Exhibit
10.28  DITECH NETWORKS, INC.  AMENDED AND RESTATED SEVERANCE BENEFIT PLAN  SECTION 1.INTRODUCTION.  The Ditech Networks, Inc. Amended and Restated Severance Benefit
Plan (the Plan) is hereby established
effective May 27, 2010 (the Effective Date),
which Plan amends and restates the Ditech Networks, Inc. Amended and
Restated Change in Control Severance Benefit Plan adopted December 12, 2008 (the Prior
Plan), which Prior Plan is hereby amended, restated and
superseded in its entirety by this Plan as of the Effective Date.  The purpose of the Plan is to provide for the
payment of severance benefits to certain eligible employees of Ditech Networks, Inc.
and its wholly owned subsidiaries (the Company)
in the event that such employees are subject to qualifying employment
terminations.  This Plan shall supersede
any severance benefit plan, policy or practice previously maintained by the
Company, other than an individually negotiated written contract or written
agreement with the Company relating to severance or change in control benefits
that is in effect on an employees termination date, in which case such
employees severance benefit, if any, shall be governed by the terms of such
individually negotiated written contract or written agreement and shall be
governed by this Plan only to the extent that the reduction pursuant to Section 7(b) below
does not entirely eliminate benefits under this Plan.  This document also is the Summary Plan
Description for the Plan.  SECTION 2.DEFINITIONS.  For purposes of the Plan, the following terms are defined as follows:  (a)Base
Salarymeans the Participants annual base pay (excluding
incentive pay, premium pay, commissions, overtime, bonuses and other forms of
variable compensation), at the rate in effect during the last regularly
scheduled payroll period immediately preceding the date of the Participants
Covered Termination.  (b)Boardmeans the Board of Directors of Ditech Networks, Inc.  (c)Bonus means the higher of: (i) Participants
target annual bonus for the year in which the Covered Termination occurs, or (ii) the
average of Participants annual bonus payments made for the two bonus years
immediately preceding the Covered Termination.  (d)Change
in Controlmeans one of the following events or a series of
more than one of the following events that are related, in which the
stockholders of the Company immediately before the transaction do not retain
immediately after the transaction, in substantially the same proportions as
their ownership of shares of the Company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 the
Company, the resulting entity in a merger or, in the case of an asset sale, the
corporation or corporations to which the assets of the Company were transferred
(the Transferee Corporation(s)), as the
case may be:  1


(i)the direct or
indirect sale or exchange in a single or series of related transactions by the
stockholders of the Company of more than fifty percent (50%) of the voting
stock of the Company;  (ii)a merger or
consolidation in which the Company is a party; or  (iii)the sale, exchange,
or transfer of all or substantially all of the assets of the Company.  For
purposes of this Section 2(d), indirect beneficial ownership shall
include, without limitation, an interest resulting from ownership of the voting
stock of one or more corporations, which as a result of the transaction, own
the Company, the resulting entity or the Transferee Corporation(s), as the case
may be, either directly or through one or more subsidiary corporations.  Prior to the Change in Control, the Board
shall have the right to determine whether multiple sales or exchanges of the
voting stock of the Company or more than one of the preceding events are
related, and its determination shall be final, binding and conclusive.  (e)Change in Control Related Termination
means a Covered Termination in which either: (i) an Involuntary
Termination Without Cause occurs within one (1) month prior to the
effective date of a Change in Control or within twelve (12) months following
the effective date of a Change in Control, or (ii) a Constructive
Termination in which the events undertaken by the Company as specified in Section 2(h) that
give rise to the Participants right to resign due to Constructive Termination
occur within one (1) month prior to the effective date of a Change in
Control or within twelve (12) months following the effective date of a Change
in Control.  (f)Codemeans the
Internal Revenue Code of 1986, as amended.  (g)Companymeans Ditech
Networks, Inc. and its wholly owned subsidiaries or, following a Change in
Control, the surviving entity resulting from such transaction.  (h)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:  (i)a substantial
reduction in the Participants duties or responsibilities (and not simply a
change in title or reporting relationships) in effect immediately prior to such
reduction; provided, however,
that it shall not be a Constructive Termination if, following the effective
date of a Change in Control, either (a) the Company is retained as a
separate legal entity or business unit and the Participant holds the same
position in such legal entity or business unit as the Participant held before
such effective date, or (b) the Participant holds a position with duties
and responsibilities comparable (though not necessarily identical, in view of
the relative sizes of the Company and the entity involved in a Change in
Control) to the duties and responsibilities of the Participant prior to the
effective date of a Change in Control;  (ii)a material
reduction in the Participants Base Salary (except
for salary decreases generally applicable to the Companys other similarly
situated employees);  2


(iii)a change in the
Participants business location of more than 40 miles from the business
location prior to such change, except for required travel for the Companys
business to an extent substantially consistent with Participants prior
business travel obligations;  (iv)a material
breach by the Company of any provisions of the Plan or any enforceable written
agreement between the Company and the Participant; or  (v)any failure by
the Company to obtain assumption of the Plan by any successor or assign of the
Company;  provided,
howeverthat a resignation shall not be deemed a Constructive Termination
unless (w) the Participant provides the Company with written notice (the Constructive Termination Notice)
that the Participant believes that an event described in this Section 2(h) has
occurred, (x) the Constructive Termination Notice is given within ninety
(90) days following the date of the initial occurrence of the event, (y) the
Company does not rescind or cure the conduct giving rise to the event described
in this Section 2(h) within thirty (30) days of receipt by the
Company of the Constructive Termination Notice (the Cure
Period), and (z) the Participant resigns or otherwise
terminates employment, including a termination due to Participants death or
disability, within the ninety (90) day period following expiration of the Cure
Period (the Resignation Period).  (i)Covered
Terminationmeans an Involuntary Termination Without Cause or a
Change in Control Related Termination. 
Except as may otherwise be provided pursuant to Section 2(h),
termination of Participants employment due to death or disability shall not
constitute a Covered Termination.  (j)ERISAmeans the
Employee Retirement Income Security Act of 1974, as amended.  (k)Fair Market Value means, as of any
date, the value of the Companys common stock determined as follows:  (i)If the common stock is listed on any established stock exchange or traded
on any established market, the Fair Market Value of a share of common stock
shall be the closing sales price for such stock as quoted on such exchange or
market (or the exchange or market with the greatest volume of trading in the
common stock) on the date of determination, as reported in a source the Board
deems reliable.  (ii)Unless otherwise provided by the Board, if there is no closing sales
price for the common stock on the date of determination, then the Fair Market
Value shall be the closing selling price on the last preceding date for which
such quotation exists.  (iii)Inthe absence of such markets for the common stock, the Fair Market
Value shall be determined by the Board in good faith.  (l)Involuntary
Termination Without Causemeans an involuntary
termination of employment by the Company other than for one of the following
reasons:  3


