Audit Committee Report
The information contained in the following Audit Committee Report shall not be deemed to be soliciting material or to be filed with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates it by reference in such filing.
The Audit Committee has reviewed and discussed the Company’s consolidated financial statements with management and Deloitte & Touche LLP, the Company’s independent registered public accounting firm ("Deloitte & Touche"). The Audit Committee has discussed with Deloitte & Touche the matters required to be discussed by the Public Company Accounting Oversight Board ("PCAOB") and the SEC.
The Audit Committee has received and reviewed the written disclosures and the letter from Deloitte & Touche required by the applicable requirements of the PCAOB regarding the independent auditor’s communications with the Audit Committee concerning independence, and has discussed with Deloitte & Touche its independence.
Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the Company’s audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 25, 2025, as filed with the SEC on June 9, 2025.
Submitted by the Audit Committee of the Board of Directors:
Deepak Ahuja, Chair
T. Michael Nevens
Deborah L. Kerr
Anders Gustafsson
Frank Pelzer
Equity Plan Matters
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Proposal 4 |
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Amendment to the Company’s Employee
Stock Purchase Plan |
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Introduction The Company is asking the stockholders to approve an amendment to the Company’s Employee Stock Purchase Plan (the "Purchase Plan") to, among other things, increase the number of shares of common stock of the Company ("shares") authorized for issuance under the Purchase Plan by an additional 4,000,000 shares. The amendment includes a number of other administrative, clarifying and conforming changes. We have included a summary of the material changes below. The amendment was approved by the Board on July 18, 2025, subject to stockholder approval. The requested increase of 4,000,000 shares represents approximately 2.00% of the outstanding shares of the Company’s common stock as of July 16, 2025. A copy of the Purchase Plan, as proposed to be amended, is attached as Appendix A to this Proxy Statement and is incorporated herein by reference. The 4,000,000 shares requested reflects the number of shares we forecast to be necessary to allow for purchases under the Purchase Plan through at least fiscal 2027 based on the historical number of shares purchased under the Purchase Plan in the past three years. Based on the closing price per share of Company common stock of $104.16 on July 16, 2025, the aggregate market value of the 4,000,000 additional shares available for purchases under the Purchase Plan if this proposal is approved would be approximately $416,640,000. As of July 16, 2025, we had 1,188,502 shares remaining available for issuance under the Purchase Plan. A sufficient reserve will ensure that the Purchase Plan continues to provide eligible employees of the Company and its participating affiliates (whether now existing or subsequently established) with the opportunity to purchase shares at semi-annual intervals through their accumulated periodic payroll deductions. |
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Recommendation of the Board |
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Our Board of Directors Unanimously Recommends That Stockholders Vote FOR Proposal No. 4. |
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Generally
The Purchase Plan was adopted by our Board on September 26, 1995 and became effective on November 20, 1995, in connection with the Company’s initial public offering of its common stock.
The terms and provisions of the Purchase Plan, as most recently amended, are summarized below. This summary, however, does not purport to be a complete description of the Purchase Plan. The Purchase Plan is set forth in its entirety and is attached as Appendix A to this Proxy Statement. The following summary is qualified in its entirety by reference to the complete text of the Purchase Plan. Any stockholder may obtain a copy of the actual plan document by making a written request to the Corporate Secretary at the Company’s principal offices in San Jose, California.
In considering its recommendation to amend the Purchase Plan to reserve an additional 4,000,000 shares for issuance, our Board considered the historical number of shares purchased under the Purchase Plan in the past three years. In fiscal 2025, fiscal 2024 and fiscal 2023, the number of shares purchased under the Purchase Plan was 1,731,827 shares, 1,681,576 shares and 2,312,675 shares, respectively. The actual number of shares that will be purchased under the Purchase Plan in any given year will depend on a number of factors, including the number of participants, the participants’ participation rates and our stock price. Based on usage in fiscal 2025, an additional 4,000,000 shares would last for approximately two years. The Board also considered management’s recommendation as to the amount of the increase and its expectation for the number of employees who will participate in the Purchase Plan.
Description of the Purchase Plan
The Purchase Plan is administered by a committee of two or more members of our Board (currently, the Talent and Compensation Committee) (the "Plan Administrator"). As Plan Administrator, such committee has full authority to adopt administrative rules and procedures and to interpret the provisions of the Purchase Plan.
Share Reserve
If Proposal No. 4 is approved, the maximum number of shares reserved for issuance over the term of the Purchase Plan will be 77,700,000 shares. As of July 16, 2025, 72,511,498 shares had been issued under the Purchase Plan, and 1,188,502 shares were available for future issuance. The closing price of our common stock was $104.16 on July 16, 2025.
The shares issuable under the Purchase Plan may be made available from authorized but unissued shares or from shares of common stock reacquired by the Company, including shares purchased on the open market.
In the event that any change is made to the outstanding common stock (whether by reason of any stock split, stock dividend, recapitalization, exchange or combination of shares or other change affecting the outstanding common stock as a class without the Company’s receipt of consideration), appropriate adjustments will be made to (1) the maximum number and class of securities issuable under the Purchase Plan; (2) the maximum number and class of securities purchasable per participant on any one semiannual purchase date; (3) the maximum number and class of shares purchasable in total by all participants on any one purchase date (if applicable); and (4) the number and class of securities subject to each outstanding purchase right and the purchase price per share in effect thereunder. Such adjustments will be designed to preclude any dilution or enlargement of benefits under the Purchase Plan or the outstanding purchase rights thereunder.
Summary of Changes to the Purchase Plan
If approved, the amendment to the Purchase Plan would make, among other things, the following changes to the Purchase Plan:
•Increase in Share Reserve. Subject to capitalization adjustments, as of the Effective Date, a total of 77,700,000 shares will be authorized for awards granted under the Purchase Plan, as amended (which amount includes 4,000,000 additional shares).
