EXHIBIT 99.2
NETWORK APPLIANCE, INC
EMPLOYEE STOCK PURCHASE PLAN
AS AMENDED EFFECTIVE JULY 7, 2004
I. PURPOSE OF THE PLAN
This Employee Stock Purchase Plan is intended to promote the interests of
Network Appliance, Inc. by providing eligible employees with the opportunity to
acquire a proprietary interest in the Corporation through participation in a
payroll-deduction based employee stock purchase plan designed to qualify under
Section 423 of the Code.
Capitalized terms herein shall have the meanings assigned to such terms
in the attached Appendix.
Certain provisions of the Plan as restated August 2001 (the "2001
Restatement") became effective with the offering period commencing December 3,
2001 and did not have any force or effect prior to such date.
All share numbers in this document reflect (i) the two-for-one split of
the Common Stock effected on December 19, 1997, (ii) the two-for-one split of
the Common Stock effected on December 22, 1998, (iii) the two-for-one split of
the Common Stock effected on December 21, 1999, and (iv) the two-for-one split
of the Common Stock effected on March 23, 2000.
II. ADMINISTRATION OF THE PLAN
The Plan Administrator shall have full authority to interpret and
construe any provision of the Plan and to adopt such rules and regulations for
administering the Plan as it may deem necessary in order to comply with the
requirements of Code Section 423. Decisions of the Plan Administrator shall be
final and binding on all parties having an interest in the Plan.
III. STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock, including shares of Common Stock purchased
on the open market. The maximum number of shares of Common Stock which may be
issued over the term of the Plan shall not exceed Fifteen Million Nine Hundred
Thousand (15,900,000) shares, including (i) an increase of One Million Six
Hundred Thousand (1,600,000) shares authorized by the Board on August 11, 1998
and approved by the shareholders on October 8, 1998, (ii) an increase of One
Million (1,000,000) shares authorized by the Board on August 17, 1999 and
approved by the shareholders on October 26, 1999, (iii) an increase of Three
Million (3,000,000) shares authorized by the Board on August 9, 2001 and
approved by the shareholders at the 2001 Annual Meeting held on October 18,
2001, (iv) an increase of Two Million Four Hundred Thousand (2,400,000) shares
authorized by the Board on July 2, 2002, and approved by the shareholders at the
2002 Annual Meeting held on August 29, 2002, (v) an increase of One Million
(1,000,000) shares authorized by the Board on June 12, 2003 and approved by
shareholders at the 2003 Annual Meeting held on September 2, 2003, plus (vi) an
increase of One Million Three Hundred Thousand (1,300,000) shares authorized by
the Board on July 7, 2004 and approved by the shareholders at the 2004 Annual
Meeting held on September 2, 2004.
B. Should any change be made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration, appropriate adjustments shall be
made to (i) the maximum number and class of securities issuable under the Plan,
(ii) the maximum number and class of securities purchasable per Participant on
any one Purchase Date, (iii) the maximum number and class of securities
purchasable in total by all Participants on any one Purchase Date under the Plan
and (iv) the number
and class of securities and the price per share in effect under each outstanding
purchase right in order to prevent the dilution or enlargement of benefits
thereunder.
IV.OFFERING PERIODS
A. Shares of Common Stock shall be offered for purchase under the Plan
through a series of overlapping offering periods until such time as (i) the
maximum number of shares of Common Stock available for issuance under the Plan
shall have been purchased or (ii) the Plan shall have been sooner terminated.
B. Each offering period shall be of such duration (not to exceed
twenty-four (24) months) as determined by the Plan Administrator prior to the
start date of such offering period. Offering periods shall commence at
semi-annual intervals on the first business day of June and December each year
over the remaining term of the Plan. Accordingly, two (2) separate offering
periods shall commence in each calendar year the 2001 Restatement remains in
existence. However, the initial offering period under the 2001 Restatement shall
begin on the first business day in December 2001 and end on the last business
day in November 2003.