(i)the Participants violation of any material provision of the Companys
standard agreement relating to proprietary rights;  (ii)the Participantparticipates in any act of theft or dishonesty;  (iii)the Participantparticipates in any immoral or illegal act which
has had or could reasonably be expected to have or had a detrimental effect on
the business or reputation of the Company;  (iv)any material
failure by the Participant to use
reasonable efforts to perform reasonably requested tasks after written notice
and a reasonable opportunity to comply with such notice;  (v)Participants violation of the Companys ethics or insider trading policy
which results or could reasonably be expected to result in material harm to the
Company;  (vi)the Participant participates in financial accounting improprieties which
results or could reasonably be expected to result in material harm to the
Company; or  (vii)Participants failure to cooperate with a governmental investigation
regarding Participant or the Company which results or could reasonably be
expected to result in material harm to the Company.  (m)Participantmeans each of: Todd Simpson, the Companys
President and Chief Executive Officer; William J. Tamblyn, the Companys
Executive Vice President, Chief Financial Officer and Chief Operating Officer;
Karl Brown, the Companys Vice President of Marketing.  (n)Plan Administratormeans the Board or any
committee duly authorized by the Board to administer the Plan.  The Plan Administrator may, but is not
required to be, the Compensation Committee of the Board.  The Board may at any time administer the
Plan, in whole or in part, notwithstanding that the Board has previously
appointed a committee to act as the Plan Administrator.  SECTION 3.ELIGIBILITY
FOR BENEFITS.  (a)General
Rules.Subject to the provisions set
forth in this Section and Section 7, in the event of an Involuntary
Termination Without Cause that is not a Change in Control Related Termination,
the Company will provide the severance benefits described in Section 4 of
the Plan to the affected Participant, and in the event of a Change in Control
Related Termination the Company will provide the severance benefits described
in Section 5 of the Plan to the affected Participant.  Nothing in the Plan is intended to convey any
benefit on a Participant prior to the occurrence of a Covered Termination.  (b)COBRA
Continuation Coverage.If a
Participant incurs a Covered Termination and the Participant was enrolled in a
health, dental, or visionplan sponsored
by the Company immediately prior to such Covered Termination, the Participant
may be eligible to continue coverage under such health, dental, or vision plan
(or to convert to an individual policy), at the  4


time of the Participants termination of employment,
under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).  The Company will notify the Participant of
any such right to continue such coverage at the time of termination pursuant to
COBRA.  No provision of this Plan will
affect the continuation coverage rules under COBRA, except that the
Companys payment, if any, of applicable insurance premiums will be credited as
payment by the Participant for purposes of the Participants payment required
under COBRA.  Therefore, the period
during which a Participant may elect to continue the Companys health, dental,
or vision plan coverage at his or her own expense under COBRA, the length of
time during which COBRA coverage will be made available to the Participant, and
all other rights and obligations of the Participant under COBRA (except the
obligation to pay insurance premiums that the Company pays, if any) will be
applied in the same manner that such rules would apply in the absence of
this Plan.  (c)Other
Employee Benefits.All other
employee benefits (such as health coverage, dental coverage, vision coverage,
life insurance, disability coverage, and 401(k) plan coverage) shall
terminate as of the Participants termination date (except to the extent that a
conversion privilege may be available thereunder).  (d)Exceptions
to Benefit Entitlement.A
Participant, will not receive benefits under the Plan (or will receive reduced
benefits under the Plan) in the following circumstances, as determined by the
Company in its sole discretion:  (i)The Participant
has executed an individually negotiated written contract or written agreement
with the Company relating to severance or change in control benefits that is in
effect on his termination date, in which case such Participants severance
benefit, if any, shall be governed by the terms of such individually negotiated
written contract or written agreement, whether or not such individually
negotiated written contract or written agreement expressly states that it is
meant to supersede the Plan, and shall be governed by this Plan only to the
extent that the reduction pursuant to Section 7(b) or Section 7(e) below
does not entirely eliminate benefits under this Plan.  (ii)The Participant
is offered immediate reemployment by a successor to the Company or by a
purchaser of its assets, as the case may be, following a change in ownership of
the Company or a sale of all or substantially all the assets of a division or
business unit of the Company.  For
purposes of the foregoing, immediate reemployment
means that the Participants employment with the successor to the Company or
the purchaser of its assets, as the case may be, results in uninterrupted
employment such that the Participant does not suffer a lapse in pay as a result
of the change in ownership of the Company or the sale of its assets; provided, however, that reemployment in a role that would
constitute a Constructive Termination shall not constitute immediate
reemployment for purposes hereof.  (iii)The Participant
does not confirm in writing that he or she shall be subject to the proprietary
information or confidentiality agreement previously entered into between
Participant and the Company.  (e)Termination
of Benefits.A
Participants right to receive the payment of benefits under this Plan shall
terminate immediately if, at any time prior to or during the period for which  5


