of the
Plan:  (i)To determine when and how
rights to purchase stock of the Company shall be granted and the provisions of
each offering of such rights (which need not be identical).  (ii)To designate from time to
time which Affiliates of the Company shall be eligible to participate in the
Plan.  (iii)To construe and interpret
the Plan and rights granted under it, and to establish, amend and revoke rules and
regulations for its administration.  The
Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan, in a manner and to the extent it shall deem
necessary or expedient to make the Plan fully effective.  (iv)To amend the Plan as provided
in paragraph 13.  (v)Generally, to exercise such
powers and to perform such acts as the Board deems necessary or expedient to
promote the best interests of the Company and its Affiliates and to carry out
the intent that the Plan be treated as an employee stock purchase plan within
the meaning of Section 423 of the Code.  (c)The Board may delegate
administration of the Plan to a Committee composed of not fewer than two (2) members
of the Board (the Committee).  If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore
possessed by the Board, subject, however, to such resolutions, not inconsistent
with the provisions of the Plan, as may be adopted from time to time by the
Board.  The Board may abolish the
Committee at any time and revest in the Board the administration of the Plan.  3.SHARES
SUBJECT TO THE PLAN.  (a)Subject to the provisions of
paragraph 12 relating to adjustments upon changes in stock, the stock that may
be sold pursuant to rights granted under the Plan shall not exceed in the
aggregate one million eight hundred sixteen thousand six hundred sixty-six
(1,816,666) shares of the Companys common stock (the Common Stock), such
number includes an additional increase of four hundred thousand (400,000)
shares of Common Stock authorized by the Board on May 12, 2006, subject to
stockholder approval at the 2006 Annual Meeting of Stockholders.  If any right granted under the Plan shall for
any reason terminate without having been exercised, the Common Stock not
purchased under such right shall again become available for the Plan.  (b)The stock subject to the
Plan may be unissued shares or reacquired shares, bought on the market or
otherwise.  4.GRANT
OF RIGHTS; OFFERING.  The
Board or the Committee may from time to time grant or provide for the grant of
rights to purchase Common Stock of the Company under the Plan to eligible
employees (an  2


Offering)
on a date or dates (the Offering Date(s)) selected by the Board or the
Committee.  Each Offering shall be in
such form and shall contain such terms and conditions as the Board or the
Committee shall deem appropriate, which shall comply with the requirements of Section 423(b)(5) of
the Code that all employees granted rights to purchase stock under the Plan
shall have the same rights and privileges. 
The terms and conditions of an Offering shall be incorporated by
reference into the Plan and treated as part of the Plan.  The provisions of separate Offerings need not
be identical, but each Offering shall include (through incorporation of the
provisions of this Plan by reference in the document comprising the Offering or
otherwise) the period during which the Offering shall be effective, which
period shall not exceed twenty-seven (27) months beginning with the Offering
Date, and the substance of the provisions contained in paragraphs 5
through 8, inclusive.  5.ELIGIBILITY.  (a)Rights may be granted only
to employees of the Company or, as the Board or the Committee may designate as
provided in subparagraph 2(b), to employees of any Affiliate of the
Company.  Except as provided in
subparagraph 5(b), an employee of the Company or any Affiliate shall not be
eligible to be granted rights under the Plan unless, on the Offering Date, such
employee has been in the employ of the Company or any Affiliate for such
continuous period preceding such grant as the Board or the Committee may
require, but in no event shall the required period of continuous employment be
greater than two (2) years.  In
addition, unless otherwise determined by the Board or the Committee and set
forth in the terms of the applicable Offering, no employee of the Company or
any Affiliate shall be eligible to be granted rights under the Plan, unless, on
the Offering Date, such employees customary employment with the Company or
such Affiliate is for at least twenty (20) hours per week and at least five (5) months
per calendar year.  (b)The Board or the Committee
may provide that each person who, during the course of an Offering, first
becomes an eligible employee of the Company or designated Affiliate will, on a
date or dates specified in the Offering which coincides with the day on which
such person becomes an eligible employee or occurs thereafter, receive a right
under that Offering, which right shall thereafter be deemed to be a part of
that Offering.  Such right shall have the
same characteristics as any rights originally granted under that Offering, as
described herein, except that:  (i)the date on which such right
is granted shall be the Offering Date of such right for all purposes,
including determination of the exercise price of such right;  (ii)the period of the Offering
with respect to such right shall begin on its Offering Date and end coincident
with the end of such Offering; and  (iii)the Board or the Committee
may provide that if such person first becomes an eligible employee within a
specified period of time before the end of the Offering, he or she will not
receive any right under that Offering.  3


