Document:

Exhibit 10.1

 

September 24, 2007

 

Mr. Todd Simpson

c/o Ditech
Networks, Inc.

 

Re:          Employment
Terms

 

Dear Todd:

 

This letter sets
forth the terms and conditions of your position with Ditech Networks, Inc. (the
“Company”) as its President and Chief Executive Officer.

 

Title/Duties

 

As President and
CEO, you shall perform such duties as are required by the Company’s Board of
Directors (the “Board”), to whom you shall report. In this position, you agree
to devote your best efforts and substantially all of your business time and
attention to the business of the Company, except for vacation periods and
reasonable periods of illness or other incapacities permitted by the Company’s
general employment policies.

 

Compensation

 

Your base salary
will be $325,000 per year, less applicable payroll taxes and withholdings,
payable on the Company’s regular payroll schedule. You will also be eligible
for an annual bonus of up to seventy-five percent (75%) of your annual base
salary under the terms of the FY 2008 Executive Bonus Program, as may be
amended by the Compensation Committee, pro rated in accordance with the time
you have served in this position, with the remainder of your bonus governed by
the bonus arrangements in place prior to execution of this agreement, also pro rated
for the portion of the year served under that prior arrangement. You will also
be eligible for all of the Company’s standard benefit programs, subject to the
terms and conditions of those plans.

 

Relocation

 

The obligations of
the Company under the seventh bullet point entitled “Relocation Assistance” in
the letter agreement between you and the Company dated May 9, 2007, together
with the sub-bullets thereunder specifying the dollar amounts set forth therein
(the “Moving Expenses”), shall continue uninterrupted by this letter agreement;
provided, however, that (1) if your
employment with the Company is terminated without Cause (as defined herein)
between now and July 31, 2008, then the Company will continue to pay the Moving
Expenses through July 31, 2008, and (2) if your employment is terminated for
any other reason, either by you or by the Company, between now and July 31,
2008, then the Moving Expenses shall cease as of your last day of employment.

 

 

Equity

 

Subject to approval by the Compensation Committee of the Board, you
will receive an option (the “Option”) to purchase 450,000 shares of the Company’s
Common Stock under the Company’s 2006 Equity Incentive Plan (the “Plan”). The
Option will be subject to the terms and conditions of the Plan and your grant
agreement. The Option will have an exercise price equal to the closing price of
the Company’s common stock on the Nasdaq Global Market on the date of grant. Your
grant agreement will include 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 your employment ends, whichever
occurs first. Further, subject to Board approval, you will be granted an
additional option to purchase 100,000 shares of the Company’s Common Stock
under the Plan, which shall vest upon achievement of Company performance
milestones to be determined by the Compensation Committee.

 

Severance

 

Subject to
approval by the Compensation Committee, you will be added as a Participant
under the Ditech Networks, Inc. Amended and Restated Change in Control
Severance Benefit Plan (the “Severance Plan”), which will make you eligible for
severance benefits under the terms and conditions of the Severance Plan, at the
same level as the other two current executive officers of the Company.

 

Additionally, if
the Company terminates your employment without Cause (as defined herein)
anytime between now and September 30, 2009, and such termination is not in connection with a Change in
Control (as defined in the Severance Plan), then the Company will provide you
with the following severance benefits:

 

•                  The Company shall pay you severance
pay in the form of continuation of your base salary in effect on the effective
date of termination for a period of twelve (12) months after the date of such
termination.

 

•                  If you timely elect continued
coverage under COBRA, then the Company shall pay the COBRA premiums necessary
to continue your medical insurance coverage in effect for yourself and your
eligible dependents on the termination date for a period of twelve (12) months
after your termination (provided that such COBRA reimbursement shall terminate
upon your commencement of new employment by an employer that offers health care
coverage to its employees or such earlier date as you are no longer eligible
for COBRA coverage).

 

Such severance
benefits are conditional upon you delivering to the Company an effective,
general release of claims in favor of the Company in a form acceptable to the
Company within the period required by the Company. Your salary continuation
payments described above will be paid in substantially equal installments on
the Company’s regular payroll schedule and subject to standard deductions and
withholdings over the twelve (12) month period following termination; provided,
however, that no payments will be made prior to the effective date of the
release. On the first payroll pay day following the effective date of the
release, the Company will pay you the cash severance you would have received on
or prior to such date in a lump sum, with the balance of the cash severance
being paid as originally scheduled. Each such installment will be deemed a
separate “payment” for purposes of Section 409A of the Internal Revenue Code.