the Participant is receiving benefits hereunder, the
Participant, without the prior written approval of the Company:  (i)willfully
breaches a material provision of the Participants proprietary information or
confidentiality agreement with the Company, as referenced in Section 3(d)(iii);  (ii)owns, manages,
operates, joins, controls or participates in the ownership, management,
operation or control of, is employed by or connected in any manner with, any
person, enterprise or entity which is engaged in any business competitive with
that of the Company; provided, however,that
such restriction will not apply to any passive investment representing an
interest of less than two percent (2%) of an outstanding class of publicly-traded
securities of any corporation or other entity or enterprise;  (iii)encourages or
solicits any of the Companys then current employees to leave the Companys
employ for any reason or interferes in any other manner with employment
relationships at the time existing between the Company and its then current
employees; or  (iv)induces any of
the Companys then current clients, customers, suppliers, vendors,
distributors, licensors, licensees or other third party to terminate their
existing business relationship with the Company or interferes in any other
manner with any existing business relationship between the Company and any then
current client, customer, supplier, vendor, distributor, licensor, licensee or
other third party.  SECTION 4.INVOLUNTARY
TERMINATION SEVERANCE BENEFITS  Each
Participant who incurs an Involuntary Termination Without Cause that is not a
Change in Control Related Termination shall be eligible to receive severance
benefits under this Section 4, subject to the terms and conditions of
Sections 6 and 7.  In no event shall a
Participant be eligible to receive severance benefits under both this Section 4
and Section 5 below.  In the event
that a Participant commences receiving severance benefits under this Section 4
and thereafter becomes eligible for severance benefits under Section 5,
the Participant shall be eligible to receive severance benefits under Section 5,
but such benefits shall be reduced by any severance benefits previously
provided under this Section 4.  (a)Cash
Severance Benefits.Each
Participant who incurs an Involuntary Termination Without Cause that is not a
Change in Control Related Termination shall be eligible to receive cash severance benefits equal to the number
of months of Base Salary set forth below.  For such purposes, Base Salary shall be
calculated prior to any reduction in Base Salary that would give the
Participant the right to resign due to a Constructive Termination.  Any cash severance benefits provided under
this Section 4(a) shall be paid pursuant to the provisions of Section 6.
Each Participants monthly Base Salary amount payable shall be determined by
reference to the annual amount determined pursuant to Section 2(a) with
respect to such Participant divided by twelve (12).  6


Participant
  
  Amount of Base Salary
  Cash Severance BenefitTodd Simpson, the Companys President and Chief
  Executive Officer
  
  12 monthsWilliam J. Tamblyn, the Companys Executive Vice
  President, Chief Financial Officer and Chief Operating Officer
  
  6 monthsKarl Brown, the Companys Vice President of
  Marketing
  
  4 months  (b)Equity Benefits.Effective as of the date of the Participants Involuntary Termination
Without Cause, (i) the vesting and exercisability of all outstanding
options to purchase the Companys common stock and any other unvested stock
awards that are held by the Participant on such date shall be accelerated with
respect to 50% of the then unvested shares, and (ii) any reacquisition or
repurchase rights held by the Company in respect of common stock issued
pursuant to any other stock award granted to the Participant by the Company
shall lapse with respect to 50% of the then unvested shares.  Any stock options, stock appreciation rights
or other exercisable stock awards with exercise prices or strike prices less
than the Fair Market Value of the Companys common stock on the date of the
termination shall remain exercisable until the twelve (12) month anniversary of
the termination, but in no event may be exercised after expiration of the
maximum term applicable to such stock awards.  (c)COBRA
Premiums.  If a
Participant timely elects continued coverage under COBRA, the Company shall pay
the full amount of the Participants COBRA premiums on behalf of the
Participant for the Participants continued coverage under the Companys
health, dental and vision plans, including coverage for the Participants
eligible dependents, for the number of months following such Participants
Involuntary Termination Without Cause as indicated in the table below:  Participant
  
  COBRA Severance PeriodTodd Simpson, the Companys President and Chief
  Executive Officer
  
  18 monthsWilliam J. Tamblyn, the Companys Executive Vice
  President, Chief Financial Officer and Chief Operating Officer
  
  18 monthsKarl Brown, the Companys Vice President of
  Marketing
  
  9 months  7


(such
period of months applicable to such Participant is the COBRA
Severance Period);provided, however, that if the COBRA Severance Period
exceeds the length of time that the Participant is entitled to coverage under
COBRA (including any additional period under analogous provisions of state
law), the Company (or the resulting or acquiring entity or Transferee
Corporation involved in the Change in Control, as applicable, if this provision
is applicable pursuant to Section 5(c)) shall be required to provide
health, dental and vision insurance coverage for the Participant and his or her
eligible dependents for any portion of the COBRA Severance Period that exceeds
the length of time that the Participant is entitled to coverage under COBRA
(including any additional period under analogous provisions of state law), at a
level of coverage that is substantially similar to the continued coverage that
the Participant and his or her eligible dependents received under the Companys
health, dental and vision plans; provided,
further, however,that no such premium payments (or any other
payments for medical, dental or vision coverage by the Company) shall be made
following the Participants death or the effective date of the Participants
coverage by a medical, dental or vision insurance plan of a subsequent
employer.  Each Participant shall be
required to notify the Company immediately if the Participant becomes covered
by a medical, dental or vision insurance plan of a subsequent employer.  Upon the conclusion of such period of
insurance premium payments made by the Company, the Participant will be
responsible for the entire payment of premiums required under COBRA for the
duration of the COBRA period.  The
benefits provided under this Section 4(c) subject to the terms and
conditions set forth herein are the COBRA Premium Benefits.  (d)Outplacement
Services.Following the
Participants Involuntary Termination Without Cause, the Company shall provide
the Participant with outplacement services at a cost to the Company not to
exceed as set forth in the table below with respect to such Participant through
an agency selected by the Company (the Outplacement Services),
provided that such Outplacement Services are rendered within one year from the
date of the Participants Involuntary Termination Without Cause:  Participant
  