•Change in Control. The amendment to the Purchase Plan aligns the definition of Change in Control with the NetApp, Inc. 2021 Equity Incentive Plan.
•Certain Clarifying Changes. The amendment to the Purchase Plan includes certain other clarifying and conforming changes, including with respect to the determination of fair market value.
Offering Period and Purchase Rights
Shares are offered under the Purchase Plan through a series of overlapping offering periods, each not to exceed 24 months in duration. Such offering periods will begin on the first business day of June and on the first business day of December of each year during the term of the Purchase Plan. Accordingly, two separate offering periods will begin in each calendar year the Purchase Plan remains in existence.
Each offering period will consist of a series of one or more successive purchase intervals. Purchase intervals will run from the first business day in June 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 in the immediately succeeding year. Accordingly, shares will be purchased on the last business day in May and November each year with the payroll deductions collected from the participants for the purchase interval ending with each such semiannual purchase date.
If the fair market value per share of common stock on any semiannual purchase date within a particular offering period is less than the fair market value per share of common stock on the start date of that offering period, then the participants in that offering period will automatically be transferred from that offering period after the semiannual purchase of shares on their behalf and enrolled in the new offering period, which begins on the next business day following such purchase date.
Eligibility and Participation
Any individual who is employed on a basis under which he or she is regularly expected to work for more than 20 hours per week for more than five months per calendar year in the employ of the Company or any participating parent or subsidiary corporation (including any corporation which subsequently becomes such at any time during the term of the Purchase Plan), or any lesser number of hours per week and/or number of months in any calendar year established by the Plan Administrator in accordance with applicable law and the provisions of the Purchase Plan, is eligible to participate in the Purchase Plan.
An individual who is an eligible employee on the start date of any offering period may join that offering period, subject to certain enrollment and timing restrictions contained in the Purchase Plan, by properly electing to participate in the offering period pursuant to procedures established by the Plan Administrator in accordance with the terms of the Purchase Plan. However, no employee may participate in more than one offering period at a time.
As of July 16, 2025, approximately 11,800 employees, including our current NEOs, were eligible to participate in the Purchase Plan.
Purchase Price
The purchase price of the shares purchased on behalf of each participant on each semiannual purchase date will not be less than 85% of the lesser of (1) the fair market value per share at the start date of the offering period; or (2) the fair market value per share on the semiannual purchase date.
The fair market value per share on any particular date under the Purchase Plan will be deemed to be equal to the closing selling price per share on such date reported on the Nasdaq Global Select Market. On July 16, 2025, the closing selling price per share of the Company’s common stock on the Nasdaq Global Select Market was $104.16.
Payroll Deductions and Stock Purchases
Each participant may authorize periodic payroll deductions in any multiple of 1% up to a maximum of 10% of their total cash earnings per purchase interval (generally base salary, bonuses, overtime pay, commissions, current profit-sharing distributions and other incentive-type payments) to be applied to the acquisition of shares at semiannual intervals. Accordingly, on each semiannual purchase date (the last business day in May and November each year), the accumulated payroll deductions of each participant will automatically be applied to the purchase of whole shares at the purchase price in effect for the participant for that purchase date. Any payroll deductions not applied to the purchase of shares on the purchase date shall be promptly refunded to the participant after the purchase date.
Special Limitations
The Purchase Plan imposes certain limitations upon a participant’s rights to acquire common stock, including the following limitations:
•Purchase rights granted to a participant may not permit such individual to purchase more than $25,000 worth of shares (valued at the time each purchase right is granted) for each calendar year those purchase rights are outstanding.
•Purchase rights may not be granted to any individual if such individual would, immediately after the grant, own or hold outstanding options or other rights to purchase stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or any of its affiliates.
•No participant may purchase more than 1,500 shares on any one purchase date.
The Plan Administrator will have the discretionary authority to increase, decrease, or implement the per participant and any total participant limitations prior to the start date of any new offering period under the Purchase Plan.
Withdrawal Rights and Termination of Employment
The participant may withdraw from the Purchase Plan at any time on or before the seventh business day prior to the next scheduled purchase date (subject to the Plan Administrator’s authority to designate a different withdrawal date in accordance with the provisions of the Purchase Plan, subject to any laws of the applicable jurisdiction), and upon such timely withdrawal, his or her accumulated payroll deductions will be promptly refunded.
Upon the participant’s cessation of employment or loss of eligible employee status, payroll deductions will automatically cease. Any payroll deductions which the participant may have made for the semiannual period in which such cessation of employment or loss of eligibility occurs will be promptly refunded.
Stockholder Rights
No participant will have any stockholder rights with respect to the shares covered by his or her purchase rights until the shares are actually purchased on the participant’s behalf. No adjustment will be made for dividends, distributions or other rights for which the record date is prior to the date of such purchase.
Assignability
Purchase rights are not assignable or transferable by the participant and may be exercised only by the participant.
Change in Control
In the event a Change in Control (as defined in the Company’s 2021 Equity Incentive Plan) occurs, all outstanding purchase rights will automatically be exercised immediately prior to the effective date of such Change in Control. The purchase price in effect for each participant will be equal to 85% (or such other percentage (which will not be below 85%) the Plan Administrator set for the purchase price per share of the applicable offering period) of the lesser of (1) the fair market value per share on the start date of the offering period in which the participant is enrolled at the time the Change in Control occurs; or (2) the fair market value per share immediately prior to the effective date of such change in control.