 

 

In the event your
employment terminates for any reason in connection with a Change in Control,
then your entitlement to severance benefits shall be as set forth in the
Severance Plan, and the provisions set forth herein with respect to severance
shall have no force or effect.

 

Definitions

 

For purposes of
this letter agreement, Cause shall mean: (i) your violation of any material
provision of your Employee Proprietary
Information and Inventions Agreement; (ii) any act of theft or
dishonesty by you; (iii) your 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) your material failure to use
reasonable efforts to perform reasonably requested tasks after written notice
and a reasonable opportunity to comply with such notice.

 

Miscellaneous

 

As a condition of your employment, you will be required to abide by the
Company’s policies and procedures, including but not limited to the policies
set forth in the Company’s Employee Handbook, as may be in effect from time to
time. You also agree to comply with the Company’s Employee Proprietary Information and Inventions Agreement (“Proprietary
Information Agreement”), which you have already executed in connection with
your employment with the Company.

 

Your employment relationship is at-will. Accordingly, you may terminate
your employment with the Company at any time and for any reason whatsoever
simply by notifying the Company. Likewise, the Company may terminate your
employment at any time, with or without cause or advance notice.

 

To ensure the rapid and economical resolution of disputes that may
arise in connection with your employment, you and the Company agree that any
and all disputes, claims, or causes of action, in law or equity, arising from
or relating to the enforcement, breach, performance, execution, or
interpretation of this agreement, your employment, or the termination of your
employment, shall be resolved, to the fullest extent permitted by law, by
final, binding and confidential arbitration in San Jose, California conducted
before a single arbitrator by Judicial Arbitration and Mediation Services, Inc.
(“JAMS”) or its successor, under the then applicable JAMS rules. By agreeing to this arbitration procedure, both you and the Company
waive the right to resolve any such dispute through a trial by jury or judge or
by administrative proceeding. The arbitrator shall:  (a) have the authority to compel adequate
discovery for the resolution of the dispute and to award such relief as would
otherwise be permitted by law; and (b) issue a written arbitration decision
including the arbitrator’s essential findings and conclusions and a statement
of the award. The Company shall pay all of JAMS’ arbitration fees. Nothing in
this letter agreement shall prevent either you or the Company from obtaining
injunctive relief in court if necessary to prevent irreparable harm pending the
conclusion of any arbitration.

 

This letter, together with your Proprietary
Information Agreement, forms the complete and exclusive statement of
your agreement with the Company concerning the subject matter hereof. The terms
in this letter supersede any other representations or agreements made to you by
any party, whether oral or written, concerning the terms and conditions of your
employment, including (without limitation) your letter agreement with the
Company dated May 9, 2007, other than as set forth under “Relocation” above. The
terms of this agreement cannot be changed (except with respect to those changes
expressly reserved

 

 

to the Company’s discretion in this letter) without a written agreement
signed by you and a duly authorized officer of the Company. This agreement is
to be governed by the laws of the state of California without reference to
conflicts of law principles. In case any provision contained in this agreement
shall, for any reason, be held invalid or unenforceable in any respect, such
invalidity or unenforceability shall not affect the other provisions of this
agreement, and such provision will be construed and enforced so as to render it
valid and enforceable consistent with the general intent of the parties insofar
as possible under applicable law. With respect to the enforcement of this
agreement, no waiver of any right hereunder shall be effective unless it is in
writing. This agreement may be executed in more than one counterpart, and
signatures transmitted via facsimile shall be deemed equivalent to originals. As
required by law, this offer is subject to satisfactory proof of your identity
and right to work in the United States.

 

If you wish to accept employment at the Company under the terms
described above, please sign and date this letter and return them to me.

 

Sincerely,

 

 

	
  /s/ Edwin L. Harper

  	
   

  
	
  Edwin L. Harper

  	
   

  
	
  Chairman of the Board

  	
   

  
	
   

  	
   

  
	
  Understood and Accepted:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Todd Simpson

  	
   

  	
    September
  24, 2007

  	
   

  
	
  Todd Simpson

  	
  DateExhibit 10.2

 

DITECH NETWORKS,
INC.

 

AMENDED
AND RESTATED CHANGE IN CONTROL SEVERANCE BENEFIT PLAN

 

SECTION
1.         INTRODUCTION.

