Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On December 30, 2008, Network Engines, Inc. (the "Company") entered into amendments (the "Amendments") which amend, restate and supersede previously executed Executive Retention Agreements (the "Retention Agreements") with the following executive officers of the Company (collectively, the "Executives"):

Mr. Gregory A. Shortell, President, Chief Executive Officer and Director

Mr. Douglas G. Bryant, Chief Financial Officer, Treasurer and Secretary

Mr. Charles N. Cone, III, Senior Vice President of Sales and Marketing

Mr. Richard P. Graber, Senior Vice President of Engineering and Operations

The Amendments were executed to implement certain changes required to comply with Section 409A of the United States Internal Revenue Code of 1986, as amended. The final regulations of Section 409A become effective on January 1, 2009. The Amendments did not change any of the terms of the Retention Agreements with regard to the benefits to be provided to the Executives upon certain events specified within the Retention Agreements. The Retention Agreements are not employment contracts and do not specify any terms or conditions of employment. They provide for certain severance benefits to be provided the Executives in the event their employment is terminated under specified circumstances, including those following a Change in Control of the Company, as defined in the Retention Agreements. The Amendments take effect on December 30, 2008. The Retention Agreements expire on the earlier of
(a) December 31, 2010 or (b) the termination of the Executive's employment with the Company prior to the occurrence of a Change in Control; provided that it is subject to automatic one-year extensions unless prior notice of termination is given by the Company.

The foregoing description is subject to, and qualified in its entirety by, the Amendments filed as exhibits hereto and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

99.1 Amended and Restated Executive Retention Agreement with Mr. Gregory
A. Shortell
99.2 Amended and Restated Executive Retention Agreement with Mr. Douglas G. Bryant
99.3 Amended and Restated Executive Retention Agreement with Mr. Charles N. Cone, III
99.4 Amended and Restated Executive Retention Agreement with Mr. Richard P. Graber

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