Share Proration
Should the total number of shares to be purchased pursuant to outstanding purchase rights on any particular date exceed either (1) the maximum number of shares purchasable in total by all participants on any one purchase date (if applicable); or (2) the number of shares then available for issuance under the Purchase Plan, then the Plan Administrator will make a pro-rata allocation of the available shares on a uniform and nondiscriminatory basis. In such an event, the Plan Administrator will refund the accumulated payroll deductions of each participant, to the extent such deductions are in excess of the purchase price payable for the shares prorated to such individual.
Amendment and Termination
Unless sooner terminated by the Board, the Purchase Plan will terminate upon the earliest of (1) the date on which all shares available for issuance thereunder are sold pursuant to exercised purchase rights; or (2) the date on which all purchase rights are exercised in connection with a change in control.
Our Board may at any time alter, amend, suspend, terminate or discontinue the Purchase Plan and will seek stockholder approval of any changes to the extent necessary to comply with the Internal Revenue Code or other applicable law, regulation or stock exchange rule.
Purchase Plan Benefits
The table below shows, as to the NEOs and specified groups, the number of shares purchased under the Purchase Plan since its inception until July 16, 2025, together with the value of those shares as of the date of purchase.
Participation in the Purchase Plan
Participation in the Purchase Plan is voluntary and dependent on each eligible employee’s election to participate and his or her determination as to the level of payroll deductions. Accordingly, future purchases under the Purchase Plan are not determinable. Non-employee directors are not eligible to participate in the Purchase Plan.
New Plan Benefits
No purchase rights have been granted, and no shares have been issued, on the basis of the share increase that is the subject of this Proposal No. 4. Because benefits under the Purchase Plan will depend on eligible employees’ elections to participate at various future dates, it is not possible to determine the benefits that will be received by executive officers and other employees. Future purchase prices are not determinable because they are based upon fair market value of shares of our common stock at the beginning and end of each applicable option period.
Historical Grant Information
The following table sets forth certain information regarding the aggregate number of shares purchased under the Purchase Plan by certain persons and groups since its inception until July 16, 2025:
Employee Stock Purchase Plan
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Number of |
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Dollar Value |
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Purchased |
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of Purchased |
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Name and Position |
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Shares |
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Shares ($)(1) |
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George Kurian, Chief Executive Officer |
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— |
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$ |
— |
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Wissam Jabre, Executive Vice President and Chief Financial Officer |
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— |
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$ |
— |
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Cesar Cernuda, President |
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2,446 |
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$ |
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78,328 |
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Harvinder S. Bhela, Former Executive Vice President and Chief Product Officer(2) |
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1,406 |
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$ |
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40,900 |
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Elizabeth M. O’Callahan, Executive Vice President, Chief Administrative Officer and Corporate Secretary |
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4,786 |
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$ |
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103,341 |
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Michael J. Berry, Former Executive Vice President and Chief Financial Officer(3) |
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2,395 |
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$ |
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84,257 |
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All current executive officers, as a group 5 persons)(4) |
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7,232 |
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$ |
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222,569 |
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All current directors who are not executive officers, as a group (9 persons) |
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— |
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$ |
— |
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Each nominee for election as a director (8 persons) |
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— |
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$ |
— |
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Each associate of any such directors, executive officers or nominees (0 persons) |
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— |
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$ |
— |
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Each other person who received or is to receive 5 percent of such options, warrants or rights (0 persons) |
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— |
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$ |
— |
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All employees, including current officers who are not executive officers, as a group |
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72,500,465 |
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$ |
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1,210,793,117 |
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(1)Determined based on the fair market value of the shares on date of purchase, minus the purchase price under the Purchase Plan.
(2)Mr. Bhela departed from NetApp on June 20, 2025, following the completion of an orderly transition of his duties.
(3)Mr. Berry transitioned from EVP, Chief Financial Officer to a special advisor position on March 10, 2025, and retired from the Company on May 23, 2025.
(4)Mr. Bhela and Mr. Berry are not included in the group of current executive officers. Mr. Nair, the Company’s current Chief Product Officer, joined NetApp effective July 7, 2025, and therefore is included in the group of current executive officers.
Summary of Certain United States Federal Income Tax Consequences
The following summary is intended only as a general guide to the material U.S. federal income tax consequences of participation in the Purchase Plan. The summary is based on existing U.S. laws and regulations, and there can be no assurance that those laws and regulations will not change in the future. The summary does not purport to be complete and does not discuss the provisions of the income tax laws of any municipality, state or non-U.S. country in which the participant may reside. As a result, tax consequences for any particular participant may vary based on individual circumstances.
The Purchase Plan is intended to be an employee stock purchase plan within the meaning of Section 423 of the Internal Revenue Code. Under an employee stock purchase plan, which so qualifies, no taxable income will be recognized by a participant, and no deductions will be allowable to the Company, upon either the grant or the exercise of the purchase rights. Taxable income will not be recognized until there is a sale or other disposition of the shares acquired under the Purchase Plan or in the event that the participant should die while still owning the purchased shares.
If the participant sells or otherwise disposes of the purchased shares within two years after the start date of the offering period in which such shares were acquired or within one year after the actual purchase date of those shares, then the participant will recognize ordinary income in the year of sale or disposition equal to the amount by which the fair market value of the shares on the purchase date exceeded the purchase price paid for those shares, and the Company will be entitled to an income tax deduction, for the taxable year in which such disposition occurs, equal in amount to such excess. The participant will also recognize capital gain equal to the amount by which the amount realized upon the sale or disposition exceeds the sum of the aggregate purchase price paid for the shares and the ordinary income recognized in connection with their acquisition, or a capital loss equal to the difference between the sale price and the fair market value of the shares on the purchase date if the shares are later sold or otherwise disposed of for less than their fair market value on the purchase date.