NOTE: Prior to December 3, 2001, shares of Common Stock were offered for
purchase under the Plan through a series of successive offering periods, each
with a maximum duration of twenty-four (24) months. The last such offering
period began on the first business day in December 1999 and terminated on
November 30, 2001.
C. Each offering period shall be comprised of a series of one or more
successive Purchase Intervals. Purchase Intervals shall run from the first
business day in June each year to the last business day in November of the same
year and from the first business day in December each year to the last business
day in May of the following year.
D. Should the Fair Market Value per share of Common Stock on any Purchase
Date within any offering period beginning on or after December 3, 2001 be less
than the Fair Market Value per share of Common Stock on the start date of that
offering period, then the individuals participating in such offering period
shall, immediately after the purchase of shares of Common Stock on their behalf
on such Purchase Date, be transferred from that offering period and
automatically enrolled in the next offering period commencing after such
Purchase Date.
V.ELIGIBILITY
A. Each individual who is an Eligible Employee on the start date of any
offering period under the Plan may enter that offering period on such start
date. However, an Eligible Employee may participate in only one offering period
at a time.
B. Except as otherwise provided in Section IV.D, an Eligible Employee
must, in order to participate in the Plan for a particular offering period,
complete the enrollment forms prescribed by the Plan Administrator (including a
stock purchase agreement and a payroll deduction authorization form) and file
such forms with the Plan Administrator (or its designate) on or before the start
date of that offering period.
VI.PAYROLL DEDUCTIONS
A. The payroll deduction authorized by the Participant for purposes of
acquiring shares of Common Stock during an offering period may be any multiple
of one percent (1%) of the Cash Earnings paid to the Participant during each
Purchase Interval within that offering period, up to a maximum of ten percent
(10%). The deduction rate so authorized by a Participant shall continue in
effect throughout the offering period, except to the extent such rate is changed
in accordance with the following guidelines:
(i) The Participant may, at any time during the offering period,
reduce his or her rate of payroll deduction to become effective as soon as
possible after filing the appropriate form with the Plan Administrator.
The Participant may not, however, effect more than one (1) such reduction
per Purchase
Interval.
(ii) The Participant may, prior to the commencement of any new
Purchase Interval within the offering period, increase the rate of his or
her payroll deduction by filing the appropriate form with the Plan
Administrator. The new rate (which may not exceed the ten percent (10%)
maximum) shall become effective as of the start date of the first Purchase
Interval following the filing of such form.
B. Payroll deductions on behalf of the Participant shall begin on the
first pay day following the start date of the offering period in which he or she
is enrolled and shall (unless sooner terminated by the Participant) continue
through the pay day ending with or immediately prior to the last day of that
offering period. The amounts so collected shall be credited to the Participant's
book account under the Plan, but no interest shall be paid on the balance from
time to time outstanding in such account. The amounts collected from the
Participant shall not be held in any segregated account or trust fund and may be
commingled with the general assets of the Corporation and used for general
corporate purposes.
C. Payroll deductions shall automatically cease upon the Participant's
withdrawal from the offering period or the termination of his or her purchase
right in accordance with the provisions of the Plan.
D. The Participant's acquisition of Common Stock under the Plan on any
Purchase Date shall neither limit nor require the Participant's acquisition of
Common Stock on any subsequent Purchase Date, whether within the same or a
different offering period.
E. The Plan Administrator shall have the discretion, exercisable prior to
the start date of any offering period under the Plan, to determine whether the
payroll deductions authorized by Participants during such offering period shall
be calculated as a percentage of Base Salary or Cash Earnings.
VII. PURCHASE RIGHTS
A. GRANT OF PURCHASE RIGHT. A Participant shall be granted a separate
purchase right for each offering period in which he or she is enrolled. The
purchase right shall be granted on the start date of the offering period and
shall provide the Participant with the right to purchase shares of Common Stock,
in a series of successive installments during that offering period, upon the
terms set forth below. The Participant shall execute a stock purchase agreement
embodying such terms and such other provisions (not inconsistent with the Plan)
as the Plan Administrator may deem advisable.