 

The Ditech Networks, Inc. Amended and
Restated Change in Control Severance Benefit Plan (the “Plan”)
is hereby established effective September 24, 2007 (the “Effective Date”),
which Plan amends and restates the Ditech Networks, Inc. Change in Control
Severance Benefit Plan adopted August 18, 2006 (the “Prior
Plan”), which Prior Plan is hereby superseded by this Plan. 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 in connection
with a Change in Control. 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 6(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)           “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 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:

 

(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;

 

1

 

(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(c), 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.

 

(d)           “Code”  means the Internal Revenue Code of 1986, as
amended.

 

(e)           “Company” means Ditech Networks, Inc. and its wholly
owned subsidiaries or, following a Change in Control, the surviving entity
resulting from such transaction.

 

(f)            “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 the effective date of the Change in Control; provided, however, that it shall not be a “Constructive
Termination” if, following the effective date of the 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 the Change in Control) to the duties and responsibilities of the Participant
prior to the effective date of the 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);

 

(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, and the Company
fails to rescind or cure the conduct giving rise to the event constituting such
material breach within thirty (30) days of receipt by the Company of written
notice from the Participant informing the Company of such material breach; or

 

(v)            any
failure by the Company to obtain assumption of the Plan by any successor or
assign of the Company.

 

2

 

Notwithstanding the foregoing, a resignation
shall not be deemed a Constructive Termination unless (x) the Participant
provides the Company with written notice (the “Constructive
Termination Notice”) that the Participant believes that an event
described in this Section 2(f) has occurred, (y) the Constructive Termination
Notice is given within ninty (90) days of the date the event occurred, and (z)
the Company does not rescind or cure the conduct giving rise to the event
described in this Section 2(f) within fifteen (15) days of receipt by the
Company of the Constructive Termination Notice.

 

(g)           “Covered Termination” means an Involuntary Termination
Without Cause or a Constructive Termination, either of which 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. Termination of
employment of a Participant due to death or disability shall not constitute a
Covered Termination unless (i) a resignation of employment by the Participant
immediately prior to the Participant’s death or disability would have qualified
as a Constructive Termination, and (ii) Participant shall have given the
Company written notice, prior to such resignation, of the event(s) that
occurred or circumstance(s) that existed that would have qualified as a Constructive
Termination.

 

(h)           “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.

 

(i)            “Involuntary Termination Without Cause” means an
involuntary termination of employment by the Company other than for one of the
following reasons:

 

(i)            the Participant’s violation of any material
provision of the Company’s standard agreement relating to proprietary rights;

 

(ii)           the Participant participates in any act of
theft or dishonesty; or

 

(iii)         the Participant participates 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; or

 

(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.

 

(j)            “Participant”
means each of: Todd Simpson, the Company’s President and Chief Executive
Officer; William J. Tamblyn, the Company’s Executive Vice President and Chief
Financial Officer; and Lowell B. Trangsrud, the Company’s Executive Vice
President and Chief Operating Officer.

 

(k)           “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.

 

3

 

SECTION 3.         ELIGIBILITY FOR BENEFITS.

 

(a)           General
Rules. Subject to the provisions set forth in this Section and Section  6, in the event of a Covered Termination, the Company will
provide the severance benefits described in Section 4 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 Change in Control.

 

(b)           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 6(b) or Section 6(d) 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.

 

(c)           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 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(b)(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;

 

4

 

(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.         AMOUNT OF BENEFITS.

 

(a)           Cash
Severance Benefits. Each Participant who incurs a Covered Termination and
was employed by the Company at the position or level set forth below within one
(1) month immediately prior to such Covered Termination shall be entitled to
receive, subject to Section 6(c), a
cash severance benefit equal to the number of months of Base Salary plus
the Pro Rata Portion of Expected Executive Bonus set forth below. Any cash
severance benefits provided under this Section 4(a) shall be paid pursuant to
the provisions of Section 5.

	
  Participant

  	
   

  	
  Amount of Base Salary Cash

  Severance Benefit

  
	
  Todd Simpson, the Company’s 

  President and Chief Executive Officer

  	
   

  	
  12 months

  
	
  William J. Tamblyn, the 

  Company’s Executive Vice President 

  and Chief Financial Officer

  	
   

  	
  12 months

  
	
  Lowell B. Trangsrud, the 

  Company’s Executive Vice President 

  and Chief Operating Officer

  	
   

  	
  12 months

  

 

“Pro Rata Portion of Expected Executive Bonus”
shall mean, with respect to a Participant, the pro rata portion, calculated
based upon the fraction obtained by subtracting from 365 the number of days
remaining in the fiscal year and dividing that amount by 365, of the expected
variable cash bonus for such Participant, as determined by the Compensation
Committee of the Board, pursuant to the Company’s variable cash compensation
plan established by the Compensation Committee of the Board for the fiscal year
in which the Covered Termination occurs, based upon the Participant’s and the
Company’s performance during such fiscal year up to the date of the Covered
Termination.