(c)No employee shall be
eligible for the grant of any rights under the Plan if, immediately after any
such rights are granted, such employee owns stock possessing five percent (5%)
or more of the total combined voting power or value of all classes of stock of
the Company or of any Affiliate.  For
purposes of this subparagraph 5(c), the rules of Section 424(d) of
the Code shall apply in determining the stock ownership of any employee, and
stock which such employee may purchase under all outstanding rights and options
shall be treated as stock owned by such employee.  (d)An eligible employee may be
granted rights under the Plan only if such rights, together with any other
rights granted under employee stock purchase plans of the Company and any
Affiliates, as specified by Section 423(b)(8) of the Code, do not
permit such employees rights to purchase stock of the Company or any Affiliate
to accrue at a rate which exceeds twenty-five thousand dollars ($25,000) of
fair market value of such stock (determined at the time such rights are
granted) for each calendar year in which such rights are outstanding at any
time.  (e)Officers of the Company and
any designated Affiliate shall be eligible to participate in Offerings under
the Plan; provided, however, that the Board may
provide in an Offering that certain employees who are highly compensated
employees within the meaning of Section 423(b)(4)(D) of the Code
shall not be eligible to participate.  6.RIGHTS;
PURCHASE PRICE.  (a)On each Offering Date, each
eligible employee, pursuant to an Offering made under the Plan, shall be
granted the right to purchase up to the number of shares of Common Stock of the
Company purchasable with a percentage designated by the Board or the Committee
not exceeding fifteen percent (15%) of such employees Earnings (as defined in
subparagraph 7(a)) during the period which begins on the Offering Date (or such
later date as the Board or the Committee determines for a particular Offering)
and ends on the date stated in the Offering, which date shall be no later than
the end of the Offering.  The Board or
the Committee shall establish one or more dates during an Offering (the Purchase
Date(s)) on which rights granted under the Plan shall be exercised and
purchases of Common Stock carried out in accordance with such Offering.  (b)In connection with each
Offering made under the Plan, the Board or the Committee may specify a maximum
number of shares that may be purchased by any employee as well as a maximum
aggregate number of shares that may be purchased by all eligible employees
pursuant to such Offering.  In addition,
in connection with each Offering that contains more than one Purchase Date, the
Board or the Committee may specify a maximum aggregate number of shares which
may be purchased by all eligible employees on any given Purchase Date under the
Offering.  If the aggregate purchase of shares
upon exercise of rights granted under the Offering would exceed any such
maximum aggregate number, the Board or the Committee shall make a pro rata
allocation of the shares available in as nearly a uniform manner as shall be
practicable and as it shall deem to be equitable.  (c)The purchase price of stock
acquired pursuant to rights granted under the Plan shall be not less than the
lesser of:  4


(i)an amount equal to
eighty-five percent (85%) of the fair market value of the stock on the Offering
Date; or  (ii)an amount equal to
eighty-five percent (85%) of the fair market value of the stock on the Purchase
Date.  7.PARTICIPATION;
WITHDRAWAL; TERMINATION.  (a)An eligible employee may
become a participant in the Plan pursuant to an Offering by delivering a
participation agreement to the Company within the time specified in the
Offering, in such form as the Company provides. 
Each such agreement shall authorize payroll deductions of up to the
maximum percentage specified by the Board or the Committee of such employees
Earnings during the Offering.  Earnings
is defined as an employees wages (including amounts thereof elected to be
deferred by the employee, that would otherwise have been paid, under any
arrangement established by the Company that is intended to comply with Section 125,
Section 401(k), Section 402(h) or Section 403(b) of
the Code or that provides non-qualified deferred compensation), which shall
include overtime pay, bonuses and commissions, but shall exclude incentive pay,
profit sharing, other remuneration paid directly to the employee, the cost of
employee benefits paid for by the Company or an Affiliate, education or tuition
reimbursements, imputed income arising under any group insurance or benefit
program, traveling expenses, business and moving expense reimbursements, income
received in connection with stock options, contributions made by the Company or
an Affiliate under any employee benefit plan, and similar items of
compensation, as determined by the Board or the Committee.  The payroll deductions made for each
participant shall be credited to an account for such participant under the Plan
and unless otherwise provided in the document comprising an Offering shall be
deposited with the general funds of the Company.  A participant may reduce (including to zero)
or increase such payroll deductions, and an eligible employee may begin such
payroll deductions, after the beginning of any Offering only as provided for in
the Offering.  A participant may make
additional payments into his or her account only if specifically provided for
in the Offering and only if the participant has not had the maximum amount
withheld during the Offering.  (b)At any time during an
Offering, a participant may terminate his or her payroll deductions under the
Plan and withdraw from the Offering by delivering to the Company a notice of
withdrawal in such form as the Company provides.  Such withdrawal may be elected at any time
prior to the end of the Offering except as provided by the Board or the Committee
in the Offering.  Upon such withdrawal
from the Offering by a participant, the Company shall distribute to such
participant all of his or her accumulated payroll deductions (reduced to the
extent, if any, such deductions have been used to acquire stock for the
participant) under the Offering, without interest, and such participants
interest in that Offering shall be automatically terminated.  A participants withdrawal from an Offering
will have no effect upon such participants eligibility to participate in any
other Offerings under the Plan but such participant will be required to deliver
a new participation agreement in order to participate in subsequent Offerings
under the Plan.  (c)Rights granted pursuant to
any Offering under the Plan shall terminate immediately upon cessation of any
participating employees employment with the Company and  5