Under no circumstances shall purchase rights be granted under the Plan to
any Eligible Employee if such individual would, immediately after the grant, own
(within the meaning of Code Section 424(d)) or hold outstanding options or other
rights to purchase, stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Corporation or any
Corporate Affiliate.
B. EXERCISE OF THE PURCHASE RIGHT. Each purchase right shall be
automatically exercised in installments on each successive Purchase Date within
the offering period, and shares of Common Stock shall accordingly be purchased
on behalf of each Participant on each such Purchase Date. The purchase shall be
affected by applying the Participant's payroll deductions for the Purchase
Interval ending on such Purchase Date to the purchase of whole shares of Common
Stock at the purchase price in effect for the Participant for that Purchase
Date.
C. PURCHASE PRICE. The purchase price per share at which Common Stock
will be purchased on the Participant's behalf on each Purchase Date within the
particular offering period in which he or she is enrolled shall be equal to
eighty-five percent (85%) of the lower of (i) the Fair Market Value per share of
Common Stock on the start date of that offering period or (ii) the Fair Market
Value per share of Common Stock on that Purchase Date.
D. NUMBER OF PURCHASABLE SHARES. The number of shares of Common Stock
purchasable by a Participant on each Purchase Date during the particular
offering period in which he or she is enrolled shall be the number of whole
shares obtained by dividing the amount collected from the Participant through
payroll deductions during the Purchase Interval ending with that Purchase Date
by the purchase price in effect for the
Participant for that Purchase Date. However, the maximum number of shares of
Common Stock purchasable per Participant on any one Purchase Date shall not
exceed One Thousand Five Hundred (1,500) shares, subject to periodic adjustments
in the event of certain changes in the Corporation's capitalization. The maximum
number of shares of Common Stock purchasable in total by all participants on any
one Purchase Date shall not exceed One Million (1,000,000) shares, subject to
periodic adjustments in the event of certain changes in the Corporation's
capitalization. However, the Plan Administrator shall have the discretionary
authority, exercisable prior to the start of any offering period under the Plan,
to increase or decrease the limitations to be in effect for the number of shares
purchasable per Participant and in total by all Participants enrolled in that
particular offering period on each Purchase Date which occurs during that
offering period.
E. EXCESS PAYROLL DEDUCTIONS. Any payroll deductions not applied to the
purchase of shares of Common Stock on any Purchase Date because they are not
sufficient to purchase a whole share of Common Stock shall be held for the
purchase of Common Stock on the next Purchase Date. However, any payroll
deductions not applied to the purchase of Common Stock by reason of the
limitation on the maximum number of shares purchasable per Participant or in
total by all Participants on the Purchase Date shall be promptly refunded.
F. SUSPENSION OF PAYROLL DEDUCTIONS. In the event that a Participant is,
by reason of the accrual limitations in Article VIII, precluded from purchasing
additional shares of Common Stock on one or more Purchase Dates during the
offering period in which he or she is enrolled, then no further payroll
deductions shall be collected from such Participant with respect to those
Purchase Dates. The suspension of such deductions shall not terminate the
Participant's purchase right for the offering period in which he or she is
enrolled, and payroll deductions shall automatically resume on behalf of such
Participant once he or she is again able to purchase shares during that offering
period in compliance with the accrual limitations of Article VIII.
G. WITHDRAWAL FROM OFFERING PERIOD. The following provisions shall govern
the Participant's withdrawal from an offering period under the Plan:
(i) A Participant may withdraw from the offering period in which he
or she is enrolled by filing the appropriate form with the Plan
Administrator (or its designate) at any time prior to the next scheduled
Purchase Date in the offering period, and no further payroll deductions
shall be collected from the Participant with respect to that offering
period. Any payroll deductions collected during the Purchase Interval in
which such withdrawal occurs shall, at the Participant's election, be
immediately refunded or held for the purchase of shares on the next
Purchase Date. If no such election is made at the time the Participant
withdraws from the offering period, then the payroll deductions collected
with respect to the Purchase Interval in which such withdrawal occurs
shall be refunded as soon as possible.