If the participant sells or disposes of the purchased shares more than two years after the start date of the offering period in which the shares were acquired and more than one year after the actual semiannual purchase date of those shares, then the participant will recognize ordinary income in the year of sale or disposition equal to the lesser of (1) the amount by which the fair market value of the shares on the sale or disposition date exceeded the purchase price paid for those shares; or (2) 15% of the fair market value of the shares on the start date of that offering period. Any additional gain upon the disposition will be taxed as a long-term capital gain. The Company will not be entitled to an income tax deduction with respect to such disposition. Any further gain or any loss will be taxed as a long-term capital gain or loss.
If the participant still owns the purchased shares at the time of death, the lesser of (1) the amount by which the fair market value of the shares on the date of death exceeds the purchase price; or (2) 15% of the fair market value of the shares on the start date of the offering period in which those shares were acquired will constitute ordinary income in the year of death.
For more information regarding shares of our common stock that may be issued upon the exercise of options, warrants and other rights granted to employees, consultants or members of our Board of Directors under all of our equity compensation plans as of fiscal year end, please see "Equity Compensation Plan Information" beginning on page 104.
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Proposal 5 |
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Amendment to the Company’s 2021 Equity
Incentive Plan |
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Introduction The Board is requesting that our stockholders vote in favor of amending the NetApp, Inc. 2021 Equity Incentive Plan, as amended (the "2021 Plan") to, among other things, increase the number of shares of common stock of the Company available for issuance thereunder by 5,000,000 shares (the 2021 Plan, as amended, the "Amended 2021 Plan"). The 2021 Plan was also amended to make a number of other administrative, clarifying and conforming changes. We have included a summary of the material changes below. The Amended 2021 Plan was approved by the Board on July 18, 2025, subject to stockholder approval. If the Amended 2021 Plan is approved by our stockholders, it will become effective on the day immediately following the Annual Meeting (the "Effective Date"). If the Amended 2021 Plan is approved, the total number of shares authorized for issuance under the Amended 2021 Plan will be 30,715,221 shares. A copy of the 2021 Plan, as proposed to be amended, is attached as Appendix B to this Proxy Statement and is incorporated herein by reference. The 5,000,000 shares requested reflects the number of shares we forecast to be necessary to support our equity compensation program through at least fiscal 2027 based on our recent burn rate history and new hire and annual grant practices. Based on the closing price per share of Company common stock of $104.16 on July 16, 2025, the aggregate market value of the 5,000,000 additional shares available for equity awards under the Amended 2021 Plan if this proposal is approved would be approximately $520,800,000. As of July 16, 2025, we had 9,508,662 shares remaining available for issuance under the 2021 Plan. The 2021 Plan is the Company’s only current plan for granting equity incentive compensation to our employees, directors and consultants, other than the Company’s Employee Stock Purchase Plan, which allows employees to purchase our stock at a discount. |
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Recommendation of the Board |
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Our Board of Directors Unanimously Recommends That Stockholders Vote FOR Proposal No. 5. |
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Key Reasons to Vote for this Proposal
Equity Awards Are Essential to Our Ability to Attract, Motivate and Retain Experienced and Talented Employees, Directors and Consultants
We believe that our future success and ability to create long-term stockholder value depend in large part upon our ability to attract, motivate and retain highly skilled and experienced executives, managerial, professional and technical employees, as well as consultants and directors. In the software industry and the communities that we operate within, equity compensation is a vital element of compensation and is essential to our ability to compete for exceptional talent to deliver distinctive client value, innovation and productivity, while achieving operational excellence that stands out in a highly competitive and fast-paced industry.
Equity Compensation Aligns Employee Incentives with Long-Term Interests of Our Stockholders
Equity awards are important to our human capital management strategy to keep employees focused on how their individual performance drives value for the Company, which in turn provides an opportunity to share in long-term wealth building based on their ownership of our equity. Historically, we have granted equity awards deeply in our organization, believing that a culture of ownership is important to our ability to achieve our short- and long-term business objectives and that our success is dependent on our employees feeling invested in our future. In fiscal 2025, we granted equity awards to 5,927 employees (which represents approximately 50% of our workforce). We believe our equity grant practices support the attraction and retention of our talent, as observed through a voluntary attrition rate that was below market attrition for our industry and a high job offer acceptance rate.
Compensation Program Instills Pay for Performance Culture
Our equity compensation program has historically consisted primarily of PBRSUs and RSUs, as described in more detail in our Compensation Discussion and Analysis above. In fiscal 2025, we granted 0.4 million PBRSUs (assuming target performance) and 3.4 million RSUs. In fiscal 2024, we granted 0.5 million PBRSUs (assuming target performance) and 4.8 million RSUs.
•Historically, a meaningful portion of awards under the 2021 Plan have been in the form of PBRSUs that are eligible to be earned and vest based on our achievement of specified performance goals, such as relative TSR and billings over a three-year performance period under our fiscal 2025 incentive program. PBRSUs both serve as a retention tool and are a critical element of our performance-based compensation program, furthering our pay-for-performance compensation philosophy and incentivizing strong financial results and stockholder returns.
•RSUs primarily serve as a retention tool because they generally require continued service over a specified vesting schedule, typically a four-year period, to fully vest in the award.
•Both types of awards help tie our success as a Company to individual performance and therefore align the interests of our employees and other service providers with those of our stockholders.
In addition to meaningful vesting schedules and performance periods, all forms of equity compensation: (i) granted to executive officers and directors are subject to robust stock ownership guidelines, (ii) granted to NEOs are subject to a post-vest holding period of 12 months and (iii) granted to covered executives and Section 16 officers are subject to a clawback policy.