any designated Affiliate, for any reason, and the
Company shall distribute to such terminated employee all of his or her
accumulated payroll deductions (reduced to the extent, if any, such deductions
have been used to acquire stock for the terminated employee), under the
Offering, without interest.  (d)Rights granted under the
Plan shall not be transferable by a participant otherwise than by will or the
laws of descent and distribution, or by a beneficiary designation as provided
by the Board and, otherwise during his or her lifetime, shall be exercisable
only by the person to whom such rights are granted.  8.EXERCISE.  (a)On each Purchase Date
specified therefor in the relevant Offering, each participants accumulated
payroll deductions and other additional payments specifically provided for in
the Offering (without any increase for interest) will be applied to the
purchase of whole shares of stock of the Company, up to the maximum number of
shares permitted pursuant to the terms of the Plan and the applicable Offering,
at the purchase price specified in the Offering.  No fractional shares shall be issued upon the
exercise of rights granted under the Plan. 
The amount, if any, of accumulated payroll deductions remaining in each
participants account after the purchase of shares which is less than the
amount required to purchase one share of stock on the final Purchase Date of an
Offering shall be held in each such participants account for the purchase of
shares under the next Offering under the Plan, unless such participant
withdraws from such next Offering, as provided in subparagraph 7(b), or is no
longer eligible to be granted rights under the Plan, as provided in
paragraph 5, in which case such amount shall be distributed to the
participant after such final Purchase Date, without interest.  The amount, if any, of accumulated payroll
deductions remaining in any participants account after the purchase of shares
which is equal to the amount required to purchase whole shares of stock on the
final Purchase Date of an Offering shall be distributed in full to the
participant after such Purchase Date, without interest.  (b)No rights granted under the
Plan may be exercised to any extent unless the shares to be issued upon such
exercise under the Plan (including rights granted thereunder) are covered by an
effective registration statement pursuant to the Securities Act of 1933, as
amended (the Securities Act) and the Plan is in material compliance with all
applicable state, foreign and other securities and other laws applicable to the
Plan.  If on a Purchase Date in any
Offering hereunder the Plan is not so registered or in such compliance, no
rights granted under the Plan or any Offering shall be exercised on such
Purchase Date, and the Purchase Date shall be delayed until the Plan is subject
to such an effective registration statement and such compliance, except that
the Purchase Date shall not be delayed more than twelve (12) months and the
Purchase Date shall in no event be more than twenty-seven (27) months from the
Offering Date.  If on the Purchase Date
of any Offering hereunder, as delayed to the maximum extent permissible, the
Plan is not registered and in such compliance, no rights granted under the Plan
or any Offering shall be exercised and all payroll deductions accumulated
during the Offering (reduced to the extent, if any, such deductions have been used
to acquire stock) shall be distributed to the participants, without interest.  6