(ii) The Participant's withdrawal from the offering period shall be
irrevocable, and the Participant may not subsequently rejoin that offering
period. In order to resume participation in any subsequent offering
period, such individual must re-enroll in the Plan (by making a timely
filing of the prescribed enrollment forms) on or before the start date of
that offering period.
H. TERMINATION OF ELIGIBLE EMPLOYEE STATUS. Should the Participant cease
to remain an Eligible Employee for any reason (including death, disability or
change in status) while his or her purchase right remains outstanding, then that
purchase right shall immediately terminate, and all of the Participant's payroll
deductions for the Purchase Interval in which the purchase right so terminates
shall be immediately refunded. However, should the Participant cease to remain
in active service by reason of an approved unpaid leave of absence, then the
Participant shall have the right, exercisable up until the last business day of
the Purchase Interval in which such leave commences, to (a) withdraw all the
payroll deductions collected to date on his or her behalf for that Purchase
Interval or (b) have such funds held for the purchase of shares on his or her
behalf on the next scheduled Purchase Date. In no event, however, shall any
further payroll deductions be collected on the Participant's behalf during such
leave. Upon the Participant's return to active service (i) within ninety (90)
days following the commencement of such leave or (ii) prior to the expiration of
any longer period for which such Participant's right to reemployment with the
Corporation is guaranteed by either statute or contract, his or her payroll
deductions under the Plan shall automatically resume at the rate in effect at
the time the leave began, unless the Participant withdraws from the Plan prior
to his or her return. An individual who returns to active employment following a
leave of absence which exceeds in duration the applicable time period shall be
treated
as a new Employee for purposes of subsequent participation in the Plan and must
accordingly re-enroll in the Plan (by making a timely filing of the prescribed
enrollment forms) on or before the start date of any offering period in which he
or she wishes to participate.
I. CHANGE IN CONTROL. Each outstanding purchase right shall automatically
be exercised, immediately prior to the effective date of any Change in Control,
by applying the payroll deductions of each Participant for the Purchase Interval
in which such Change in Control occurs to the purchase of whole shares of Common
Stock at a purchase price per share equal to eighty-five percent (85%) of the
lower of (i) the Fair Market Value per share of Common Stock on the start date
of the offering period in which the Participant is enrolled at the time of such
Change in Control or (ii) the Fair Market Value per share of Common Stock
immediately prior to the effective date of such Change in Control. However, the
applicable limitation on the number of shares of Common Stock purchasable per
Participant shall continue to apply to any such purchase, but not the limitation
applicable to the maximum number of shares of Common Stock purchasable in total
by all Participants on any one Purchase Date.
The Corporation shall use its best efforts to provide at least ten (10)
days prior written notice of the occurrence of any Change in Control, and
Participants shall, following the receipt of such notice, have the right to
terminate their outstanding purchase rights prior to the effective date of the
Change in Control.
J. PRORATION OF PURCHASE RIGHTS. Should the total number of shares of
Common Stock to be purchased pursuant to outstanding purchase rights on any
particular date exceed either (i) the maximum limitation on the number of shares
purchasable in total by all Participants on such date or (ii) the number of
shares then available for issuance under the Plan, the Plan Administrator shall
make a pro-rata allocation of the available shares on a uniform and
nondiscriminatory basis, and the payroll deductions of each Participant, to the
extent in excess of the aggregate purchase price payable for the Common Stock
pro-rated to such individual, shall be refunded.
K. ASSIGNABILITY. The purchase right shall be exercisable only by the
Participant and shall not be assignable or transferable by the Participant.