  Outplacement ServicesTodd Simpson, the Companys President and Chief
  Executive Officer
  
  $
  5,000William J. Tamblyn, the Companys Executive Vice
  President, Chief Financial Officer and Chief Operating Officer
  
  $
  3,500Karl Brown, the Companys Vice President of
  Marketing
  
  $
  2,500  8


SECTION 5.CHANGE IN CONTROL RELATED
TERMINATION BENEFITS.  Each
Participant who incurs a Change in Control Related Termination shall be
eligible to receive severance benefits under this Section 5 in lieu of and
not additional to severance benefits under Section 4, subject to the terms
and conditions of Sections 6 and 7.  In
no event shall a Participant be entitled to receive severance benefits under
both Section 4 and this Section 5.  (a)Change
in Control Related Termination Cash Severance Benefits.Each Participant who incurs a Change in
Control Related Termination shall be eligible to receive cash severance benefits equal to the number
of months of Base Salary and Bonus set forth below.  For such purposes, Base Salary shall be
calculated prior to any reduction in Base Salary that would give the
Participant the right to resign due to a Constructive Termination.  Any cash severance benefits provided under
this Section 5(a) shall be paid pursuant to the provisions of Section 6.  Each Participants monthly Base Salary and
monthly Bonus severance amounts payable shall be determined by reference to the
annual amounts determined pursuant to Sections 2(a) and 2(c) with
respect to such Participant divided by twelve (12).  Participant
  
  Base Salary and Bonus
  Cash Severance BenefitsTodd Simpson, the Companys President and Chief
  Executive Officer
  
  18 monthsWilliam J. Tamblyn, the Companys Executive Vice
  President, Chief Financial Officer and Chief Operating Officer
  
  12 monthsKarl Brown, the Companys Vice President of
  Marketing
  
  8 months  (b)Equity
Benefits.If a
Participant incurs a Change in Control Related Termination, then effective as
of the date of the Participants termination, (i) the vesting and
exercisability of all outstanding options to purchase the Companys common
stock and any other unvested stock awards that are held by the Participant on
such date shall be accelerated with respect to 100% of the shares, and (ii) any
reacquisition or repurchase rights held by the Company in respect of common
stock issued pursuant to any other stock award granted to the Participant by
the Company shall lapse with respect to 100% of the shares.  Any stock options, stock appreciation rights
or other exercisable stock awards with exercise prices or strike prices less
than the Fair Market Value of the Companys common stock on the date of the
termination shall remain exercisable until the twelve (12) month anniversary of
the termination, but in no event may be exercised after expiration of the maximum
term applicable to such stock awards.  9


(c)COBRA Premiums.COBRA Premium
Benefits during the applicable COBRA Severance Period following the Change in
Control Related Termination on the same terms and conditions set forth in Section 4(c).  (d)Outplacement
Services.Outplacement
Services following the Change in Control Related Termination for the amounts
for services rendered within the time frame set forth in Section 4(d).  SECTION 6.TIME AND FORM OF SEVERANCE
PAYMENTS.  (a)General
Rules.Subject to Section 6(b),
any cash severance benefits provided under Section 4(a) or Section 5(a) shall
be paid ratably in equal monthly installments over the applicable monthly
period specified in such sections pursuant to the Companys regularly scheduled
payroll periods commencing as soon as practicable following the effective date
of a Participants Covered Termination and shall be subject to all applicable
withholding for federal, state and local taxes. 
In the event of a Participants death prior to receiving all installment
payments of his or her cash severance benefit, any remaining installment
payments shall be made to the Participants estate on the same payment schedule
as would have occurred absent the Participants death.  In no event shall payment of any Plan benefit
be made prior to the effective date of the Participants Covered Termination or
prior to the effective date of the release described in Section 7(a).  Benefits otherwise payable prior to the
effective date of the release shall accrue and be paid on the first regularly
scheduled payroll date that follows the release effective date.  (b)Application
of Section 409A.Notwithstanding anything to the contrary herein, the following
provisions apply to the extent severance benefits provided herein are subject
to Section 409A of the Code and the regulations and other guidance
thereunder and any state law of similar effect (collectively Section 409A).  Severance benefits shall not commence until
Participant has a separation from service for purposes of Section 409A.   Each installment of severance benefits is a
separate payment for purposes of Treas. Reg. Section 1.409A-2(b)(2)(i),
and the severance benefits are intended to satisfy the exemptions from
application of Section 409A provided under Treasury Regulations Sections
1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9).  However, if such exemptions are not available
and Participant is, upon separation from service, a specified employee for
purposes of Section 409A, then, solely to the extent necessary to avoid
adverse personal tax consequences under Section 409A, the timing of the
severance benefits payments shall be delayed until the earlier of (i) six (6) months
and one day after Participants separation from service, or (ii) Participants
death.  (c)Parachute
Payments.Except as
otherwise provided in an agreement between a Participant and the Company, if
any payment or benefit the Participant would receive in connection with a
Change in Control from the Company or otherwise (a Payment)
would (i) constitute a parachute payment within the meaning of Section 280G
of the Code, and (ii) but for this sentence, be subject to the excise tax
imposed by Section 4999 of the Code (the Excise
Tax), then such Payment shall be equal to the Reduced
Amount.  The Reduced
Amount shall be either (x) the largest portion of the
Payment that would result in no portion of the Payment being subject to the
Excise Tax, or (y) the largest portion, up to and including the total, of
the Payment, whichever amount, after taking into account all applicable
federal, state and local  10


