DITC Ditech Networks, Inc. (MM)

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

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

 

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Preliminary Copy

DITECH NETWORKS, INC.
3099 North First Street
San Jose, California 95134

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to Be Held On October 16, 2012

Dear Stockholder:

        You are cordially invited to attend the Annual Meeting of Stockholders of DITECH NETWORKS, INC. , a Delaware corporation. The meeting will be held on Tuesday, October 16, 2012, at 11:00a.m. local time at Ditech's offices, 3099 North First Street, California 95134, for the following purposes:

1.

To elect our Board of Directors' nominees for director to hold office until the 2015 Annual Meeting of Stockholders.



2.

To approve the amendment of our Certificate of Incorporation to effect a reverse stock split at a ratio to be determined by the Board of Directors.



3.

To ratify the selection by Ditech's Audit Committee of Burr Pilger Mayer, Inc. as Ditech's independent registered public accounting firm for Ditech's fiscal year ending April 30, 2013.



4.

To conduct any other business properly brought before the meeting.

        These items of business are more fully described in the Proxy Statement accompanying this Notice.

        The record date for the Annual Meeting is August 31, 2012. Only stockholders of record at the close of business on that date may vote at the meeting or any adjournment thereof.

By Order of the Board of Directors

William J. Tamblyn
Secretary

San Jose, California September     , 2012

You are cordially invited to attend the meeting in person. Whether or not you expect to attend the meeting, please complete, date, sign and return the enclosed proxy as promptly as possible in order to ensure your representation at the meeting. A return envelope (which is postage prepaid if mailed in the United States) is enclosed for your convenience. Even if you have voted by proxy, you may still vote in person if you attend the meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder.

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Preliminary Copy

DITECH NETWORKS, INC.
3099 North First Street
San Jose, CA 95134

PROXY STATEMENT
FOR THE 2012 ANNUAL MEETING OF STOCKHOLDERS

October 16, 2012

QUESTIONS AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING

Why am I receiving these materials?

        We sent you this proxy statement and the enclosed proxy card because the Board of Directors of Ditech Networks, Inc. (the "Board of Directors" or "Board") is soliciting your proxy to vote at Ditech's 2012 Annual Meeting of Stockholders. You are invited to attend the annual meeting to vote on the proposals described in this proxy statement. However, you do not need to attend the meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card.

        Ditech intends to mail this proxy statement and accompanying proxy card on or about September     , 2012, to all stockholders of record entitled to vote at the annual meeting.

Who can vote at the annual meeting?

        Only stockholders of record at the close of business on August 31, 2012, will be entitled to vote at the annual meeting. On this record date, there were 26,894,963 shares of common stock outstanding and entitled to vote.

Stockholder of Record: Shares Registered in Your Name

        If on August 31, 2012, your shares were registered directly in your name with Ditech's transfer agent, Wells Fargo Bank, National Association, then you are a stockholder of record. As a stockholder of record, you may vote in person at the meeting or vote by proxy. Whether or not you plan to attend the meeting, we urge you to fill out and return the enclosed proxy card to ensure your vote is counted.

Beneficial Owner: Shares Registered in the Name of a Broker or Bank

        If on August 31, 2012, your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in "street name" and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the annual meeting. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the annual meeting. However, since you are not the stockholder of record, you may not vote your shares in person at the meeting unless you request and obtain a valid proxy from your broker or other agent.

What am I voting on?

        There are three matters scheduled for a vote:

•

Election of our Board of Directors' nominees for director;



•

Approval of the amendment of our Certificate of Incorporation to effect a reverse stock split at a ratio to be determined by our Board of Directors;



•

Ratification of Burr Pilger Mayer, Inc. as Ditech's independent registered public accounting firm for Ditech's fiscal year ending April 30, 2013.

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How do I vote?

        With respect to the election of directors, you may either:

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Vote "For" the nominees to the Board of Directors; or



•

Vote to "Withhold" your vote for the nominees to the Board of Directors;

        For each of the other matters to be voted on, you may vote "For" or "Against" or abstain from voting. The procedures for voting are fairly simple:

Stockholder of Record: Shares Registered in Your Name

        If you are a stockholder of record, you may vote in person at the annual meeting or vote by proxy using the enclosed proxy card. Whether or not you plan to attend the meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the meeting and vote in person if you have already voted by proxy.

•

To vote in person, come to the annual meeting and we will give you a ballot when you arrive.



•

To vote using the proxy card, simply complete, sign and date the enclosed proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before the annual meeting, we will vote your shares as you direct.

Beneficial Owner: Shares Registered in the Name of Broker or Bank

        If you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than from Ditech. Simply complete and mail the proxy card to ensure that your vote is counted. To vote in person at the annual meeting, you must obtain a valid proxy from your broker, bank, or other agent. Follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a proxy form.

        If your shares are registered in the name of a bank or brokerage firm, you may be eligible to vote your shares by telephone or through the Internet. A large number of banks and brokerage firms provide eligible shareholders the opportunity to vote in this manner. If your bank or brokerage firm allows for this, your voting form will provide instructions for such alternative method of voting.

How many votes do I have?

        On each matter to be voted upon, you have one vote for each share of common stock you own as of August 31, 2012.

What if I return a proxy card but do not make specific choices?

        If you return a signed and dated proxy card without marking any voting selections, your shares will be voted "For" the election of the nominees for director, "For" the amendment to our certificate of incorporation to effect a reverse stock split at a ratio to be determined by the Board of Directors, and "For" the ratification of the Audit Committee's appointment of our independent registered public accounting firm. If any other matter is properly presented at the meeting, your proxy (one of the individuals named on your proxy card) will vote your shares using his best judgment.

Who is paying for this proxy solicitation?

        We will pay for the entire cost of soliciting proxies. In addition to these mailed proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting

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proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners

What does it mean if I receive more than one proxy card?

        If you receive more than one proxy card, your shares are registered in more than one name or are registered in different accounts. Please complete, sign and return each proxy card to ensure that all of your shares are voted.

Can I revoke my proxy after submitting my proxy?

        Yes. You can revoke your proxy at any time before the final vote at the meeting. If you are the record holder of your shares, you may revoke your proxy in any one of three ways:

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You may submit another properly completed proxy card with a later date.



•

You may send a written notice that you are revoking your proxy to: Investor Relations Department, Ditech Networks, Inc., 3099 North First Street, San Jose, CA 95134.



•

You may attend the annual meeting and vote in person. Simply attending the meeting will not, by itself, revoke your proxy.

If your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank.

When are stockholder proposals due for next year's annual meeting?

        If you want to make a proposal to be considered for inclusion in next year's proxy materials, your proposal must be submitted in writing by May     , 2013, to Investor Relations Department, Ditech Networks, Inc., 3099 North First Street, CA 95134; however, if Ditech's 2013 Annual Meeting of Stockholders is not held on or between September 16, 2013, and November 15, 2013, then the deadline will be a reasonable time prior to the time we begin to print and mail our proxy materials. If you wish to submit a proposal that is not to be included in next year's proxy materials or nominate a director, you must do so no earlier than June 18, 2013, and no later than July 18, 2013; provided, however, that in the event that the date of the annual meeting is held more than 30 days prior to or more than 30 days after October 16, 2013, notice by the stockholder to be timely must be delivered not earlier than the close of business on the 120th day prior to the 2013 annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such annual meeting is first made. Stockholders are also advised to review our bylaws, which contain additional requirements with respect to advance notice of stockholder proposals and director nominations.

How are votes counted?

        Votes will be counted by the inspector of election appointed for the meeting, who will separately count "For" and "Withhold" and, with respect to proposals other than the election of directors, "Against" votes, abstentions and broker non-votes. Abstentions will be counted towards the vote total for each proposal, and will have the same effect as "Against" votes. Broker non-votes will not be counted towards the vote total for any proposal, will have no effect with respect to the election of directors, and will have the same effect as "Against" votes with respect to the proposal to amend our certificate of incorporation. There are not expected to be any broker non-votes in connection with the ratification of Burr Pilger Mayer, Inc. as our independent registered public accounting firm for our fiscal year ending April 30, 2013.