L. SHAREHOLDER RIGHTS. A Participant shall have no shareholder rights
with respect to the shares subject to his or her outstanding purchase right
until the shares are purchased on the Participant's behalf in accordance with
the provisions of the Plan and the Participant has become a holder of record of
the purchased shares.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire Common
Stock pursuant to any purchase right outstanding under this Plan if and to the
extent such accrual, when aggregated with (i) rights to purchase Common Stock
accrued under any other purchase right granted under this Plan and (ii) similar
rights accrued under other employee stock purchase plans (within the meaning of
Code Section 423) of the Corporation or any Corporate Affiliate, would otherwise
permit such Participant to purchase more than Twenty-Five Thousand Dollars
($25,000) worth of stock of the Corporation or any Corporate Affiliate
(determined on the basis of the Fair Market Value per share on the date or dates
such rights are granted) for each calendar year such rights are at any time
outstanding.
B. For purposes of applying such accrual limitations to the purchase
rights granted under the Plan, the following provisions shall be in effect:
(i) The right to acquire Common Stock under each outstanding
purchase right shall accrue in a series of installments on each successive
Purchase Date during the offering period in which such right remains
outstanding.
(ii) No right to acquire Common Stock under any outstanding purchase
right shall accrue to the extent the Participant has already accrued in
the same calendar year the right to acquire Common Stock under one (1) or
more other purchase rights at a rate equal to Twenty-Five Thousand Dollars
($25,000) worth of Common Stock (determined on the basis of the Fair
Market Value per share on the date or dates of grant)
for each calendar year such rights were at any time outstanding.
C. If by reason of such accrual limitations, any purchase right of a
Participant does not accrue for a particular Purchase Interval, then the payroll
deductions which the Participant made during that Purchase Interval with respect
to such purchase right shall be promptly refunded.
D. In the event there is any conflict between the provisions of this
Article and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article shall be controlling.
IX. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan was adopted by the Board on September 26, 1995 and was
subsequently approved by the shareholders and became effective at the Effective
Time.
B. The Plan was amended by the Board on August 11, 1998 (the "1998
Amendment") to increase the maximum number of shares of Common Stock authorized
for issuance under the Plan by an additional One Million Six Hundred Thousand
(1,600,000) shares. The 1998 Amendment was approved by the shareholders at the
1998 Annual Meeting.
C. On August 17, 1999, the Board amended the Plan to (i) increase the
maximum number of shares of Common Stock authorized for issuance under the Plan
by an additional One Million (1,000,000) shares and (ii) make amendments to
certain administrative provisions of the Plan (the "1999 Amendment"). The 1999
Amendment was approved by the shareholders on October 26, 1999.
D. The 2001 Restatement was adopted by the Board on August 9, 2001 and
effects the following changes to the Plan: (i) increase the number of shares
authorized for issuance under the Plan by an additional three million
(3,000,000) shares, (ii) implement a series of overlapping twenty-four
(24)-month offering periods beginning at semi-annual intervals each year, (iii)
establish a series of semi-annual purchase dates within each such offering
period, (iv) reduce the maximum number of shares of Common Stock purchasable per
Participant on any one Purchase Date after November 30, 2001 from twelve
thousand (12,000) shares to one thousand five hundred (1,500) shares, (v) limit
the number of shares of Common Stock purchasable in total by all Participants on
any one Purchase Date after November 30, 2001 to one million (1,000,000) shares,
(vi) extend the maximum term of the Plan until the last business day in May 2011
and (vii) revise certain provisions of the Plan document in order to facilitate
the administration of the Plan. No purchase rights were exercised under the
Plan, and no shares of Common Stock were issued, on the basis of the
3,000,000-share increase authorized by the 2001 Restatement, until the 2001
Restatement was approved by the shareholders at the 2001 Annual Stockholders
Meeting.
E. The Plan was amended by the Board on July 2, 2002 (the "2002
Restatement") to increase the number of shares authorized for issuance under the
Plan by an additional two million four hundred million (2,400,000) shares. The
2002 Restatement was approved by the shareholders on August 29, 2002.
F. The Plan was amended by the Board on June 12, 2003 (the "2003
Restatement") to increase the number of shares authorized for issuance under the
Plan by an additional one million (1,000,000) shares. The 2003 Restatement was
approved by the shareholders at the 2003 Annual Meeting.