employment taxes, income taxes, and the Excise Tax
(all computed at the highest applicable marginal rate), results in the
Participants receipt, on an after-tax basis, of the greater amount of the
Payment notwithstanding that all or some portion of the Payment may be subject
to the Excise Tax. If a reduction in payments or benefits constituting parachute
payments is necessary so that the Payment equals the Reduced Amount, reduction
shall occur in a manner necessary to provide the Participant with the greatest
economic benefit.  If more than one
manner of reduction of payments or benefits necessary to arrive at the Reduced
Amount yields the greatest economic benefit, the payments and benefits shall be
reduced pro rata.  SECTION 7.LIMITATIONS ON BENEFITS.  (a)Release.In order to be eligible to receive benefits
under the Plan, a Participant also must execute a general waiver and release in
substantially the form attached hereto as Exhibit A or Exhibit B, as
appropriate, within the applicable time frame (21 or 45 days) as is set forth
in such release, but in no event later than 45 days following such Covered
Termination, and such release must become effective in accordance with its
terms.  The Company, in its sole
discretion applying reasonable business terms, may modify the form of the
required release to comply with applicable law and shall determine the form of
the required release, which may be incorporated into a termination agreement or
other agreement with the Participant.  (b)Certain
Reductions.The Company,
in its sole discretion, shall have the authority to reduce a Participants
severance benefits, in whole or in part, by any other severance benefits, pay
in lieu of notice, or other similar benefits payable to the Participant by the
Company that become payable in connection with the Participants termination of
employment pursuant to (i) any applicable legal requirement, including,
without limitation, the Worker Adjustment and Retraining Notification Act (the WARN Act), (ii) a written
employment or severance agreement with the Company, or (iii) any Company
policy or practice providing for the Participant to remain on the payroll for a
limited period of time after being given notice of the termination of the
Participants employment.  The benefits
provided under this Plan are intended to satisfy, in whole or in part, any and
all statutory obligations and other contractual obligations of the Company that
may arise out of a Participants termination of employment, and the Plan
Administrator shall so construe and implement the terms of the Plan.  The Companys decision to apply such
reductions to the severance benefits of one Participant and the amount of such
reductions shall in no way obligate the Company to apply the same reductions in
the same amounts to the severance benefits of any other Participant, even if
similarly situated.  In the Companys
sole discretion, such reductions may be applied on a retroactive basis, with
severance benefits previously paid being recharacterized as payments pursuant
to the Companys statutory or other contractual obligations.  (c)Mitigation.Except as otherwise specifically provided
herein, a Participant shall not be required to mitigate damages or the amount
of any payment provided under this Plan by seeking other employment or
otherwise, nor shall the amount of any cash severance payments provided for
under this Plan be reduced by any compensation earned by a Participant as a
result of employment by another employer or any retirement benefits received by
such Participant after the date of the Participants termination of employment
with the Company.  11


(d)Non-Duplication
of Benefits.Except as
otherwise specifically provided for herein, no Participant is eligible to
receive benefits under this Plan or pursuant to other contractual obligations more
than one time.  This Plan is designed to
provide certain severance pay and change in control benefits to Participants
pursuant to the terms and conditions set forth in this Plan.  The payments pursuant to this Plan are in
addition to, and not in lieu of, any unpaid salary, bonuses or benefits to
which a Participant may be entitled for the period ending with the Participants
Covered Termination.  (e)Indebtedness
of Participants.If a
Participant is indebted to the Company on the effective date of his or her
Covered Termination, the Company reserves the right to offset any severance
payments under the Plan by the amount of such indebtedness.  SECTION 8.RIGHT TO INTERPRET PLAN;
AMENDMENT AND TERMINATION.  (a)Exclusive
Discretion.The Plan
Administrator shall have the exclusive discretion and authority to establish
rules, forms, and procedures for the administration of the Plan and to construe
and interpret the Plan and to decide any and all questions of fact,
interpretation, definition, computation or administration arising in connection
with the operation of the Plan, including, but not limited to, the eligibility
to participate in the Plan and amount of benefits paid under the Plan.  The rules, interpretations, computations and
other actions of the Plan Administrator shall be binding and conclusive on all
persons.  (b)Amendment
or Termination.This Plan
shall terminate automatically on May 27, 2014, unless extended by action
of the Board or the Compensation Committee of the Board.  The Company reserves the right to amend or
terminate this Plan or the benefits provided hereunder at any earlier time; provided, however,that no such amendment
or termination shall occur following (i) the date three (3) months
prior to a Change in Control or (ii) a Covered Termination as to any
Participant who would be adversely affected by such amendment or termination
unless such Participant consents in writing to such amendment or
termination.  Any action amending or
terminating the Plan pursuant to the immediately preceding sentence shall be in
writing and executed by a duly authorized officer of the Company.  Unless otherwise required by law, no approval
of the shareholders of the Company shall be required for any amendment or termination
including any amendment that increases the benefits provided under any option
or other stock award.  SECTION 9.NO IMPLIED EMPLOYMENT CONTRACT.  The Plan shall not be deemed (i) to give any employee or other
person any right to be retained in the employ of the Company or (ii) to
interfere with the right of the Company to discharge any employee or other
person at any time, with or without cause, which right is hereby reserved.  SECTION 10.LEGAL CONSTRUCTION.  This Plan shall be governed by and construed under the laws of the
State of California (without regard to principles of conflict of laws), except
to the extent preempted by ERISA.  12