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        If your shares are held by your broker as your nominee (that is, in "street name"), you will need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker to vote your shares. If you do not give instructions to your broker, your broker can vote your shares with respect to "discretionary" items, such as the ratification of Burr Pilger Mayer, Inc. as Ditech's independent registered public accounting firm for Ditech's fiscal year ending April 30, 2013, but not with respect to "non-discretionary" items, such as the election of directors or approval of the amendment of our certificate of incorporation.

How many votes are needed to approve each proposal?

•

For the election of the directors, the nominees receiving the most "For" votes (among votes properly cast in person or by proxy) will be elected. Only votes "For" will affect the outcome.



•

For Proposal No. 2 to approve the amendment of our Certificate of Incorporation to effect a reverse stock split at a ratio to be determined by the Board of Directors, the proposal must receive a "For" vote from holders of a majority of the outstanding shares of our common stock, voting either in person or by proxy.



•

For Proposal No. 3 to approve the ratification of our Audit Committee's selection of our independent registered public accounting firm, the proposal must receive a "For" vote from holders of the majority of shares entitled to vote at the meeting, voting either in person or by proxy. If you "Abstain" from voting, it will have the same effect as an "Against" vote. There are not expected to be any broker non-votes with respect to this proposal.

What is the quorum requirement?

        A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if at least a majority of the outstanding shares are represented by stockholders present at the meeting or by proxy. On the record date, there were 26,894,963 shares outstanding and entitled to vote.

        Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, the chairman of the meeting or a majority of the votes present at the meeting may adjourn the meeting to another date.

How can I find out the results of the voting at the annual meeting?

        Preliminary voting results will be announced at the annual meeting. Final voting results will be published in a current report on Form 8-K to be filed by Ditech within four business days of the annual meeting, unless the final votes are not available, in which case the preliminary voting results will be published in a current report on Form 8-K to be filed by Ditech within four business days of the annual meeting, and the final voting results will be published in an amendment to that current report on Form 8-K when available.

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PROPOSAL 1

ELECTION OF DIRECTORS

        Ditech's Board of Directors is divided into three classes. Each class consists, as nearly as possible, of one-third of the total number of directors, and each class has a three-year term. Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors, unless the Board determines that the vacancy shall be filled by the stockholders. A director elected by the Board to fill a vacancy shall serve for the remainder of the full term of that class, and until the director's successor is elected and qualified. This includes vacancies created by an increase in the number of directors.

        The Board of Directors currently has four members. There are two directors in the class whose term of office expires in 2012. The Board of Directors has nominated Messrs. Alan Howe and Frank Sansone, who are currently directors of Ditech and whose terms of office expire at the annual meeting, to fill these positions. If elected at the annual meeting, Messrs. Howe and Sansone would serve until the 2015 annual meeting and until their successors are elected and have qualified, or until their earlier death, resignation or removal.

        It is Ditech's policy that its directors are encouraged to attend the Annual Meeting, and may do so telephonically. All of Ditech's directors then in office attended the 2011 Annual Meeting of Stockholders.

        Directors are elected by a plurality of the votes present in person or represented by proxy and entitled to vote at the Annual Meeting. The nominee receiving the highest number of affirmative votes will be elected. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the nominees named below. In the event that a nominee should be unavailable for election as a result of an unexpected occurrence, such shares will be voted for the election of such substitute nominee as the Board of Directors may propose.

        Each person nominated for election has agreed to serve if elected, and management has no reason to believe that the nominee will be unable to serve.

        The following are brief biographies of the nominees and each director whose term will continue after the Annual Meeting.

NOMINEES FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE 2015 ANNUAL MEETING

         Alan B. Howe , age 51, is currently co-founder and managing partner of Broadband Initiatives, LLC, a privately-held boutique advisory and consulting firm focused primarily on the wireless, telecom and technology sectors, a position he has held since 2003. He also has served since November of 2009 as a Managing Director with B Riley & Co. LLC in their corporate governance advisory group under a consulting agreement. Previously, he served as vice president of strategic and wireless business development for Covad Communications, Inc., a national broadband telecommunications company. Prior to that, Mr. Howe was chief financial officer and vice president of corporate development of Teletrac, Inc., and director of corporate development for Sprint PCS. Mr. Howe holds a B.S. in Business Administration and Marketing from the University of Illinois, and an MBA in Finance from Indiana University. Mr. Howe is currently a member of the public Boards of Directors of Selectica, Inc. He previously served on the public boards of Proxim, Inc., Crossroads, Inc., Alliance Semiconductor Inc., Altigen Communications, Inc., LCC International, Kitty Hawk, Inc., and Dyntek, Inc. which are no longer SEC reporting companies.

        Qualifications.     Mr. Howe came to our Board of Directors as a result of our settlement agreement with Lamassu Holdings L.L.C. ("Lamassu"), as described below. In determining whether to approve the settlement agreement with Lamassu, and therefore Mr. Howe joining our Board of Directors, the

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Board of Directors considered and found favorable Mr. Howe's financial expertise as a chief financial officer of a public company, and Mr. Howe's experience serving as a member of the boards of directors of multiple small public companies, including his experience in assessing strategic alternatives and his experience with telecommunications companies.

         Frank J. Sansone , age 41, has over 20 years of financial management and technology experience with a focus on managing all the financial elements of small fast growing public and private technology companies. He currently serves as Chief Financial Officer of Altec Products, Inc., a leading document management software provider. Previously, Mr. Sansone served as Chief Financial Officer of publicly-traded solar integrator Premier Power Renewable Energy, Inc., from November 2009 to August 2012. Mr. Sansone served as Chief Financial Officer for LiveOffice, an SAAS email archiving software & services company, from 20008 to 2009. Prior to his involvement with LiveOffice, Mr. Sansone served as the Chief Financial Officer of publicly-traded Guidance Software from July 2005 to August 2008, and as its Vice President of Finance from December 2002 to July 2005, where he also oversaw all the key financial aspects associated with taking the company public. Before joining Guidance Software, Mr. Sansone accumulated approximately 10 years of financial experience including working for five years as an Audit Manager at PricewaterhouseCoopers. Mr. Sansone is a CPA, currently inactive.

        Qualifications.     Mr. Sansone came to our Board of Directors as a result of our settlement agreement with Lamassu. In determining whether to approve the settlement agreement with Lamassu, and therefore Mr. Sansone joining our Board of Directors, the Board of Directors considered and found favorable Mr. Sansone's financial expertise as a chief financial officer of a public company, his experience with small public companies, and his experience in assessing strategic alternatives.

THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF THE ABOVE NAMED NOMINEES

DIRECTOR CONTINUING IN OFFICE UNTIL THE 2013 ANNUAL MEETING

         Kenneth G. Naumann, age 43, joined Ditech in November 2010 as Vice President of World Wide Sales. He was promoted to President in March of 2011, and to Chief Executive Officer in May 2011. Prior to joining Ditech, Mr. Naumann served as President and Chief Executive Officer of Scarab Consulting, a provider of computer forensics, electronic discovery and data hosting solutions, from 2008-2010, where he was responsible for managing an approximately 100 person firm. From 2006 to 2008, Mr. Naumann served as Vice President of World Wide Sales and Marketing for Paymetric, a provider of secure payments and tokenization technologies, where he was responsible for the company-wide sales function. He served as Vice President of World Wide Sales at Guidance Software, an enterprise security and digital forensics software company, from 2004 to 2006. Before Guidance Software, Mr. Naumann worked at BindView Development from 1993 to 2003, an enterprise security, compliance and network management software provider. During this time, he served in a variety of senior management roles including Vice President of the Americas and Vice President of World Wide Sales. He holds a BA in Philosophy from Hampden-Sydney College.

        Qualifications.     Mr. Naumann has over 15 years of experience in senior management and executive officer positions in the software and technology industry. Mr. Naumann has significant sales experience and operational experience running a company with similar size of Ditech. His experience in establishing a business vision and sales strategy is key to his opportunity with Ditech. Further, as our Chief Executive Officer he represents management on our Board of Directors and provides the Board of Directors with valuable insight into the day-to-day operations of Ditech's business.