G. The Plan was amended by the Board on July 7, 2004 (the "2004
Restatement") to increase the number of shares authorized for issuance under the
Plan by an additional one million three hundred thousand (1,300,000) shares. The
2004 Restatement was approved by the shareholders at the 2004 Annual Meeting.
F. The Corporation shall comply with all applicable requirements of the
1933 Act (including the registration of such additional shares of Common Stock
issuable under the Plan on a Form S-8 registration statement filed with the
Securities and Exchange Commission), all applicable listing requirements of the
Nasdaq National Market with respect to those shares, and all other applicable
requirements established by law or regulation.
I. Unless sooner terminated by the Board, the Plan shall terminate upon
the earliest of (i) the last business day in May 2011, (ii) the date on which
all shares available for issuance under the Plan shall have been sold pursuant
to purchase rights exercised under the Plan or (iii) the date on which all
purchase rights are exercised in connection with a Change in Control. No further
purchase rights shall be granted or exercised, and no further payroll deductions
shall be collected, under the Plan following such termination.
X. AMENDMENT OF THE PLAN
A. The Board may alter, amend, suspend or discontinue the Plan at any
time to become effective immediately following the close of any Purchase
Interval. However, the Plan may be amended or terminated immediately upon Board
action, if and to the extent necessary to assure that the Corporation will not
recognize, for financial reporting purposes, any compensation expense in
connection with the shares of Common Stock offered for purchase under the Plan,
should the financial accounting rules applicable to the Plan at the Effective
Time be subsequently revised so as to require the recognition of compensation
expense in the absence of such amendment or termination.
B. In no event may the Board effect any of the following amendments or
revisions to the Plan without the approval of the Corporation's shareholders:
(i) increase the number of shares of Common Stock issuable under the Plan,
except for permissible adjustments in the event of certain changes in the
Corporation's capitalization, (ii) alter the purchase price formula so as to
reduce the purchase price payable for the shares of Common Stock purchasable
under the Plan or (iii) modify the requirements for eligibility to participate
in the Plan.
XI. GENERAL PROVISIONS
A. All costs and expenses incurred in the administration of the Plan
shall be paid by the Corporation; however, each Plan Participant shall bear all
costs and expenses incurred by such individual in the sale or other disposition
of any shares purchased under the Plan.
B. Nothing in the Plan shall confer upon the Participant any right to
continue in the employ of the Corporation or any Corporate Affiliate for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Corporation (or any Corporate Affiliate employing such person)
or of the Participant, which rights are hereby expressly reserved by each, to
terminate such person's employment at any time for any reason, with or without
cause.
C. The provisions of the Plan shall be governed by the laws of the State
of California without resort to that State's conflict-of-laws rules.
SCHEDULE A
CORPORATIONS PARTICIPATING IN
EMPLOYEE STOCK PURCHASE PLAN
AS OF JULY 2, 2002
Network Appliance, Inc.
APPENDIX
The following definitions shall be in effect under the Plan:
A. BASE SALARY shall mean the regular base salary paid to a Participant
by one or more Participating Companies during such individual's period of
participation in one or more offering periods under the Plan. Such Base Salary
shall be calculated before deduction of (A) any income or employment tax
withholdings or (B) any pre-tax contributions made by the Participant to any
Code Section 401(k) salary deferral plan or any Code Section 125 cafeteria
benefit program now or hereafter established by the Corporation or any Corporate
Affiliate. The following items of compensation shall NOT be included in Base
Salary: (i) all overtime payments, bonuses, commissions (other than those
functioning as base salary equivalents), profit-sharing distributions and other
incentive-type payments and (ii) any and all contributions (other than Code
Section 401(k) or Code Section 125 contributions) made on the Participant's
behalf by the Corporation or any Corporate Affiliate under any employee benefit
or welfare plan now or hereafter established.