Summary of Changes to the 2021 Plan
If approved, the Amended 2021 Plan would make, among other things, the following changes to the 2021 Plan:
•Increase in Share Reserve. Subject to capitalization adjustments, as of the Effective Date, a total of 30,715,221 shares will be authorized for awards granted under the Amended 2021 Plan (which amount includes 5,000,000 additional shares).
•Clarify Applicability of Company Policies. The Amended 2021 Plan clarifies that each award may be subject to the terms and conditions of any other policy (and any amendments thereto) adopted by the Company from time to time, which may include any clawback policy.
•Certain Administrative and Other Clarifying Changes. The Amended 2021 Plan includes an updated definition of "Disability" for administrative reasons, clarifies that underwater stock option and stock appreciation rights will be cancelled for no consideration if not assumed or substituted, and contains certain other clarifying and conforming changes.
Our Plan Maintains Several Best Practices
Our Board believes that the Amended 2021 Plan continues to promote stockholder interests and is consistent with principles of good corporate governance, including:
•No Evergreen Share Pool. The Amended 2021 Plan does not include an "evergreen" share pool provision that would increase the number of shares available without stockholder approval.
•Prohibition on Certain Liberal Share Recycling Transactions. Shares used to pay the exercise price of an award, previously issued shares tendered by a participant to satisfy tax liabilities or withholdings related to an award, shares that are withheld by the Company to satisfy the tax liabilities or withholdings related to a stock option, stock appreciation right or restricted stock award, and shares repurchased by the Company using stock option exercise proceeds, are not added back into the Amended 2021 Plan for future grants. With respect to the exercise of stock appreciation rights settled in shares, the gross number of shares covered by the portion of the exercise award, whether or not actually issued, will cease to be available under the Amended 2021 Plan for future grants.
•No Payouts of Dividends or Dividend Equivalents on Unvested Awards. Dividends and dividend equivalents may not be paid before and unless the underlying shares vest or with respect to any shares subject to unexercised stock options or stock appreciation rights.
•No Liberal Change in Control Definition. The Amended 2021 Plan does not include a "liberal" change in control definition.
•No Single-Trigger Change in Control Vesting. Awards do not automatically accelerate upon a change in control under the terms of the Amended 2021 Plan.
•Disclosure of Change in Control Vesting Treatment of Awards. The Amended 2021 Plan discloses the default vesting treatment for awards in connection with a change in control.
•No Repricing without Stockholder Approval. The Amended 2021 Plan does not allow for repricing or exchanges of outstanding awards (including cash buyout of underwater options or stock appreciation rights) without prior stockholder approval, except in connection with certain corporate transactions.
•No Discounted Stock Options or Stock Appreciation Rights. All stock options and stock appreciation rights granted under the Amended 2021 Plan must have an exercise price equal to or greater than the fair market value of Company common stock on the date of grant (other than stock options granted pursuant to a transaction described in, and in a manner consistent with, Code Section 424(a)).
•Prohibition on Payment of Exercise Price with Promissory Notes. The exercise price of a stock option may not be satisfied pursuant to a promissory note.
•Clawback. Any compensation earned or paid under the Amended 2021 Plan is subject to forfeiture, recovery, or other action pursuant to any clawback or recoupment policy that may be adopted by the Company from time to time.
•Post Vest Holding Requirement for Executives. NEOs are subject to a 12-month post-vest holding period requirement.
•No Transferability. Awards generally may not be transferred, except by will or the laws of descent and distribution, unless approved by the Administrator (as defined below), and in no event may any award be transferred for consideration to a third-party financial institution.
Amended 2021 Plan Dilution and Burn Rate Overview
NetApp takes a thoughtful approach to its annual equity granting practices, by considering the Company’s dilution, burn rate and cost profile relative to its direct competitors and industry norms, the estimated share usage needs across new hires, current eligible employees, directors and consultants and the potential impacts of the share repurchase program on helping to offset the dilutive impacts of equity grants.
In determining the number of additional shares (5,000,000 shares) that would be available for grant under the Amended 2021 Plan if this proposal is approved, our Board considered the number of equity awards we granted during the past three fiscal years and our anticipated future needs. As described in the table below, in fiscal 2023, fiscal 2024 and fiscal 2025, we granted equity awards in respect of 7.6 million shares, 5.3 million shares, and 3.8 million shares, respectively, under our equity incentive plans (assuming target performance for awards that were subject to performance-based vesting). These grants and the table below exclude equity incentive plans and awards under those plans related to our acquisitions and purchase rights granted under the Company's Employee Stock Purchase Plan.
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FY 2023 |
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FY 2024 |
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FY 2025 |
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Stock Options(1) |
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(a) Granted |
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— |
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— |
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— |
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(b) Exercised |
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— |
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— |
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— |
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RSUs(2) |
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(c) Granted |
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7,013,013 |
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4,791,536 |
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3,409,580 |
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(d) Vested |
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3,505,183 |
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4,565,271 |
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4,797,693 |
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PBRSUs |
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(e) Granted(3) |
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545,692 |
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517,214 |
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435,254 |
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(f) Earned |
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613,618 |
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473,418 |
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336,462 |
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(g) Increase in diluted shares due to equity awards (a + c + j) |
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8,104,397 |
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5,825,964 |
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4,280,088 |
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(h) Weighted average common shares outstanding |
|
|
216,591,000 |
|
|
|
208,258,000 |
|
|
|
204,224,000 |
|
(i) Burn Rate (a + c + j / h)(4) |
|
|
3.7 |
% |
|
|
2.8 |
% |
|
|
2.1 |
% |
(1)No stock options or SARs were granted.
(2)Reflects units subject to time vesting requirements. No restricted stock awards were granted.