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DIRECTOR CONTINUING IN OFFICE UNTIL THE 2014 ANNUAL MEETING

         J. Michael Gullard, age 67, has served as our director since January 16, 2012. Mr. Gullard has been the general partner of Cornerstone Management, a venture capital and consulting firm since 1984. He currently serves as a director of the publicly-held companies, Selectica, Inc., JDA Software, Inc. and Planar Systems, Inc. Mr. Gullard also serves as a member of the board of directors of the following non-reporting companies: Alliance Semiconductor Corporation, Proxim Inc. and Dyntek, Inc. From 1992 to 2004, he served as Chairman of netSolve, Incorporated, a publicly-held corporation that provides outsourced IT infrastructure management services. From 1996 to 2004, Mr. Gullard served as chairman of Merant PLC (formerly Micro Focus Group Ltd.), a publicly-held corporation specializing in change management software tools. Previously, Mr. Gullard held a variety of senior financial and operational management positions at Intel Corporation. Mr. Gullard holds a B.A. degree in Economics from Stanford University, and a Masters of Business Administration from Stanford's Graduate School of Business.

        Qualifications.     Mr. Gullard brings to our Board his extensive experience in the IT and software industries, and we believe his prior positions and current advisory roles provide the Board with leadership experience and operational know how; in addition his extensive public company board experience helps our Board in its compliance and governance discussions and strategies.

INDEPENDENCE OF THE BOARD OF DIRECTORS

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

        Consistent with these considerations, after review of all relevant transactions or relationships between each director, or any of his family members, and Ditech, its senior management and its independent registered public accounting firm, the Board affirmatively has determined that all of Ditech's current directors are independent directors within the meaning of the applicable Nasdaq Rules, except for Mr. Naumann, who is Ditech's President and Chief Executive Officer. In addition, Mr. William Hasler and Mr. David Sugishita, former directors of Ditech who resigned January 16, 2012, were also independent. Mr. Todd Simpson, our former Chief Executive Officer and a member of our Board until May 26, 2011, was not independent.

INFORMATION REGARDING THE BOARD OF DIRECTORS AND ITS COMMITTEES

        As required under the Nasdaq Rules, Ditech's independent directors meet in regularly scheduled executive sessions at which only independent directors are present.

        The Board currently has two standing committees: an Audit Committee and a Compensation Committee. Until January 16, 2012, the Board also had a Corporate Governance and Nominating

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Committee. The following table provides membership and meeting information for fiscal 2012 for each of the Board committees:

        On September 2, 2009, Ditech and Lamassu Holdings L.L.C. and certain of its affiliates (collectively, "Lamassu"), entered into a letter agreement settling a threatened proxy contest, in which Ditech and Lamassu agreed that each of Mr. Howe and Mr. Sansone would be nominated to be elected to the Board of Directors at the 2009 annual meeting of stockholders. In addition to the nomination of each of Mr. Howe and Mr. Sansone for election to the Board of Directors, the letter agreement also provided, among other things, that:

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If Mr. Sansone is unable to serve as a director at a time when Lamassu owns at least 5% of the Ditech common stock, Ditech will appoint a replacement director designated by Lamassu and reasonably acceptable to Ditech Networks; and



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Mr. Sansone and any replacement director will sign a conditional resignation from the Board of Directors, which may be accepted by the Board of Directors in the event that Lamassu's beneficial ownership of Ditech common stock falls below 5% of the outstanding Ditech common stock.

        Ditech filed a complete copy of the agreement with the SEC on September 3, 2009, as an exhibit to its Current Report on Form 8-K, and this summary is qualified in its entirety by reference to the entire agreement included therein.

        Below is a description of each committee of the Board of Directors. Each of the committees has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities. The Board of Directors has determined that each member of each committee meets the applicable rules and regulations regarding "independence" (as independence is currently defined in Rule 5605(a)(2) of the Nasdaq Rules) and that each member is free of any relationship that would interfere with his or her individual exercise of independent judgment with regard to Ditech.

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AUDIT COMMITTEE

        The Audit Committee of the Board of Directors oversees Ditech's corporate accounting and financial reporting process. For this purpose, the Audit Committee performs several functions. The Audit Committee: evaluates the performance of and assesses the qualifications of the independent registered public accounting firm; determines and approves the engagement of the independent registered public accounting firm; determines whether to retain or terminate the existing independent registered public accounting firm or to appoint and engage a new independent registered public accounting firm; reviews and approves the retention of the independent registered public accounting firm to perform any proposed permissible non-audit services; monitors the rotation of partners of the independent registered public accounting firm on Ditech's audit engagement team as required by law; confers with management and the independent registered public accounting firm regarding the effectiveness of internal controls over financial reporting; establishes procedures, as required under applicable law, for the receipt, retention and treatment of complaints received by Ditech regarding accounting, internal accounting controls or auditing matters and the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters; reviews the financial statements to be included in Ditech's Annual Report on Form 10-K; and discusses with management and the independent registered public accounting firm the results of the annual audit and the results of Ditech's quarterly financial statements. The Audit Committee has a written Audit Committee Charter, which is available on Ditech's website at www.ditechnetworks.com. The current members of the Audit Committee are Messrs. Howe, Gullard, and Sansone. The Audit Committee met four times during fiscal 2012, excluding times when it met during Board meetings.

        The Board of Directors annually reviews the Nasdaq Rules definition of independence for Audit Committee members and has determined that all members of Ditech's Audit Committee are independent (as independence is currently defined in Rule 5605(c)(2) of the Nasdaq Rules). The Board of Directors has determined that each of Messrs. Gullard, Howe and Sansone qualifies as an "audit committee financial expert," as defined in applicable SEC rules. The Board made a qualitative assessment of Mr. Gullard's level of knowledge and experience based on a number of factors, including his formal education and experience in senior management position in business and previous committee experience.

COMPENSATION COMMITTEE

        The Compensation Committee of the Board of Directors reviews and approves the overall compensation strategy and policies for Ditech. The Compensation Committee: reviews and approves corporate performance goals and objectives relevant to the compensation of Ditech's executive officers and other senior management; reviews and approves the compensation and other terms of employment of Ditech's Chief Executive Officer; reviews and approves the compensation and other terms of employment of the other executive officers; and administers Ditech's employee equity plans and other similar programs. The Compensation Committee has a written Compensation Committee Charter, which is available on Ditech's website at www.ditechnetworks.com. The current members of the Compensation Committee are Messrs. Gullard and Howe. The Compensation Committee met four times during fiscal 2012, excluding times when it met during Board meetings.

        The Compensation Committee does not delegate its authority to others. However, the Compensation Committee does receive recommendations as to executive officer compensation from management. Our Chief Executive Officer annually reviews the performance of each executive officer (other than the Chief Executive Officer himself, whose performance is reviewed solely by the Compensation Committee). Our Chief Executive Officer presents his compensation recommendations based on management reviews, including with respect to salary adjustments and annual bonus award amounts, and equity grants to the Compensation Committee. These recommendations are just one factor that the Compensation Committee takes into account in making its compensation decisions.

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Human Resources is involved in summarizing the applicable information and provides input based solely on survey information and trends.

        The Compensation Committee has engaged Compensia, Inc., an executive compensation consulting firm, periodically to conduct an annual review of its total compensation program for our executive officers. Compensia provides the Compensation Committee with relevant market data and alternatives to consider when making compensation decisions for the executive officers. Compensia provided updates on relevant information for assessment in fiscal 2012. No update was requested for fiscal 2011.

        Specifically, Compensia assisted the Compensation Committee with a marketplace assessment of our executive officers' compensation in comparison to the compensation for comparable positions within our core and broader groups in fiscal 2012.

CORPORATE GOVERNANCE AND NOMINATING COMMITTEE

        The Corporate Governance and Nominating Committee of the Board of Directors was disbanded on January 16, 2012, and its duties were assumed by the full Board at that time. The Board determined at that time, with the decrease in the size of the Board to four directors, that it did not need a separate committee for these purposes as the full Board comprised all but one member of the Corporate Governance and Nominating Committee, and therefore the Board could assume its functions, with Mr. Naumann, our Chief Executive Officer who is not an independent director, recusing himself from discussions and votes when it was appropriate to do so. The full Board adopted the positions and beliefs held by the Corporate Governance and Nominating Committee, and the discussion below with respect to the Corporate Governance and Nominating Committee refer to the Corporate Governance and Nominating Committee prior to January 16, 2012, and to the Board after such date.