SECTION 11.CLAIMS, INQUIRIES
AND APPEALS.  (a)Applications
for Benefits and Inquiries.Any application for benefits, inquiries about
the Plan or inquiries about present or future rights under the Plan must be
submitted to the Plan Administrator in writing by an applicant (or his or her
authorized representative).  The address
of the Plan Administrator is:  Ditech Networks, Inc. Attn: Vice President, Human Resources 825 E. Middlefield Road Mountain View, CA 94043  (b)Denial
of Claims.In the event
that any application for benefits is denied in whole or in part, the Plan
Administrator must provide the applicant with written or electronic notice of
the denial of the application, and of the applicants right to review the
denial.  Any electronic notice will
comply with the regulations of the U.S. Department of Labor.  The notice of denial will be set forth in a
manner designed to be understood by the applicant and will include the
following:  (1)the specific reason or
reasons for the denial;  (2)references to the specific
Plan provisions upon which the denial is based;  (3)a description of any
additional information or material that the Plan Administrator needs to
complete the review and an explanation of why such information or material is
necessary; and  (4)an explanation of the Plans
review procedures and the time limits applicable to such procedures, including
a statement of the applicants right to bring a civil action under Section 502(a) of
ERISA following a denial on review of the claim, as described in Section 11(d) below.  This notice of denial will be given to the applicant within ninety (90)
days after the Plan Administrator receives the application, unless special
circumstances require an extension of time, in which case, the Plan
Administrator has up to an additional ninety (90) days for processing the
application.  If an extension of time for
processing is required, written notice of the extension will be furnished to
the applicant before the end of the initial ninety (90) day period.  This notice of extension will describe the special circumstances
necessitating the additional time and the date by which the Plan Administrator
is to render its decision on the application.  (c)Request
for a Review.Any person
(or that persons authorized representative) for whom an application for
benefits is denied, in whole or in part, may appeal the denial by submitting a
request for a review to the Plan Administrator within sixty (60) days after the
application is denied.  A request for a
review shall be in writing and shall be addressed to:  13


Ditech Networks, Inc. Attn: Vice President, Human Resources 825 E. Middlefield Road Mountain View, CA 94043  A request for review must set forth all of the grounds on which it is
based, all facts in support of the request and any other matters that the
applicant feels are pertinent.  The
applicant (or his or her representative) shall have the opportunity to submit
(or the Plan Administrator may require the applicant to submit) written
comments, documents, records, and other information relating to his or her
claim.  The applicant (or his or her
representative) shall be provided, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other information relevant
to his or her claim.  The review shall
take into account all comments, documents, records and other information
submitted by the applicant (or his or her representative) relating to the
claim, without regard to whether such information was submitted or considered
in the initial benefit determination.  (d)Decision
on Review.The Plan
Administrator will act on each request for review within sixty (60) days after
receipt of the request, unless special circumstances require an extension of
time (not to exceed an additional sixty (60) days), for processing the request
for a review.  If an extension for review
is required, written notice of the extension will be furnished to the applicant
within the initial sixty (60) day period. 
This notice of extension will describe the special circumstances
necessitating the additional time and the date by which the Plan Administrator
is to render its decision on the review. 
The Plan Administrator will give prompt, written or electronic notice of
its decision to the applicant. Any electronic notice will comply with the
regulations of the U.S. Department of Labor. 
In the event that the Plan Administrator confirms the denial of the
application for benefits in whole or in part, the notice will set forth, in a
manner calculated to be understood by the applicant, the following:  (1)the specific reason or
reasons for the denial;  (2)references to the specific
Plan provisions upon which the denial is based;  (3)a statement that the
applicant is entitled to receive, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other information relevant
to his or her claim; and  (4)a statement of the applicants
right to bring a civil action under Section 502(a) of ERISA.  (e)Rules and
Procedures.The Plan
Administrator will establish rules and procedures, consistent with the
Plan and with ERISA, as necessary and appropriate in carrying out its
responsibilities in reviewing benefit claims. 
The Plan Administrator may require an applicant who wishes to submit
additional information in connection with an appeal from the denial of benefits
to do so at the applicants own expense.  14


(f)Exhaustion
of Remedies.No legal
action for benefits under the Plan may be brought until the applicant
(i) has submitted a written application for benefits in accordance with
the procedures described by Section 11(a) above, (ii) has been
notified by the Plan Administrator that the application is denied,
(iii) has filed a written request for a review of the application in
accordance with the appeal procedure described in Section 11(c) above,
and (iv) has been notified that the Plan Administrator has denied the
appeal.  Notwithstanding the foregoing,
if the Plan Administrator does not respond to an applicants claim or appeal
within the relevant time limits specified in this Section 11, the
applicant may bring legal action for benefits under the Plan pursuant to Section 502(a) of
ERISA.  SECTION 12.BASIS OF PAYMENTS TO AND FROM
PLAN.  All benefits under the Plan shall be paid by the Company.  The Plan shall be unfunded, and benefits
hereunder shall be paid only from the general assets of the Company.  SECTION 13.OTHER PLAN INFORMATION.  (a)Employer
and Plan Identification Numbers.The Employer Identification Number assigned
to the Company (which is the Plan Sponsor as that term is used in ERISA) by
the Internal Revenue Service is 94-2935531. 
The Plan Number assigned to the Plan by the Plan Sponsor pursuant to the
instructions of the Internal Revenue Service is 520.  (b)Ending
Date for Plans Fiscal Year.The date of the end of the fiscal year for
the purpose of maintaining the Plans records is April 30.  (c)Agent
for the Service of Legal Process.  The agent for the service of legal process
with respect to the Plan is:  Ditech Networks, Inc. Attn: Vice President, Human Resources 825 E. Middlefield Road Mountain View, CA 94043  (d)Plan
Sponsor and Administrator.The Plan Sponsor and the Plan
Administrator of the Plan is:  Ditech Networks, Inc. 825 E. Middlefield Road Mountain View, CA 94043  The Plan Sponsors and Plan Administrators telephone number is (650)
623-1300.  The Plan Administrator is the
named fiduciary charged with the responsibility for administering the Plan.  SECTION 14.STATEMENT OF ERISA RIGHTS.  Participants
in this Plan (which is a welfare benefit plan sponsored by Ditech Networks, Inc.)
are entitled to certain rights and protections under ERISA.  If you are a Participant, you are  15