(3)Reflects units that become eligible to vest upon achievement of Company performance goals within specified time periods and satisfaction of time vesting requirements. Includes total target number of shares subject to PBRSUs. If the maximum number of shares subject to PBRSUs were reflected, awards granted in row (e) would be as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2023 |
|
|
FY 2024 |
|
|
FY 2025 |
|
(j) Granted |
|
|
1,091,384 |
|
|
|
1,034,428 |
|
|
|
870,508 |
|
(4)The burn rate calculation excludes awards that were assumed or granted in substitution of acquired company awards or related to acquisition to acquired employees under assumed plan. The burn rate is not adjusted for forfeitures and expirations, which would reduce the burn rate if considered.
Our three-year average burn rate is 2.9%. Burn rate is calculated based on gross 1 to 1 basis.
The 5,000,000 share increase requested to be approved by stockholders represents 2.5% of our total common shares outstanding as of July 16, 2025. Dilution is the total number of shares subject to equity awards granted (less cancellations) for all equity incentive plans, including plans related to our acquisitions but excluding purchase rights granted under the Company's Employee Stock Purchase Plan, divided by the total common shares outstanding at the end of the fiscal year. Dilution for fiscal 2023, fiscal 2024 and fiscal 2025 was 3.0%, 2.2% and 1.5%, respectively. The average annual dilution over the last three fiscal years was 2.2%.
An additional metric that we use to measure the cumulative impact of the 2021 Plan is overhang. Overhang is the number of shares subject to equity awards (for all equity incentive plans, including plans related to our acquisitions, but excluding purchase rights granted under the Company's Employee Stock Purchase Plan) outstanding but not exercised, assuming maximum performance, plus number of shares available to be granted, divided by total common shares outstanding at the end of the fiscal year. Overhang for fiscal 2023, fiscal 2024 and fiscal 2025 was 6.9%, 10.8% and 10.5%, respectively. The average overhang over the last three fiscal years was 9.4%. If this Proposal No. 5 is approved, our overhang would increase to 13.0%.
Based on our historical practices and anticipated future growth at the time the Amended 2021 Plan was approved by our Talent and Compensation Committee and our Board, we believe that the shares that would be available under the Amended 2021 Plan if this Proposal No. 5 is approved would position us to make our broad based annual equity compensation awards to new and existing employees, directors and consultants at market competitive rates through at least the fiscal 2027 grant cycles. The actual rate at which we use shares under the Amended 2021 Plan may be more or less than our anticipated future usage and will depend upon various unknown factors, such as hiring and promotion activity, participation levels, long-term incentive award mix and vehicles, forfeiture rates and future performance of our stock price. The share increase requested as part of this Proposal No. 5 is important to helping us attract and retain talent, and to continue our historical practice of granting equity awards deeply in our organization with a significant number of performance awards. We intend to continue to monitor share usage, such as burn rate and related metrics, to ensure that we are continuing to take a disciplined approach to equity compensation.
Based on the closing price per share of Company common stock of $104.16 on July 16, 2025, the aggregate market value of the 5,000,000 additional shares available for equity awards under the Amended 2021 Plan if this proposal is approved would be approximately $520,800,000.
Current Awards Outstanding
Set forth below is information regarding shares currently outstanding under the Company’s equity compensation plans (other than the Company's Employee Stock Purchase Plan), including the 1999 Plan, 2021 Plan and equity compensation plans assumed by the Company in connection with mergers and acquisitions, as of July 16, 2025.
|
|
|
|
|
|
Selected Data as of July 16, 2025 |
|
|
|
|
Number of shares subject to outstanding awards under the Company’s equity compensation plans, including equity compensation plans assumed by the Company in connection with mergers and acquisitions(1) |
|
|
|
10,466,042 |
|
Number of shares subject to outstanding options |
|
|
|
7,494 |
|
Weighted average exercise price of outstanding options |
|
$ |
|
18.7480 |
|
Weighted average remaining term of outstanding options (in years) |
|
|
|
3.26 |
|
Number of shares subject to outstanding RSUs |
|
|
|
8,433,598 |
|
Number of shares subject to outstanding PBRSUs (assuming maximum performance) |
|
|
|
2,024,950 |
|
Shares remaining for grant under the 2021 Plan (before Proposal No. 5 is approved) |
|
|
|
9,508,662 |
|
Shares remaining for grant under the 2021 Plan (assuming this Proposal No. 5 is approved) |
|
|
|
14,508,662 |
|
Shares remaining for grant under all other equity compensation plans |
|
|
— |
|
(1)Does not include shares reserved for issuance under the Company’s Employee Stock Purchase Plan.
Description of the Plan
The following paragraphs provide a summary of the principal features of the Amended 2021 Plan and its operation. The following summary is qualified in its entirety by reference to the complete text of the Amended 2021 Plan, attached as Appendix B to this Proxy Statement.
General
The purposes of the Amended 2021 Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees, directors and consultants who perform services to the Company, and to promote the success of the Company’s business. These incentives are provided through the grant of stock options, stock appreciation rights, restricted stock, RSUs or performance awards.
Authorized Shares
Subject to the adjustment provisions contained in the Amended 2021 Plan, the maximum aggregate number of shares that may be subject to awards and issued under the Amended 2021 Plan is 30,715,221 shares, which includes 5,000,000 additional shares. In addition, shares may become available for issuance under the Amended 2021 Plan pursuant to the next paragraph. The shares may be authorized but unissued, or reacquired shares.