        The Corporate Governance and Nominating Committee of the Board of Directors was responsible for identifying, reviewing and evaluating candidates to serve as directors of Ditech, reviewing and evaluating incumbent directors, recommending to the Board for selection candidates for election to the Board, making recommendations to the Board regarding the membership of the committees of the Board, assessing the performance of the Board, developing a set of corporate governance principles for Ditech, and recommending to the Board the compensation to be paid to outside directors. In assessing and recommending to the Board the compensation for our outside directors, the Corporate Governance and Nominating Committee assessed outside director compensation generally in the same manner as the Compensation Committee assessed executive officer compensation, including reviewing surveys prepared by Radford Associates, recommendations from Compensia, an outside consultant engaged by the Compensation Committee, and recommendations of management based on this information. The Corporate Governance and Nominating Committee had a written Corporate Governance and Nominating Committee Charter, which was available on Ditech's website at www.ditechnetworks.com.

        The Corporate Governance and Nominating Committee believes that candidates for director should have certain minimum qualifications, including being able to read and understand basic financial statements, and having the highest personal integrity and ethics. The Corporate Governance and Nominating Committee also intends to consider such factors as possessing relevant expertise upon which to be able to offer advice and guidance to management, having sufficient time to devote to the affairs of Ditech, demonstrated excellence in his or her field, having the ability to exercise sound business judgment and having the commitment to rigorously represent the long-term interests of Ditech's stockholders. However, the Corporate Governance and Nominating Committee retains the right to modify these qualifications from time to time. The Corporate Governance and Nominating Committee has established a process for identifying and evaluating nominees for director of Ditech. This process is that candidates for director nominees are to be reviewed in the context of the current composition of our Board, the operating requirements of Ditech and the long-term interests of

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stockholders. In conducting this assessment, the Corporate Governance and Nominating Committee considers diversity, age, skills, and such other factors as it deems appropriate given the current needs of the Board and Ditech, to maintain a balance of knowledge, experience and capability. In the case of incumbent directors whose terms of office are set to expire, the Corporate Governance and Nominating Committee reviews such directors' overall service to Ditech during their term, including the number of meetings attended, level of participation, quality of performance, and any other relationships and transactions that might impair such directors' independence. In the case of new director candidates, the Corporate Governance and Nominating Committee also determines whether the nominee must be independent for Nasdaq purposes, which determination is based upon applicable Nasdaq Rules, applicable SEC rules and regulations and the advice of counsel, if necessary. The Corporate Governance and Nominating Committee then uses its network of contacts to compile a list of potential candidates, but may also engage, if it deems appropriate, a professional search firm. The Corporate Governance and Nominating Committee conduct any appropriate inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of the Board.

        The Corporate Governance and Nominating Committee does not have a formal policy with respect to diversity, but considers diversity in assessing potential Board members as well as re-nominating current Board members. In considering diversity, Corporate Governance and Nominating Committee focuses on diversity of opinions and experiences. Although the Corporate Governance and Nominating Committee generally values diversity, it is only one of the factors that the Corporate Governance and Nominating Committee assesses in reviewing potential Board candidates.

        The Corporate Governance and Nominating Committee meet to discuss and consider such candidates' qualifications and then select a nominee for recommendation to the Board by majority vote. To date, the Corporate Governance and Nominating Committee has not paid a fee to any third party to assist in the process of identifying or evaluating director candidates, nor has it received a director nominee from a stockholder or stockholders holding more than 5% of our voting stock.

        The Corporate Governance and Nominating Committee will consider director candidates recommended by stockholders. The Corporate Governance and Nominating Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether the candidate was recommended by a stockholder or not. Stockholders who wish to recommend individuals for consideration by the Corporate Governance and Nominating Committee to become nominees for election to the Board may do so by delivering a written recommendation to the Corporate Governance and Nominating Committee at the following address: Ditech Networks, Inc., 3099 North First Street, San Jose, CA 95134, Attention: Director Nominations. For nominations for election at an Annual Meeting of Stockholders, this written recommendation must be delivered by at least the date 120 days prior to the anniversary date of the mailing of our proxy statement for the prior year's Annual Meeting of Stockholders. Submissions must include the full name of the proposed nominee, a description of the proposed nominee's business experience for at least the previous five years, complete biographical information, a description of the proposed nominee's qualifications as a director and a representation that the nominating stockholder is a beneficial or record owner of Ditech's stock. Any such submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a director if elected.

MEETINGS OF THE BOARD OF DIRECTORS

        The Board of Directors met 11 times during the last fiscal year. Each of our current Board members attended or participated telephonically in 75% or more of the aggregate of the meetings of the Board and of the committees, on which he served, held during the period for which he was a director or committee member, respectively during fiscal 2012.

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STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS

        Ditech's Board has adopted a formal process by which stockholders may communicate with the Board or any of its directors. Stockholders who wish to communicate with the Board may do so by sending written communications addressed to the Secretary of Ditech Networks, Inc. at 3099 North First Street, San Jose, CA 95134, Attention: Secretary. Communications also may be sent by e-mail to the following address stockholderinquiries@ditechnetworks.com. Any communication sent must state the number of shares owned by the security holder making the communication. The Secretary will review each communication. The Secretary will forward such communication to the Board or to any individual director to whom the communication is addressed unless the communication is unduly hostile, threatening or similarly inappropriate, in which case, the Secretary will discard the communication. All communications directed to the Audit Committee in accordance with Ditech's Escalation Process for Suspected Illegal Acts, Fraud or Departures from Ditech's Code of Conduct and Questioned Accounting/Reporting Matter that relate to questionable accounting or auditing matters involving Ditech will be promptly and directly forwarded to the Audit Committee.

BOARD LEADERSHIP STRUCTURE

        The Board of Directors has maintained a leadership structure that has either been (a) a separate Chairman of the Board and Chief Executive Officer, or (b) a Chairman of the Board and Chief Executive Officer who is the same person, together with a strong Lead Independent Director. The Board believes that either of these structures is an appropriate structure for Ditech, as each provides for an independent director to take the functional role where it is appropriate for an independent director to fulfill that function. Currently, the Chairman of the Board and Chief Executive Officer are separate persons.

BOARD'S ROLE IN RISK OVERSIGHT

        The Board of Directors has an active role, as a whole and also at the committee level, in overseeing management of Ditech's risks. The Board of Directors regularly reviews information regarding the company's credit, liquidity and operations, as well as the risks associated with each. The Audit Committee's charter mandates the Audit Committee to review and discusses with management, and the company's independent registered public accounting firm, as appropriate, the company's major financial risk exposures and the steps taken by management to monitor and control these exposures. The Compensation Committee is responsible for overseeing the management of risks relating to the company's executive compensation plans and arrangements. The Board manages risks associated with the independence of the Board and potential conflicts of interest. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board of Directors is regularly informed through committee reports about such risks.

CODE OF BUSINESS CONDUCT AND ETHICS

        Ditech has adopted the Ditech Networks, Inc. Code of Conduct and Ethics that applies to all officers, directors and employees. A copy of the Code of Conduct and Ethics will be sent to any person requesting a copy without charge. To request a copy of our Code of Conduct and Ethics, please contact: Investor Relations, Ditech Networks, Inc., 3099 North First Street, San Jose, CA 95134, or call our Investor Relations Department at (408) 883-3636. If Ditech makes any substantive amendments to the Code of Conduct and Ethics or grants any waiver from a provision of the Code to any executive officer or director, Ditech will promptly disclose the nature of the amendment or waiver on a Form 8-K filing, or if permitted by Nasdaq, on its website.

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REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS(1)

        The Audit Committee of Ditech is composed of three non-employee directors: Mr. Gullard, Mr. Howe, and Mr. Sansone.

        Management is responsible for Ditech's internal controls and the financial reporting process. The independent registered public accounting firm is responsible for performing an independent audit of Ditech's consolidated financial statements in accordance with generally accepted auditing standards and to issue a report thereon. The Audit Committee's responsibility is to monitor and oversee these processes.

        In this context, the Audit Committee has reviewed and discussed the audited consolidated financial statements with management and Burr Pilger Mayer, Inc., Ditech's independent registered public accounting. The discussions with Burr Pilger Mayer, Inc. also included the matters required by Statement on Auditing Standards No. 61 (Communications with Audit Committees). The Audit Committee received from Burr Pilger Mayer, Inc. written disclosures and the letter regarding its independence as required by applicable requirements of the PCAOB. This information was discussed with Burr Pilger Mayer, Inc.