9.COVENANTS
OF THE COMPANY.  (a)During the terms of the
rights granted under the Plan, the Company shall keep available at all times
the number of shares of stock required to satisfy such rights.  (b)The Company shall seek to
obtain from each federal, state, foreign or other regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the rights granted under the
Plan.  If, after reasonable efforts, the
Company is unable to obtain from any such regulatory commission or agency the
authority which counsel for the Company deems necessary for the lawful issuance
and sale of stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell stock upon exercise of such rights
unless and until such authority is obtained.  10.USE OF
PROCEEDS FROM STOCK.  Proceeds
from the sale of stock pursuant to rights granted under the Plan shall
constitute general funds of the Company.  11.RIGHTS
AS A STOCKHOLDER.  A
participant shall not be deemed to be the holder of, or to have any of the
rights of a holder with respect to, any shares subject to rights granted under
the Plan unless and until the participants shareholdings acquired upon
exercise of rights under the Plan are recorded in the books of the Company.  12.ADJUSTMENTS
UPON CHANGES IN STOCK.  (a)If any change is made in the
stock subject to the Plan, or subject to any rights granted under the Plan, due
to a change in corporate capitalization and without the receipt of
consideration by the Company (through reincorporation, stock dividend, stock
split, reverse stock split, combination or reclassification of shares), the
Plan will be appropriately and proportionately adjusted in the class(es) and
maximum number of securities subject to the Plan pursuant to subsection 3(a),
and the outstanding rights will be appropriately adjusted in the class(es) and
number of securities and price per share of stock subject to such outstanding
rights.  Such adjustments shall be made
by the Board, the determination of which shall be final, binding and
conclusive.  (b)In the event of:  (1) a dissolution or liquidation of the
Company; (2) a sale of all or substantially all of the assets of the
Company, (3) a merger or consolidation in which the Company is not the
surviving corporation, (4) a reverse merger in which the Company is the
surviving corporation but the shares of Common Stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise, (5) an acquisition
by any person, entity or group within the meaning of Section 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended (the Exchange
Act), or any comparable successor provisions (excluding any employee benefit
plan, or related trust, sponsored or maintained by the Company or a Subsidiary)
of the beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act, or comparable  7


successor rule) of securities of the Company
representing at least fifty percent (50%) of the combined voting power entitled
to vote in the election of Directors, or (6) the individuals who, as of
the date of the adoption of this Plan, are members of the Board (the Incumbent
Board), cease for any reason to constitute at least fifty percent (50%) of the
Board (if the election, or nomination for election, by the Companys
stockholders of any new director was approved by a vote of at least fifty
percent (50%) of the Incumbent Board, such new director shall be considered as
a member of the Incumbent Board), then, as determined by the Board in its sole
discretion, (i) any surviving corporation may assume outstanding rights or
substitute similar rights for those under the Plan, (ii) such rights may
continue in full force and effect, or (iii) participants accumulated
payroll deductions may be used to purchase Common Stock immediately prior to
the transaction described above and the participants rights under the ongoing
Offering terminated.  13.AMENDMENT
OF THE PLAN.  (a)The Board at any time, and
from time to time, may amend the Plan. 
However, except as provided in paragraph 12 relating to adjustments
upon changes in stock, no amendment shall be effective unless approved by the
stockholders of the Company within twelve (12) months before or after the
adoption of the amendment, where the amendment will:  (i)Increase the number of
shares reserved for rights under the Plan;  (ii)Modify the provisions as to
eligibility for participation in the Plan (to the extent such modification
requires stockholder approval in order for the Plan to obtain employee stock
purchase plan treatment under Section 423 of the Code or to comply with
the requirements of Rule 16b-3 promulgated under the Securities Exchange
Act of 1934, as amended (Rule 16b-3)); or  (iii)Modify the Plan in any other
way if such modification requires stockholder approval in order for the Plan to
obtain employee stock purchase plan treatment under Section 423 of the
Code or to comply with the requirements of Rule 16b-3.  It
is expressly contemplated that the Board may amend the Plan in any respect the
Board deems necessary or advisable to provide eligible employees with the
maximum benefits provided or to be provided under the provisions of the Code
and the regulations promulgated thereunder relating to employee stock purchase
plans and/or to bring the Plan and/or rights granted under it into compliance
therewith.  (b)Rights and obligations under
any rights granted before amendment of the Plan shall not be impaired by any
amendment of the Plan, except with the consent of the person to whom such
rights were granted, or except as necessary to comply with any laws or
governmental regulations, or except as necessary to ensure that the Plan and/or
rights granted under the Plan comply with the requirements of Section 423
of the Code.  8


14.TERMINATION
OR SUSPENSION OF THE PLAN.  (a)The Board in its discretion,
may suspend or terminate the Plan at any time. 
No rights may be granted under the Plan while the Plan is suspended or
after it is terminated.  (b)Rights and obligations under
any rights granted while the Plan is in effect shall not be altered or impaired
by suspension or termination of the Plan, except as expressly provided in the Plan
or with the consent of the person to whom such rights were granted, or except
as necessary to comply with any laws or governmental regulation, or except as
necessary to ensure that the Plan and/or rights granted under the Plan comply
with the requirements of Section 423 of the Code.  15.EFFECTIVE
DATE OF PLAN.  The
Plan shall become effective on the day immediately prior to the effectiveness
of the Companys registration statement under the Securities Act with respect
to the initial public offering of shares of the Companys Common Stock (the Effective
Date), but no rights granted under the Plan shall be exercised unless and
until the Plan has been approved by the stockholders of the Company within
twelve (12) months before or after the date the Plan is adopted by the Board or
the Committee, which date may be prior to the Effective Date.  9