 

(b)           Accelerated Stock Award Vesting of Stock
Options. If a Participant incurs a Covered Termination, then
effective as of the date of the Participant’s Covered Termination, (i)

 

5

 

the vesting and exercisability of all
outstanding options to purchase the Company’s common stock and other stock
awards that were granted to the Participant on or after September 1, 2003 but
before a Change in Control, and are held by the Participant on such date shall
be accelerated in full, 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 on or after September 1, 2003 but
before a Change in Control shall lapse.

 

(c)           Continued
Medical Benefits. If a Participant incurs a Covered Termination and the
Participant was enrolled in a health, dental, or vision  plan
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 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.

 

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, during the twelve (12) months following a Covered
Termination (the “Severance Period”);  provided, however,
that if the 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 resulting or acquiring entity or
Transferee Corporation involved in the Change in Control, as applicable, 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 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.

 

(d)           Other
Employee Benefits. All other benefits (such as health coverage, dental
coverage, vision coverage, life insurance, disability coverage, and 401(k) plan
coverage) shall

 

6

 

terminate as of the Participant’s termination
date (except to the extent that a conversion privilege may be available
thereunder).

 

SECTION
5.         TIME AND FORM OF SEVERANCE PAYMENTS.

 

(a)           General
Rules. Subject to Section 5(b), any cash severance benefit provided under
Section 4(a) shall be paid ratably over 12 months in installments 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 under Section 4(a), 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 6(a).

 

(b)           Application
of Section 409A. In the event that any cash severance benefit provided
under Section 4(a) shall fail to satisfy the distribution requirement of
Section 409A(a)(2)(A) of the Code as a result of the application of Section
409A(a)(2)(B)(i) of the Code, the payment of such benefit shall be accelerated
to the minimum extent necessary so that the benefit is not subject to the
provisions of Section 409A(a)(1) of the Code. (The payment schedule as revised
after the application of the preceding sentence shall be referred to as the “Revised Payment Schedule.”)  In the event the payment of benefits pursuant
to the Revised Payment Schedule would be subject to Section 409A(a)(1) of the
Code, the payment of such benefits shall not be paid pursuant to the Revised
Payment Schedule and instead the payment of such benefits shall be delayed to
the minimum extent necessary so that such benefits are not subject to the
provisions of Section 409A(a)(1) of the Code. The Board may attach conditions
to or adjust the amounts paid pursuant to this Section 5(b) to preserve, as
closely as possible, the economic consequences that would have applied in the
absence of this Section 5(b); provided, however,
that no such condition or adjustment shall result in the payments being subject
to Section 409A(a)(1) of the Code.

 

(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 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 the following order unless the
Participant elects in writing a different order (provided, however, that

 

7

 

such election shall be subject to Company
approval if made on or after the date on which the event that triggers the
Payment occurs): (1) reduction of cash payments; (2) cancellation of
accelerated vesting of equity awards other than stock options; (3) cancellation
of accelerated vesting of stock options; and (4) reduction of other benefits
paid to a Participant. If acceleration of vesting of compensation from a
Participant’s equity awards is to be reduced, such acceleration of vesting
shall be cancelled by first canceling such acceleration for the vesting
installment that will vest last and continuing by canceling as a first priority
such acceleration for vesting installment with the latest vesting unless the Participant elects in writing
a different order for cancellation prior to any Change in Control.

 

SECTION
6.         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 time
frame (21 or 45 days) as is set forth in such release, 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 Section 4(a) of 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.

 

8

 

(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
7.         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 September 24, 2010,
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
8.         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
9.         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.

 

9

 

SECTION 10.           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 10(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:

 

10

 

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.

 

11

 

(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
10(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 10(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 10, the applicant may bring legal action for benefits
under the Plan pursuant to Section 502(a) of ERISA.

 

SECTION
11.       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
12.       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
13.       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

 

12

 

considered a participant in the
Plan for the purposes of this Section 13 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

 

13

 

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 14.           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 10(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.

 

14

 

SECTION
15.           EXECUTION.

 

To record the adoption 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:

  	
   

  
				

 

15

 

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 Change in
Control 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.

 

	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  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 Change in
Control 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.

 

	
  

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  

 

2

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