        Based on its review and discussions with management and the independent registered public accounting firm, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in Ditech's Annual Report on Form 10-K for the fiscal year ended April 30, 2012, filed with the Securities and Exchange Commission.

Audit Committee:
J. Michael Gullard
Alan B. Howe
Frank J. Sansone

PROPOSAL NO. 2

APPROVAL OF AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
TO EFFECT A REVERSE STOCK SPLIT OF THE COMPANY'S COMMON STOCK

        The Board has approved, and is hereby soliciting stockholder approval of, an amendment to the Restated Certificate of Incorporation (the "Restated Certificate") to effect a reverse stock split of Ditech's common stock in a ratio of at least one-for-three and of up to one-for-ten (the "Reverse Stock Split"). The precise ratio of the Reverse Stock Split shall be a whole number within this range, determined in the sole discretion of the Board. If the Reverse Stock Split is implemented, the number of issued and outstanding shares of common stock would be reduced, in accordance with the ratio of the Reverse Stock Split the Board selects. Except for the treatment of fractional shares described in further detail below, each stockholder will hold the same percentage of common stock outstanding immediately following the Reverse Stock Split as such stockholder held prior to the Reverse Stock Split.

        By approving this proposal, stockholders would give the Board authority but not the obligation, to effect the Reverse Stock Split and full discretion to approve the ratio of the Reverse Stock Split at which shares shall be reclassified, from and including a ratio of one-for-three and up to and including a

   

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(1)

Notwithstanding anything to the contrary set forth in any of our previous filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate future filings, including this Proxy Statement, in whole or in part, the material in this report is not "soliciting material," is not deemed "filed" with the SEC, and is not to be incorporated by reference into any filing of Ditech under the 1933 Act or 1934 Act regardless of any general incorporation language in such filings.

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ratio of one-for-ten. If this proposal is approved, the Board may, after its adoption but prior to its effectiveness, without further action of the stockholders, abandon the amendment contemplating the Reverse Stock Split.

Form of Amendment

        The amendment to the Restated Certificate that will be filed to effect the Reverse Stock Split will include reference to the range of the ratio of the Reverse Stock Split noted above. Prior to filing the amendment with the Secretary of State of the state of Delaware, the Board will approve the exact ratio at which the Reverse Stock Split will be effected, and Ditech will publicly announce the Board's determination of such ratio. In connection with the public announcement of the exact ratio, unless the Board has determined to abandon the proposed amendment, Ditech will file the certificate of amendment with respect to the Reverse Stock Split, and the Reverse Stock Split will become effective (the "Effective Time"). The proposed amendment to the Restated Certificate amends Article IV.A. of the Restated Certificate to read in its entirety as set forth in Appendix A to this Proxy Statement, with bracketed portions indicating the ratio of the Reverse Stock Split range; the precise ratio of the Reverse Stock Split will be determined by the Board in its sole discretion and will replace the bracketed language. See below for treatment of fractional shares.

Background and Purpose of the Amendment

        The primary purpose of the Reverse Stock Split is to increase the market price of the common stock, so as to maintain compliance with applicable listing rules of The NASDAQ Stock Market ("Nasdaq"), on which the common stock currently trades.

        Specifically, Nasdaq Listing Rule 5450(a)(1) requires that the closing bid price of a listed security traded on the Nasdaq be at least $1.00 per share. If the closing bid price of an issuer's stock falls below the minimum of $1.00 per share for thirty consecutive trading days, Nasdaq has the right to notify the issuer and provide an initial period of 180 calendar days in which the issuer may regain compliance. If the issuer's shares fail to trade at a price per share of at least $1.00 for a period of 10 consecutive trading days during the 180 days following the notification date, Nasdaq may delist the issuer's shares from trading.

        On November 10, 2011, Ditech received written notification from Nasdaq that it was no longer in compliance with Rule 5450(a)(1) because its shares had traded below $1.00 per share for more than thirty consecutive trading days. Per the terms of this notice, if the per share price of the common stock did not close above $1.00 for ten consecutive trading days prior to May 8, 2012, subject to certain discretionary authority on the part of the Nasdaq to extend this period, the common stock would be subject to delisting from the Nasdaq Global Market. If a delisting from Nasdaq were to occur, the common stock, in order to continue trading, would need to be listed on an alternative market, such as the OTC Bulletin Board or in the "pink sheets." These alternative markets are generally considered to be less efficient than, and not as broad as, the Nasdaq.

        On May 9, 2012, Ditech received from Nasdaq a letter stating that the bid price of Ditech common stock had closed at less that $1.00 per share over the previous 30 consecutive business days and, as a result, did not comply with the Nasdaq Listing Rule 5450(a)(1). The letter further stated that unless Ditech applied to transfer its common stock to The Nasdaq Capital Market or requested an appeal of this determination to the Nasdaq Listing Qualifications Panel on or before May 16, 2012, the Staff had determined that the Ditech common stock would be scheduled for delisting at the opening of business on May 18, 2012. Ditech appealed the Staff's determination to the Nasdaq Listing Qualifications Panel on or before May 16, 2012, which stayed the delisting of the Ditech Networks common stock pending the Panel's decision. The Panel determined to continue the listing until November 5, 2012, provided that Ditech took action that would increase the price of Ditech's common

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stock to above $1.00 per share for ten consecutive trading days prior to November 5, 2012. The Reverse Split is being undertaken to cause the trading price of Ditech common stock to increase to above $1.00.

        In addition to maintaining compliance with Nasdaq rules, the Board further believes that an increased stock price may encourage investor interest and improve the marketability of the common stock to a broader range of investors, and thus improve liquidity. Because of the trading volatility often associated with low-priced stocks, many brokerage firms and institutional investors have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers.

        The Board believes that approval of a range for the ratio of the Reverse Stock Split as opposed to an exact ratio of the Reverse Stock Split provides it with flexibility to achieve the purposes of the Reverse Stock Split. In making its determination of the precise ratio of the Reverse Stock Split, the Board will consider a number of factors, including marketability and liquidity of the common stock, historical trading prices and volumes of Ditech's common stock, prevailing market and economic conditions, and anticipated market reaction to the Reverse Stock Split, among other factors that it may consider relevant.

Impact of the Reverse Stock Split on Stockholders

        The Reverse Stock Split, if effected, will impact all stockholders of Ditech uniformly and will not effect any individual stockholder's proportionate ownership interest or voting power, except to the extent the Reverse Stock Split results in any stockholder holding fractional shares of common stock (see below).

        The principal effects of the Reverse Stock Split will be:

•

Each three, or any whole number up to ten (as determined by the Board), shares of common stock will be combined into one share of common stock;



•

Based upon the ratio selected by the Board, proportionate adjustments will be made to the per share exercise price and/or the number of shares issuable upon conversion or exercise of all of Ditech's outstanding options, restricted stock units, warrants and any other convertible or exchangeable securities entitling holders thereof to purchase, exchange for, or convert into shares of common stock, with such adjustment resulting in approximately the same aggregate purchase price to be required to be paid for such security upon exercise immediately preceding the Reverse Stock Split ratio; and



•

The number of shares reserved for issuance pursuant to Ditech's equity incentive plans will be reduced proportionally based upon the Reverse Stock Split ratio selected by the Board.

        The Reverse Stock Split will not effect the par value, nor any of the terms of the common stock. After the Reverse Stock Split all shares of common stock will have the same voting rights, and rights to dividends and other distributions by Ditech.

        At the Effective Time and except as provided in the instance of fractional shares, all shares of common stock will be combined, automatically and without further action on the stockholders' part, into the number of shares determined according to the Reverse Stock Split ratio determined by the Board.

        After the Effective Time, the common stock will have a new Committee on Uniform Securities Identification Procedures ("CUSIP") number, which is a number used to identify Ditech's equity securities, and stock certificates with the older CUSIP number will need to be exchanged for stock certificates with the new CUSIP number by following the procedures described below.

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        After the Effective Time, Ditech will continue to be subject to periodic reporting and other requirements of the Exchange Act. The common stock will continue to be listed on the Nasdaq under the symbol "DITC," although Nasdaq will add the letter "D" to the end of the trading symbol for a period of 20 trading days after the Effective Time to indicate that the Reverse Stock Split has occurred.

