Ditech Networks, Inc. (Nasdaq:DITC) granted stock options to purchase an aggregate of 36,000 shares of its common stock to four people who were recently hired by Ditech Networks. All of the stock options have a term of ten years, and all of the stock options will vest over four years and were granted as a material inducement for these people to join Ditech Networks. The stock options have an exercise price per share equal to the closing sales price of the common stock on the date of grant. The options were granted pursuant to a plan established by Ditech Networks without stockholder approval in reliance upon the “material inducement” exception to the stockholder approval requirements of the rules of The Nasdaq Stock Market. None of the recipients is an executive officer of Ditech Networks.

About Ditech Networks

Ditech Networks is revolutionizing modern communications with advanced voice processing solutions that perform tasks spanning from voice-enabled Web 2.0 and unified communications services to voice quality enhancement. Ditech believes in the power and simplicity of human speech; its solutions deliver high-quality voice communication and will enable compelling voice capabilities to new communications methods like social networking and text messaging, allowing consumers to use voice in ways that make sense in today’s Web 2.0-savvy world.

Leveraging over 20 years of deployments with communications providers around the world, Ditech’s products help global communications companies meet the multiple challenges of service differentiation, network expansion and call capacity, by delivering consistent, dependable voice quality. Ditech’s customers include Verizon, Sprint/Nextel, Orascom Telecom, AT&T, Telus, Global Crossing and West Corporation. Ditech Networks is headquartered in Mountain View, California.

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