If an award granted under the Amended 2021 Plan expires or becomes unexercisable without having been exercised in full, or, with respect to restricted stock, RSUs or performance awards, is forfeited to or repurchased by the Company due to failure to vest, then the unpurchased or forfeited or repurchased shares subject to such award will become available for future grant or sale under the Amended 2021 Plan (unless the Amended 2021 Plan has terminated). With respect to the exercise of stock appreciation rights settled in shares, the gross number of shares covered by the portion of the exercised award, whether or not actually issued pursuant to such exercise, will cease to be available under the Amended 2021 Plan. If shares issued pursuant to restricted stock, RSUs or performance awards are forfeited to or repurchased by the Company due to failure to vest, such shares will become available for future grant under the Amended 2021 Plan. Shares used to pay the exercise price of an award, shares repurchased by the Company using option exercise proceeds, and previously issued shares tendered by a participant to satisfy tax liabilities or withholdings related to an award will not become available for future grant or sale under the Amended 2021 Plan. Shares used to satisfy the tax liabilities or withholdings related to an award other than a stock option, stock appreciation right or restricted stock award will become available for future grant or sale under the Amended 2021 Plan. Payment of cash rather than shares pursuant to an award will not result in reducing the number of shares available for issuance under the Amended 2021 Plan.
Adjustments to Shares Subject to the Amended 2021 Plan
In the event of any dividend or other distribution (whether in the form of cash, shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, reclassification, repurchase, or exchange of shares or other securities of the Company, or other change in the corporate structure affecting the Company’s shares occurs (other than any ordinary dividends or other ordinary distributions), the Administrator (as defined below), in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Amended 2021 Plan, will adjust the number and class of shares of stock that may be delivered under the Amended 2021 Plan, the number, class and price of shares of stock subject to outstanding awards, and the numerical share and dollar limits in the Amended 2021 Plan.
Administration
The Amended 2021 Plan will be administered by the Board, any committee of the Board, or a committee of directors or of other individuals satisfying applicable laws appointed by the Board in accordance with the terms of the Amended 2021 Plan (the "Administrator"). In the case of transactions, including grants to certain officers and key employees of the Company, intended to qualify, as exempt under Rule 16b-3 of the Exchange act, the members of the committee must qualify as "non-employee directors" under Rule 16b-3 of the Exchange Act. (For purposes of this summary of the Amended 2021 Plan, the term "Administrator" will refer to the Board or any committee designated by the Board to administer the Amended 2021 Plan.)
Subject to the terms of the Amended 2021 Plan, the Administrator has the authority to interpret and administer the Amended 2021 Plan, including but not limited to, the authority, in its discretion, to select the employees, consultants, and directors who will receive awards on the
basis of their service, to determine the terms and conditions of awards, to modify or amend each award (subject to the restrictions of the Amended 2021 Plan), including to accelerate vesting or waive forfeiture restrictions, to extend the post-termination exercise period applicable to an award, and to interpret the provisions of the Amended 2021 Plan and outstanding awards. The Administrator may allow a participant to defer the receipt of payment of cash or delivery of shares that otherwise would be due to such participant. The Administrator may make rules and regulations relating to sub-plans established for the purpose of satisfying applicable non-U.S. laws and may make all other determinations deemed necessary or advisable for administering the Amended 2021 Plan. The Administrator may temporarily suspend the exercisability of an award if the Administrator deems such suspension to be necessary or appropriate for administrative purposes or to comply with applicable laws, provided that such suspension must be lifted prior to the expiration of the maximum term and post-termination exercisability period of an award. The Administrator cannot institute an award exchange program under which outstanding awards are surrendered or cancelled in exchange for awards of the same type, awards of a different type or cash, participants would have the opportunity to transfer any outstanding awards to a financial institution or other person or entity selected by the Administrator, or the exercise price of an outstanding award is reduced or increased.
Eligibility
Awards may be granted to employees, directors and consultants of the Company and employees and consultants of any parent or subsidiary corporation of the Company. Incentive stock options may be granted only to employees who, as of the time of grant, are employees of the Company or any parent or subsidiary corporation of the Company. As of July 16, 2025, approximately 11,800 employees, 10 directors and 1 consultant were eligible to participate in the Amended 2021 Plan.
Stock Options
Each option granted under the Amended 2021 Plan will be evidenced by a written or electronic agreement between the Company and a participant specifying the number of shares subject to the stock option and the other terms and conditions of the stock option, consistent with the requirements of the Amended 2021 Plan.
The exercise price per share of each option may not be less than the fair market value of a share of the Company’s common stock on the date of grant. However, an exception may be made for any options that are granted in substitution for options held by employees of companies that the Company acquires in a manner consistent with Section 424(a) of the U.S. Internal Revenue Code of 1986, as amended (the "Code"). In addition, any incentive stock option granted to an employee who, at the time of grant, owns stock representing more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company (a "Ten Percent Stockholder") must have an exercise price per share equal to at least 110% of the fair market value of a share on the date of grant. The aggregate fair market value of the shares (determined on the grant date) covered by incentive stock options which first become exercisable by any participant during any calendar year also may not exceed $100,000. Generally, the fair market value of the common stock is the closing price of our stock on any established stock exchange or national market system on the applicable date.
The Amended 2021 Plan provides that the Administrator will determine the acceptable form(s) of consideration for exercising an option. A stock option will be deemed exercised when the Company receives the notice of exercise and full payment for the shares to be exercised, together with any applicable tax withholdings.
Options will be exercisable at such times or under such conditions as determined by the Administrator and set forth in the award agreement. The maximum term of a stock option will be specified in the award agreement, provided that the term of any option will be no more than seven (7) years, and provided further that an incentive stock option granted to a Ten Percent Stockholder must have a term not exceeding five (5) years.