Certain Risks Associated with the Reverse Stock Split

        Effecting the Reverse Stock Split is intended, absent other factors, to increase the per share price of the common stock. However, factors such as Ditech's financial performance and overall market conditions may adversely effect the price of the common stock, independent of the impact of the Reverse Stock Split. Due to such factors, there can be no assurance that the Reverse Stock Split, if implemented, will result in the intended benefits described above. Similarly, if the per share price of the common stock does increase due to the effect of the Reverse Stock Split, there is no assurance that the increase will be in proportion to the reduction in the number of shares outstanding before the Reverse Stock Split, or that the market price of the common stock, after any such increase, will not decrease in the future. Accordingly, after effecting the split, Ditech's stock price may not remain above $1.00 for ten consecutive business days, and Ditech may be subject to delisting, as described above.

        Finally, the Reverse Stock Split may result in some stockholders holding "odd lots" of less than 100 shares of common stock. Odd lot shares may be more difficult to sell and may lead to increase brokerage/transaction costs relative to "round lots" of multiples of 100 shares.

Cash Payment In Lieu Of Fractional Shares

        No fractional shares of common stock would be issued if the Reverse Stock Split is implemented. Instead, in lieu of any fractional shares to which a holder of common stock would otherwise be entitled as a result of the Reverse Stock Split, Ditech shall pay cash equal to such fraction multiplied by the closing sales price of the common stock on the Nasdaq Global Market on the last business day prior to the Effective Time. As of September 6, 2012, there were approximately 90 stockholders of record of the common stock. Upon stockholder approval of this proposal, if the Board elects to implement the Reverse Stock Split, stockholders owning less than the number of shares determined by the Board to converted into one share of common stock prior to the Effective Reverse Stock Split would be eliminated.

        If a stockholder holds their shares in certificated form, and would otherwise be entitled to payment for their fractional share interest, the stockholder will receive a check as soon as practicable after the Effective Time and after the stockholder has submitted an executed transmittal letter and surrendered all Old Certificates, as described below. Stockholders who hold shares in book-entry form are entitled to payment in lieu of fractional shares as soon as practicable after the Effective Time without further action on their part. Stockholders who hold shares through a broker, dealer, bank or other nominee should contact that entity or individual for information on the treatment and processing of their fractional shares held by that respective entity. By signing and cashing a check, stockholders will warrant that they owned shares of common stock for which they received a cash payment. The cash payment is subject to applicable federal and state income tax and state abandoned property laws. Stockholders will not be entitled to interest payments for any time elapsed between the Effective Time and when payment is received.

Effect on Beneficial Holders of Common Stock (holders in "street name")

        After the Effective Time of the Reverse Stock Split, shares held by stockholders through a broker, dealer, bank or other nominee will be treated in the same manner as shares held by stockholders whose shares are registered in their own names. Brokers, dealers, banks and other nominees will be instructed to effect the Reverse Stock Split for the beneficial holders holding their shares in street name. These

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brokers, dealers, banks and other nominees may have other procedures for processing the Reverse Stock Split and making payment for fractional shares. Stockholders holding their shares in street name should contact their bank, broker, custodian or other nominee if they have any questions.

Effect on Registered "Book-Entry" Holders of Common Stock (holder who are registered on the transfer agent's books and records but do not hold stock certificates)

        After the Effective Time of the Reverse Stock Split, holders of common stock registered in book-entry form with our transfer agent who do not hold certificated shares, will not need to take any action to receive whole shares after the Reverse Stock Split or payment in lieu of fractional shares, as applicable.

Effect on Certificated Shares

        After the Effective Time of the Reverse Stock Split, holders of common stock in certificated form will be sent a letter of transmittal by the transfer agent. The letter of transmittal will contain instructions on how a stockholder should surrender his or her certificate representing shares of common stock (the "Old Certificates") to the transfer agent in exchange for certificates representing the split-adjusted whole shares of common stock (the "New Certificates"). No New Certificates will be issued until a stockholder has surrendered all old Certificates, together with a properly completed and executed letter of transmittal to the transfer agent. Stockholders will not be required to pay a transfer or other fee to exchange Old Certificates. Until surrendered, Ditech will deem outstanding Old Certificates held by stockholders to be cancelled and only to represent the number of whole shares of post-Reverse Stock Split common stock to which these stockholders are entitled. Any Old Certificates submitted for exchange, whether because of a sale, transfer or other disposition of stock, will automatically be exchanged for New Certificates. If an Old Certificate has a restrictive legend on its back, the New Certificate will be issued with the same restrictive legends. If a stockholder is entitled to a payment in lieu of any fraction share interest it will be made as described above.

        STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATES AND SHOULD NOT SUBMIT ANY CERTIFICATES UNTIL REQUESTED TO DO SO.

No Appraisal Rights

        Under the Delaware General Corporation Law, stockholders are not entitled to appraisal rights with respect to the Reverse Stock Split, and Ditech will not independently provide stockholders with any such right.

Material U.S. Federal Income Tax Consequences of the Effective Reverse Stock Split

        The following discussion summarizes the material U.S. federal income tax considerations of the Reverse Stock Split that would be expected to apply generally to U.S. Holders (as defined below) of Ditech common stock. This summary is based upon current provisions of the Internal Revenue Code of 1986, as amended, or the Code, existing Treasury Regulations under the Code and current administrative rulings and court decisions, all of which are subject to change or different interpretation. Any change, which may or may not be retroactive, could alter the tax consequences to Ditech or the Ditech stockholders as described in this summary. No ruling from the U.S. Internal Revenue Service has been or will be requested in connection with the Reverse Stock Split. No attempt has been made to comment on all U.S. federal income tax consequences of the Reverse Stock Split that may be relevant to particular U.S. Holders, including holders: (i) who are subject to special tax rules such as dealers, brokers and traders in securities, mutual funds, regulated investment companies, real estate investment trusts, insurance companies, banks or other financial institutions or tax-exempt entities; (ii) who are subject to the alternative minimum tax provisions of the Code; (iii) who acquired their shares in

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connection with stock options, stock purchase plans or other compensatory transactions; (iv) who hold their shares as a hedge or as part of a hedging, straddle, "conversion transaction", "synthetic security", integrated investment or any risk reduction strategy; (v) who are partnerships, limited liability companies that are not treated as corporations for U.S. federal income tax purposes, S corporations, or other pass-through entities or investors in such pass-through entities; (vi) who do not hold their shares as capital assets for U.S. federal income tax purposes (generally, property held for investment within the meaning of Section 1221 of the Code); (vii) who hold their shares through individual retirement or other tax-deferred accounts; (viii) whose shares constitute qualified small business stock with the meaning of Section 1202 of the Code; or (ix) who have a functional currency for United States federal income tax purposes other than the U.S. dollar.

        In addition, the following discussion does not address the tax consequences of the Reverse Stock Split under state, local and foreign tax laws. The discussion assumes that for U.S. federal income tax purposes the Reverse Stock Split will not be integrated or otherwise treated as part of a unified transaction with any other transaction. Furthermore, the following discussion does not address the tax consequences of transactions effectuated before, after or at the same time as the Reverse Stock Split, whether or not they are in connection with the Reverse Stock Split.

        For purposes of this discussion, a U.S. Holder means a beneficial owner of Ditech common stock who is: (i) an individual who is a citizen or resident of the United States; (ii) a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in the United States or under the laws of the United States or any subdivision thereof; (iii) an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or (iv) a trust (other than a grantor trust) if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (B) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

        HOLDERS OF DITECH COMMON STOCK ARE ADVISED AND EXPECTED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT IN LIGHT OF THEIR PERSONAL CIRCUMSTANCES AND THE CONSEQUENCES OF THE REVERSE STOCK SPLIT UNDER STATE, LOCAL AND FOREIGN TAX LAWS.