B. BOARD shall mean the Corporation's Board of Directors.
C. CASH EARNINGS shall mean the (i) base salary payable to a Participant
by one or more Participating Companies during such individual's period of
participation in one or more offering periods under the Plan plus (ii) all
overtime payments, bonuses, commissions, current profit-sharing distributions
and other incentive-type payments received during such period. Such Cash
Earnings shall be calculated before deduction of (A) any income or employment
tax withholdings or (B) any pre-tax contributions made by the Participant to any
Code Section 401(k) salary deferral plan or any Code Section 125 cafeteria
benefit program now or hereafter established by the Corporation or any Corporate
Affiliate. However, Cash Earnings shall NOT include any contributions (other
than Code Section 401(k) or Code Section 125 contributions deducted from such
Cash Earnings) made by the Corporation or any Corporate Affiliate on the
Participant's behalf to any employee benefit or welfare plan now or hereafter
established.
D. CHANGE IN CONTROL shall mean a change in ownership or control of the
Corporation effected through any of the following transactions:
(i) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately
prior to such transaction,
(ii) the sale, transfer or other disposition of all or substantially
all of the assets of the Corporation in complete liquidation or
dissolution of the Corporation; or
(iii) the acquisition, directly or indirectly by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation), of beneficial ownership (within the
meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than
fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a tender or exchange
offer made directly to the Corporation's shareholders.
E. CODE shall mean the Internal Revenue Code of 1986, as amended.
F. COMMON STOCK shall mean the Corporation's common stock.
G. CORPORATE AFFILIATE shall mean any parent or subsidiary corporation of
the Corporation (as determined in accordance with Code Section 424), whether now
existing or subsequently established.
H. CORPORATION shall mean Network Appliance, Inc., a Delaware
corporation, and any corporate successor to all or substantially all of the
assets or voting stock of Network Appliance, Inc. which shall by appropriate
action adopt the Plan.
I. EFFECTIVE TIME shall mean the time at which the underwriting agreement
for the Corporation's initial public offering of the Common Stock was executed
and finally priced. Any Corporate Affiliate which becomes a Participating
Corporation after such Effective Time shall designate a subsequent Effective
Time with respect to its employee-Participants.
J. ELIGIBLE EMPLOYEE shall mean any person who is employed by a
Participating Company on a basis under which he or she is regularly expected to
render more than twenty (20) hours of service per week for more than five (5)
months per calendar year for earnings considered wages under Code Section
3401(a).
K. FAIR MARKET VALUE per share of Common Stock on any relevant date shall
be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq National
Market, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question, as such price is reported
by the National Association of Securities Dealers on the Nasdaq National
Market or any successor system and published in The Wall Street Journal.
If there is no closing selling price for the Common Stock on the date in
question, then the Fair Market Value shall be the closing selling price on
the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price
per share of Common Stock on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange and published in The Wall Street Journal. If
there is no closing selling price for the Common Stock on the date in
question, then the Fair Market Value shall be the closing selling price on
the last preceding date for which such quotation exists.
L. 1933 ACT shall mean the Securities Act of 1933, as amended.
M. PARTICIPANT shall mean any Eligible Employee of a Participating
Corporation who is actively participating in the Plan.
N. PARTICIPATING CORPORATION shall mean the Corporation and such
Corporate Affiliate or Affiliates as may be authorized from time to time by the
Board to extend the benefits of the Plan to their Eligible Employees. The
Participating Corporations in the Plan as of July 2, 2002 are listed in attached
Schedule A.
O. PLAN shall mean the Corporation's Employee Stock Purchase Plan, as set
forth in this document.
P. PLAN ADMINISTRATOR shall mean the committee of two (2) or more Board
members appointed by the Board to administer the Plan.
Q. PURCHASE DATE shall mean the last business day of each Purchase
Interval.
R. PURCHASE INTERVAL shall mean each successive six (6)-month period
within the offering period at the end of which there shall be purchased shares
of Common Stock on behalf of each Participant.
S. STOCK EXCHANGE shall mean either the American Stock Exchange or the
New York Stock Exchange.