considered
a participant in the Plan for the purposes of this Section 14 and, under
ERISA, you are entitled to:  Receive Information About Your Plan and Benefits  (a)Examine, without charge, at
the Plan Administrators office and at other specified locations, such as
worksites, all documents governing the Plan and a copy of the latest annual
report (Form 5500 Series), if applicable, filed by the Plan with the U.S.
Department of Labor and available at the Public Disclosure Room of the
Employee Benefits Security Administration;  (b)Obtain, upon written request
to the Plan Administrator, copies of documents governing the operation of the
Plan and copies of the latest annual report (Form 5500 Series), if
applicable, and an updated (as necessary) Summary Plan Description.  The Administrator may make a reasonable
charge for the copies; and  (c)Receive a summary of the
Plans annual financial report, if applicable. 
The Plan Administrator is required by law to furnish each participant
with a copy of this summary annual report.  Prudent
Actions By Plan Fiduciaries  In
addition to creating rights for Plan participants, ERISA imposes duties upon
the people who are responsible for the operation of the employee benefit
plan.  The people who operate the Plan,
called fiduciaries of the Plan, have a duty to do so prudently and in the
interest of you and other Plan participants and beneficiaries.  No one, including your employer, your union
or any other person, may fire you or otherwise discriminate against you in any
way to prevent you from obtaining a Plan benefit or exercising your rights
under ERISA.  Enforce
Your Rights  If
your claim for a Plan benefit is denied or ignored, in whole or in part, you
have a right to know why this was done, to obtain copies of documents relating
to the decision without charge, and to appeal any denial, all within certain
time schedules.  Under
ERISA, there are steps you can take to enforce the above rights.  For instance, if you request a copy of Plan
documents or the latest annual report from the Plan, if applicable, and do not
receive them within 30 days, you may file suit in a Federal court.  In such a case, the court may require the
Plan Administrator to provide the materials and pay you up to $110 a day until
you receive the materials, unless the materials were not sent because of
reasons beyond the control of the Plan Administrator.  If
you have a claim for benefits which is denied or ignored, in whole or in part,
you may file suit in a state or Federal court.  If
you are discriminated against for asserting your rights, you may seek
assistance from the U.S. Department of Labor, or you may file suit in a Federal
court.  The court will decide who should
pay court costs and legal fees.  If you
are successful, the court may order the person you  16


have
sued to pay these costs and fees.  If you
lose, the court may order you to pay these costs and fees, for example, if it
finds your claim is frivolous.  Assistance
With Your Questions  If
you have any questions about the Plan, you should contact the Plan
Administrator.  If you have any questions
about this statement or about your rights under ERISA, or if you need
assistance in obtaining documents from the Plan Administrator, you should
contact the nearest office of the Employee Benefits Security Administration,
U.S. Department of Labor, listed in your telephone directory or the Division of
Technical Assistance and Inquiries, Employee Benefits Security Administration,
U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C.
20210.  You may also obtain certain
publications about your rights and responsibilities under ERISA by calling the
publications hotline of the Employee Benefits Security Administration.  SECTION 15.GENERAL
PROVISIONS.  (a)Notices.Any notice, demand or
request required or permitted to be given by either the Company or a
Participant pursuant to the terms of this Plan shall be in writing and shall be
deemed given when delivered personally or deposited in the U.S. mail, First Class with
postage prepaid, and addressed to the parties, in the case of the Company, at
the address set forth in Section 11(a) and, in the case of a
Participant, at the address as set forth in the Companys employment file
maintained for the Participant as previously furnished by the Participant or
such other address as a party may request by notifying the other in writing.  (b)Transfer
and Assignment.The rights and
obligations of a Participant under this Plan may not be transferred or assigned
without the prior written consent of the Company.  This Plan shall be binding upon any surviving
entity resulting from a Change in Control and upon any other person who is a
successor by merger, acquisition, consolidation or otherwise to the business
formerly carried on by the Company without regard to whether or not such person
or entity actively assumes the obligations hereunder.  (c)Waiver.Any Partys failure to
enforce any provision or provisions of this Plan shall not in any way be
construed as a waiver of any such provision or provisions, nor prevent any
Party from thereafter enforcing each and every other provision of this
Plan.  The rights granted the Parties
herein are cumulative and shall not constitute a waiver of any Partys right to
assert all other legal remedies available to it under the circumstances.  (d)Severability.Should any provision of this
Plan be declared or determined to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired.  (e)Section Headings.Section headings in
this Plan are included for convenience of reference only and shall not be
considered part of this Plan for any other purpose.  17


SECTION 16.EXECUTION.  To record the amendment and restatement of the Plan as set forth
herein, Ditech Networks, Inc. has caused its duly authorized officer to
execute the same as of the Effective Date.  DITECH
  NETWORKS, INC.By:Title:  18