        No gain or loss will be recognized by Ditech as a result of the Reverse Stock Split. A Ditech stockholder who receives solely a reduced number of shares of common stock pursuant to the Reverse Stock Split will generally recognize no gain or loss. A Ditech stockholder who receives cash in lieu of a fractional share interest will generally recognize gain or loss equal to the difference between (i) the portion of the tax basis of the pre-reverse split shares allocated to the fractional share interest and (ii) the cash received. A Ditech stockholder's basis in its post-reverse split shares, will be equal to the aggregate tax basis of such stockholder's pre-reverse split shares decreased by the amount of any basis allocated to any fractional share interest for which cash is received. The holding period of Ditech stock received in the Reverse Stock Split will include the holding period of the pre-reverse split shares exchanged. For purposes of the discussion of the basis and holding periods for shares of Ditech stock, stockholders who acquired different blocks of Ditech stock at different times for different prices must calculate their basis, gains and losses, and holding periods separately for each identifiable block of such stock exchanged, converted, canceled or received in the Reverse Stock Split. Any gain or loss recognized by a Ditech stockholder as a result of the Reverse Stock Split will generally be a capital gain or loss and will be long term capital gain or loss if the stockholder's holding period for the shares of Ditech stock exchanged is more than one year.

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Votes Required

        The affirmative vote of stockholders holding at least a majority of the shares of the common stock outstanding on the Record Date is required for approval of this proposal. All abstentions and failures to return a proxy card will have the same effect as a vote against this proposal.

THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 2

PROPOSAL 3

RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

        The Audit Committee of the Board of Directors has selected Burr Pilger Mayer, Inc. as Ditech's independent registered public accounting firm for the fiscal year ending April 30, 2013, and the Board has further directed that management submit the selection independent registered public accounting firm for ratification by the stockholders at the Annual Meeting. Burr Pilger Mayer, Inc. audited Ditech's financial statements for the fiscal year ended April 30, 2012. Representatives of Burr Pilger Mayer, Inc. are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.

        Neither Ditech's bylaws nor other governing documents or law require stockholder ratification of the selection of Burr Pilger Mayer, Inc. as Ditech's independent registered public accounting firm. However, the Audit Committee of the Board is submitting the selection of Burr Pilger Mayer, Inc. to the stockholders for ratification as a matter of good corporate practice.

        If the stockholders fail to ratify the selection, the Audit Committee of the Board will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee of the Board in its discretion may direct the appointment of different independent auditors at any time during the year if they determine that such a change would be in the best interests of Ditech and its stockholders.

        The affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the annual meeting is required to ratify the selection of Burr Pilger Mayer, Inc. Abstentions will be counted toward the tabulation of votes cast on proposals presented to the stockholders and will have the same effect as negative votes. Broker non-votes are counted towards a quorum, but are not counted for any purpose in determining whether this matter has been approved.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S FEES

        The following table represents aggregate fees billed to Ditech Networks for fiscal years ended April 30, 2012, and April 30, 2011, by Burr Pilger Mayer, Inc.:

All fees described above were approved by the Audit Committee

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PRE-APPROVAL POLICIES AND PROCEDURES.

        The Audit Committee has adopted a policy and procedures for the pre-approval of audit and non-audit services rendered by our independent registered public accounting firm, Burr Pilger Mayer, Inc. The policy generally pre-approves specified services in the defined categories of audit and audit-related services, and tax services up to specified amounts. Pre-approval may also be given as part of the Audit Committee's approval of the scope of the engagement of the independent registered public accounting firm or on an individual explicit case-by-case basis before the independent registered public accounting firm is engaged to provide each service. The pre-approval of services may be delegated to one or more of the Audit Committee's members, but the decision must be reported to the full Audit Committee at its next scheduled meeting. The Audit Committee has determined that the rendering of the services other than audit services by Burr Pilger Mayer, Inc. is compatible with maintaining the principal accountant's independence, within these defined categories of audit related and tax services.

         THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 3

SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth certain information regarding the ownership of our common stock as of June 30, 2012, by: (1) each director and each nominee for director; (2) each of the executive officers named in the Summary Compensation Table; (3) all our executive officers and directors as a group; and (4) all those known by us to be beneficial owners of more than five percent of our common stock, if any. We do not have any class of equity securities outstanding other than our common stock.

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EXECUTIVE COMPENSATION AND RELATED
INFORMATION

COMPENSATION OF EXECUTIVE OFFICERS

Summary of Compensation

        The following table shows the compensation awarded or paid to, or earned by, our Chief Executive Officer and our two other most highly compensated executive officers serving in such capacity at April 30, 2012. We refer to these employees collectively as our "Named Executive Officers."

Summary Compensation Table

        Based on company performance, the only bonuses paid were to Mr. Naumann in fiscal year April 30, 2012.

        Based on company performance, no bonuses were granted in the fiscal year ended April 30, 2011.

        No compensation was paid out based on the Non-Equity Incentive Plan for the fiscal year ended April 30, 2011. Mr. Naumann received a discretionary prorated bonus for the 4 ^th  quarter of fiscal 2011 as noted in footnote (5) above. The Non-Equity Incentive Plan for each of fiscal 2011 was based primarily on Ditech's operating plan, with 40% of the target bonus tied to revenue performance, 30% to operating performance, 20% to individual performance and 10% a discretionary portion. No payout was payable with respect to the revenue component if revenue was not at least 80% of operating plan,

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and no payout was payable on operating performance if operating performance did meet operating plan in fiscal 2011. There was no management bonus plan for fiscal 2012 other than for the last half of fiscal 2012, other than for Mr. Naumann, as described below.

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

Non-Equity Incentive Plan

        In fiscal 2011, Ditech had an executive bonus plan, in which each of the Ditech executive officers participated. Each executive officer was assigned a target bonus, and the executive officer could receive up to that bonus if specified goals were met. The target bonus amount for the Mr. Tamblyn was $159,840. Mr. Naumann was not a participant in the 2011 bonus plan, and Mr. Brown's cash incentive compensation was solely sales commissions. The goals were weighted 40% to revenue performance, 30% to operating performance, 20% to individual goals, and 10% as a discretionary amount. During fiscal 2011, no bonuses were paid under the executive bonus plan as the minimum target amounts were not met.

        During fiscal year 2012, only Mr. Naumann had an approved plan for performance, which was solely for the last half of fiscal 2012. Cash target bonus for each quarter was $30,000, and his actual bonus would be determined based on performance for the quarter as follows:

•

70% of his bonus will be based on company performance, to be divided equally between (1) quarterly revenue, (2) use of cash and (3) EBITDA (earnings before interest, tax, depreciation and amortization). If the actual company performance for the category equals or exceeds the established level of performance for the category, then 100% of that portion of the target bonus will be paid, otherwise no portion of that portion of the target bonus will be paid. The established level of company performance for each quarter for each metric is as set forth in Ditech's fiscal 2012 operating plan, other than revenue, which is 85% of plan revenue.



•

30% of his bonus will be based on Mr. Naumann's individual performance in achieving specified strategic goals. The Compensation Committee was to determine what portion, if any, of this portion of his bonus will be paid after determining the level of success of Mr. Naumann in achieving the specified strategic goals.

Equity grants in Fiscal 2012

        On December 9, 2011, the following Named Executive Officers received the following grants of retention restricted stock units ("RSUs"): Mr. Naumann (400,000 shares); Mr. Tamblyn (200,000 shares); and Mr. Brown (125,000 shares). These RSUs vest over three years, with 33 ¹ / 3  percent at the first year anniversary and then ratably every six months thereafter, and vesting accelerates upon a termination of employment other than for cause within one year following a change of control of Ditech, or a change in control of Ditech in which the RSUs are not assumed.

Equity grants in Fiscal 2011

        Mr. Naumann received, in December 2010 in connection with his hiring, the following: a grant of restricted stock units ("RSU's") for 20,000 shares; and a stock option for 140,000 shares. The stock options were granted with an exercise price equal to the fair market value of the common stock on the date of grant, have a ten year term, and vest over four years. No other equity grants were made to the Named Executive Officers in fiscal 2011.

        In addition, in January 2011, the vesting criteria of an option grant made in May 2009 to Mr. Brown for 25,000 shares was revised. The options were revised to vest with respect to achieving specified new revenue opportunities. These options expired on May 1, 2012.

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Outstanding Equity Awards at Fiscal Year-End

        The following table shows for the fiscal year ended April 30, 2012, certain information regarding outstanding equity awards at fiscal year end for the Named Executive Officers.

Outstanding Equity Awards at Fiscal Year-End

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Potential Payments Upon Termination or Change of Control

        Severance Benefit Plan.     On December 9, 2011, the Compensation Committee adopted an Amended and Restated Severance Benefit Plan, which amended and restated a prior Change of Control Amended and Restated Severance Benefit Plan. Each of Ditech's current executive officers is participants in the Severance Plan, and each is referred to as a "participant."

        A participant in the Severance Plan will receive, (a) if the participant's employment with Ditech is terminated due to an "involuntary termination without cause" or a "constructive termination" (as those terms are defined in the Severance Plan), in either case either within one (1) month prior to or twelve (12) months following a "change in control" (a "Change of Control Termination"), or (b) if the participant's employment with Ditech is terminated due to an "involuntary termination without cause\" (as that term is defined in the Severance Plan) that is not a Change of Control Termination (a "Termination Not In Connection With a Change in Control"):

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        For purposes of the Severance Plan:

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

        (1)   the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of Ditech of more than fifty percent (50%) of the voting stock of Ditech;

        (2)   a merger or consolidation in which Ditech is a party; or

        (3)   the sale, exchange, or transfer of all or substantially all of the assets of Ditech.

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

        (1)   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 reduction; provided, however, that it shall not be a "constructive termination" if, following the effective date of the change in control, either (a) Ditech 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 Ditech 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;

        (2)   a material reduction in the participant's base salary (except for salary decreases generally applicable to Ditech's other similarly situated employees);

        (3)   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 Ditech's business to an extent substantially consistent with participant's prior business travel obligations;

        (4)   a material breach by Ditech of any provisions of the Severance Plan or any enforceable written agreement between Ditech and the participant; or

        (5)   any failure by Ditech to obtain assumption of the Severance Plan by any successor or assign of Ditech.

provided, however, that a resignation shall not be deemed a constructive termination unless (w) the participant provides Ditech with written notice that the participant believes that an event described above has occurred, (x) the constructive termination notice is given within ninety (90) days of the date the event occurred, (y) Ditech does not rescind or cure the conduct giving rise to the event within thirty (30) days of receipt by Ditech of the constructive termination notice (the "Cure Period"), and (z) he 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.("Resignation Period").

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

        (1)   the participant's violation of any material provision of Ditech's standard agreement relating to proprietary rights;

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        (2)   the participant participates in any act of theft or dishonesty;

        (3)   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 Ditech;

        (4)   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;

        (5)   participant's violation of Ditech's ethics or insider trading policy which results or could reasonably be expected to result in material harm to Ditech;

        (6)   the participant participates in financial accounting improprieties which results or could reasonably be expected to result in material harm to Ditech; or

        (7)   participant's failure to cooperate with a governmental investigation regarding Participant or Ditech which results or could reasonably be expected to result in material harm to Ditech.

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

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

COMPENSATION OF DIRECTORS

        The following table shows for the fiscal year ended April 30, 2012, certain information with respect to the compensation of all non-employee directors of Ditech:

Director Compensation

        The following options were outstanding as of April 30, 2012: Mr. Gullard: 35,000; Mr. Howe: 55,000; and Mr. Sansone: 55,000.

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        The following RSUs were outstanding as of April 30, 2012: Mr. Gullard 10,000; Mr. Howe 10,000; and Mr. Sansone 10,000.

        Standard Cash Compensation Arrangements with Outside Directors.     During fiscal 2012, the standard amounts of cash annual retainers for our non-employee directors was as set forth in the table below. Fees were paid quarterly in arrears. Additionally, directors were entitled to be reimbursed for certain expenses in connection with attendance at board and committee meetings.

        In addition, our non-employee directors received per meeting fees as set forth in the table below until December 2011. In December 2011 the Board eliminated the per meeting fees.

        Equity Compensation for Outside Directors.     Pursuant to a standard arrangement adopted by our Board, upon initial appointment, each non-employee director is automatically granted an option to purchase 35,000 shares of Ditech's common stock, which is subject to annual vesting over a four-year period from the date of grant. In addition, each non-employee director will automatically be granted a fully-vested option to purchase 10,000 shares of Ditech's common stock immediately following each annual meeting of stockholders; provided, that such person has served as a non-employee director of Ditech for at least six months as of the date of the applicable annual meeting of stockholders. The Board also made a grant of 10,000 shares of RSUs in December 2011 in connection with the elimination of the per meeting fees, which grants vested on September 16, 2012.

        The options are granted at 100% of the fair market value of the common stock on the date of grant and have a five-year term. All grants are made under shareholder approved plans that currently exist, such as the 2006 Equity Incentive Plan.

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SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE

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

        To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, during the fiscal year ended April 30, 2012, all Section 16(a) filing requirements were complied with, with the exception of Todd Simpson, our former Chief Executive Office, who failed to file a Form 4 with respect to the extension of exercisability of four option grants, which extensions were subsequently reported on a Form 5. We did not receive any representations or reports from greater than ten percent beneficial owners.

CERTAIN RELATIONSHIPS AND RELATED PARTY
TRANSACTIONS

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

POLICIES AND PROCEDURES FOR REVIEW OF
RELATED PARTY TRANSACTIONS

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

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

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

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

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HOUSEHOLDING OF PROXY MATERIALS

        The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as "householding," potentially means extra convenience for stockholders and cost savings for companies.

        This year, a number of brokers with account holders who are Ditech stockholders will be "householding" our proxy materials. A single proxy statement will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be "householding" communications to your address, "householding" will continue until you are notified otherwise or until you revoke your consent.

        If, at any time, you no longer wish to participate in "householding" and would prefer to receive a separate proxy statement and annual report, please notify your broker, direct your written request to Investor Relations Department, Ditech Networks, Inc., 3099 North First Street, San Jose, CA 95134 or contact Bill Tamblyn by telephone at (408) 883-3691 or by email at btamblyn@ditechnetworks.com. Stockholders who currently receive multiple copies of the proxy statement at their address and would like to request "householding" of their communications should contact their broker.

DIRECTIONS TO SPECIAL MEETING
LOCATION

        The Annual Meeting will be held at Ditech Networks executive offices located at 3099 North First Street, San Jose, CA 95134 at 11:00 a.m. Pacific Time on Tuesday, October, 16, 2012. Directions to this location are available at http://materials.proxyvote.com/25500T

OTHER MATTERS

        The Board of Directors knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment.

September     , 2012

         A copy of our Annual Report to the Securities and Exchange Commission on Form 10-K for the fiscal year ended April 30, 2012 is available without charge upon written request to Investor Relations Department, Ditech Networks, Inc., 3099 North First Street, San Jose, CA 95134 or by contacting Bill Tamblyn by telephone at (408) 883-3691 or by email at btamblyn@ditechnetworks.com .

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Appendix A

Article IV.A. of the Company's Certificate of Incorporation, as Proposed to be Amended

        "This corporation is authorized to issue two classes of stock to be designated, respectively, "Common Stock" and "Preferred Stock." The total number of shares which the corporation is authorized to issue is Sixty Million (60,000,000) shares. Fifty-Five Million (55,000,000) shares shall be Common Stock, each having a par value of one tenth of one cent ($.001). Five Million (5,000,000) shares shall be Preferred Stock, each having a par value of one tenth of one cent ($.001). Effective as of 5:00 p.m., Eastern time, on the date this Certificate of Amendment is filed with the Secretary of State of the State of Delaware, each [number to be set by the Board between and including three and ten] ([number]) shares of the corporation's Common Stock issued and outstanding shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) share of Common Stock of the corporation; provided, however, that the corporation shall issue no fractional shares as a result of the actions set forth herein but shall instead pay to the holder of such fractional share a sum in cash equal to such fraction multiplied by the closing sales price of the corporation's Common Stock as reported on the Nasdaq Global Market on the last business day before the date this Certificate of Amendment is filed with the Secretary of State of the State of Delaware. The par value of each share of Common Stock will not be adjusted in connection with the foregoing."

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QuickLinks

PROPOSAL 1 ELECTION OF DIRECTORS
PROPOSAL NO. 2
APPROVAL OF AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT OF THE COMPANY'S COMMON STOCK
PROPOSAL 3 RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
EXECUTIVE COMPENSATION AND RELATED INFORMATION
Summary Compensation Table
Outstanding Equity Awards at Fiscal Year-End
Director Compensation
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
POLICIES AND PROCEDURES FOR REVIEW OF RELATED PARTY TRANSACTIONS
HOUSEHOLDING OF PROXY MATERIALS
DIRECTIONS TO SPECIAL MEETING LOCATION
OTHER MATTERS