For Employees Age 40 or
Older Individual Termination  EXHIBIT A  RELEASE AGREEMENT  I understand and agree completely to the terms set forth in the Ditech
Networks, Inc. Amended and Restated Severance Benefit Plan (the Plan).  I understand that this Release, together with the Plan, constitutes the
complete, final and exclusive embodiment of the entire agreement between the
Company and me with regard to the subject matter hereof.  I am not relying on any promise or representation
by the Company that is not expressly stated therein.  Certain capitalized terms used in this
Release are defined in the Plan.  I hereby confirm my obligations under the Companys proprietary
information and inventions agreement.  Except as otherwise set forth in this Release, I hereby generally
and completely release the Company and its parents, subsidiaries, successors,
predecessors, affiliates and assigns, and its and their current and former
partners, members, directors, officers, employees, shareholders, agents,
attorneys, accountants, insurers, affiliates and assigns, from any and all
claims, liabilities and obligations, both known and unknown, that arise out of
or are in any way related to events, acts, conduct, or omissions occurring at
any time prior to and including the date I sign this Release.  This general release includes, but is not
limited to: (a) all claims arising out of or in any way related to my
employment with the Company or the termination of that employment; (b) all
claims related to my compensation or benefits, including salary, bonuses,
commissions, vacation pay, expense reimbursements, severance pay, fringe
benefits, stock, stock options, or any other ownership interests in the
Company; (c) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing; (d) all
tort claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (e) all federal, state, and
local statutory claims, including claims for discrimination, harassment,
retaliation, attorneys fees, or other claims arising under the federal Civil
Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of
1990 (as amended), the federal Age Discrimination in Employment Act (as
amended) (ADEA), the federal Employee Retirement Income Security Act of 1974
(as amended), and the California Fair Employment and Housing Act (as amended); provided, however,
that nothing in this paragraph shall be construed in any way to release the
Company from its obligation to indemnify me pursuant to agreement or applicable
law.  I acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under the ADEA, and that the consideration given under
the Plan for the waiver and release in the preceding paragraph hereof is in
addition to anything of value to which I was already entitled.  I further acknowledge that I have been
advised by this writing, as required by the ADEA, that:  (a) my waiver and release do not apply to
any rights or claims that may arise after the date I sign this Release;
(b) I should consult with an attorney prior to signing this Release
(although I may choose voluntarily not do so); (c) I have twenty-one (21)
days to consider this Release (although I may choose voluntarily to sign this
Release earlier); (d) I have  1


seven
(7) days following the date I sign this Release to revoke the Release by
providing written notice to an officer of the Company; and (e) this
Release shall not be effective until the date upon which the revocation period
has expired, which shall be the eighth day after I sign this Release.  I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: A general
release does not extend to claims which the creditor does not know or suspect
to exist in his favor at the time of executing the release, which if known by
him must have materially affected his settlement with the debtor.  I hereby expressly waive and relinquish all
rights and benefits under that section and any law of any jurisdiction of
similar effect with respect to my release of any claims hereunder.  I acknowledge that to become effective, I must sign and return
this Release to the Company so that it is received not later than twenty-one
(21) days following the date it is provided to me.  EMPLOYEEName:Date:  2


For Employees Age 40 or
Older Group Termination  EXHIBIT B  RELEASE AGREEMENT  I understand and agree completely to the terms set forth in the Ditech
Networks, Inc. Amended and Restated Severance Benefit Plan (the Plan).  I understand that this Release, together with the Plan, constitutes the
complete, final and exclusive embodiment of the entire agreement between the
Company and me with regard to the subject matter hereof.  I am not relying on any promise or
representation by the Company that is not expressly stated therein.  Certain capitalized terms used in this
Release are defined in the Plan.  I hereby confirm my obligations under the Companys proprietary
information and inventions agreement.  Except as otherwise set forth in this Release, I hereby generally
and completely release the Company and its parents, subsidiaries, successors,
predecessors, affiliates and assigns, and its and their current and former
partners, members, directors, officers, employees, shareholders, agents,
attorneys, accountants, insurers, affiliates and assigns, from any and all
claims, liabilities and obligations, both known and unknown, that arise out of
or are in any way related to events, acts, conduct, or omissions occurring at
any time prior to and including the date I sign this Release.  This general release includes, but is not
limited to: (a) all claims arising out of or in any way related to my
employment with the Company or the termination of that employment; (b) all
claims related to my compensation or benefits, including salary, bonuses,
commissions, vacation pay, expense reimbursements, severance pay, fringe
benefits, stock, stock options, or any other ownership interests in the
Company; (c) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing; (d) all
tort claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (e) all federal, state, and
local statutory claims, including claims for discrimination, harassment,
retaliation, attorneys fees, or other claims arising under the federal Civil
Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of
1990 (as amended), the federal Age Discrimination in Employment Act (as
amended) (ADEA), the federal Employee Retirement Income Security Act of 1974
(as amended), and the California Fair Employment and Housing Act (as amended); provided, however,
that nothing in this paragraph shall be construed in any way to release the
Company from its obligation to indemnify me pursuant to agreement or applicable
law.  I acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under the ADEA, and that the consideration given under
the Plan for the waiver and release in the preceding paragraph hereof is in
addition to anything of value to which I was already entitled.  I further acknowledge that I have been
advised by this writing, as required by the ADEA, that:  (a) my waiver and release do not apply
to any rights or claims that may arise after the date I sign this Release;
(b) I should consult with an attorney prior to signing this Release
(although I may choose voluntarily not to do so); (c) I have forty-five
(45) days to consider this Release (although I may choose voluntarily to sign
this Release earlier); (d) I have  1


seven
(7) days following the date I sign this Release to revoke the Release by
providing written notice to an office of the Company; (e) this Release
shall not be effective until the date upon which the revocation period has
expired, which shall be the eighth day after I sign this Release; and
(f) I have received with this Release a detailed list of the job titles
and ages of all employees who were terminated in this group termination and the
ages of all employees of the Company in the same job classification or
organizational unit who were not terminated.  I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: A general
release does not extend to claims which the creditor does not know or suspect
to exist in his favor at the time of executing the release, which if known by
him must have materially affected his settlement with the debtor.  I hereby expressly waive and relinquish all
rights and benefits under that section and any law of any jurisdiction of
similar effect with respect to my release of any claims hereunder.  I acknowledge that to become effective, I must sign and return
this Release to the Company so that it is received not later than forty-five
(45) days following the date it is provided to me.  EMPLOYEEName:Date:  2