The Administrator will determine and specify in each award agreement, and solely in its discretion, the period of exercise applicable to each option following a service provider’s cessation of service. In the absence of such a determination by the Administrator, the participant generally will be able to exercise their option for (i) three (3) months following their cessation of service for reasons other than death or disability, and (ii) twelve (12) months following their cessation of service due to disability or following their death while holding the option. An award agreement may provide for an extension of a post-service exercise period upon a cessation of service for reasons other than death or disability if the exercise of the stock option following such cessation of service would result in liability under Section 16(b) of the Exchange Act or would violate the registration requirements under the Securities Act.
Stock Appreciation Rights
A stock appreciation right gives a participant the right to receive the appreciation in the fair market value of Company common stock between the date of grant of the award and the date of its exercise. Each stock appreciation right granted under the Amended 2021 Plan will be evidenced by a written or electronic agreement between the Company and the participant specifying the exercise price and the other terms and conditions of the award, consistent with the requirements of the Amended 2021 Plan.
The exercise price per share of each stock appreciation right may not be less than the fair market value of a share on the date of grant. Upon exercise of a stock appreciation right, the holder of the award will be entitled to receive an amount determined by multiplying (i) the difference between the fair market value of a share on the date of exercise over the exercise price by (ii) the number of exercised shares. The Company may pay the appreciation in cash, in shares, or in some combination thereof. The term of a stock appreciation right will be set forth in the award agreement but may not exceed seven (7) years. The terms and conditions relating to the period of exercise following a cessation of service with respect to options described above also apply to stock appreciation rights.
Restricted Stock Awards
Awards of restricted stock are rights to acquire or purchase shares, which vest in accordance with the terms and conditions established by the Administrator in its sole discretion. Each restricted stock award granted will be evidenced by a written or electronic agreement between the Company and the participant specifying the number of shares subject to the award and the other terms and conditions of the award, consistent with the requirements of the Amended 2021 Plan. Restricted stock awards may be subject to vesting conditions (if any) as the Administrator specifies, and the shares acquired may not be transferred by the participant until vested. The Administrator, in its sole discretion, may determine that an award of restricted stock will not be subject to any vesting conditions.
Unless otherwise provided by the Administrator, a participant will forfeit any shares of restricted stock as to which the restrictions have not lapsed prior to the participant’s cessation of service. Unless the Administrator provides otherwise, and subject to the general rules in the Amended 2021 Plan related to dividends (described below), participants holding restricted stock will have the right to vote the shares and to receive any dividends paid, except that dividends or other distributions paid in shares will be subject to the same restrictions on transferability and forfeitability as the underlying shares and dividends or other distributions payable with respect to shares subject to awards will not be paid before and unless the underlying shares vest. The Administrator may, in its sole discretion, reduce or waive any restrictions and may accelerate the time at which any restrictions will lapse or be removed.
RSUs
The Administrator may grant RSUs which represent a right to receive shares at a future date as set forth in the participant’s award agreement. Each RSU granted under the Amended 2021 Plan will be evidenced by a written or electronic agreement between the Company and the participant specifying the number of shares subject to the award and other terms and conditions of the award, consistent with the requirements of the Amended 2021 Plan.
RSUs will result in a payment to a participant only if the performance goals or other vesting criteria the Administrator may establish are achieved or the awards otherwise vest. The Administrator may set vesting criteria based upon the achievement of Company-wide, divisional, business unit or individual goals (including, but not limited to, continued employment or service), applicable federal or state securities laws, or any other basis determined by the Administrator in its discretion, which, depending on the extent to which they are met, will determine the number of RSUs to be paid out to participants.
After the grant of a RSU award, the Administrator, in its sole discretion, may modify or waive any vesting criteria that must be met to receive a payout. A participant will forfeit any unearned RSUs as of the date set forth in the award agreement. The Administrator in its sole discretion may settle earned RSUs in cash, shares, or a combination of cash and shares.
Performance Awards
Performance awards may also be granted under the Amended 2021 Plan. Performance awards will result in a payment to a participant only if the performance goals or other vesting criteria the Administrator may establish are achieved or the awards otherwise vest in accordance with the terms and conditions applicable to such performance award. Each award of performance awards granted under the Amended 2021 Plan will be evidenced by a written or electronic agreement between the Company and the participant specifying the performance period and other terms and conditions of the award, consistent with the requirements of the Amended 2021 Plan. Earned performance awards will be settled, in the sole discretion of the Administrator, in the form of cash, shares, or in a combination thereof. The Administrator may set vesting criteria based upon the achievement of Company-wide, divisional, business unit or individuals goals (including, but not limited to, continued employment or service), applicable federal or state securities laws, or any other basis determined by the Administrator in its discretion.
After the grant of a performance award, the Administrator, in its sole discretion, may reduce or waive any performance objectives or other vesting provisions for such performance awards. A participant will forfeit any performance awards that are unearned or unvested as of the date set forth in the award agreement.
Dividend Equivalents
The Administrator, in its discretion, may provide in an award agreement that the participant will be entitled to receive dividend equivalents with respect to the payment of cash dividends on shares having a record date prior to the date on which the awards are settled or forfeited. Subject to the limitations in the Amended 2021 Plan, the dividend equivalents, if any, will be credited to an award in such manner and subject to such terms and conditions as determined by the Administrator in its sole discretion. In the event of a dividend or distribution paid in shares or any other adjustment made upon a change in our capitalization, appropriate adjustments will be made to the awards so that it represents the right to receive upon settlement any and all new, substituted or additional securities or other property (other than normal cash dividends) that will be immediately subject to the same vesting and settlement conditions as are applicable to the award.
Non-Employee Director Limitations
The Amended 2021 Plan provides that, subject to the adjustment provisions in the Amended 2021 Plan, in any calendar year of the Company, a non-employee director may not be paid, issued or granted cash retainer fees and equity awards (whether settled in cash or stock) with an aggregate value of more than $1,000,000 (with the value of each award based on its grant date fair value determined in accordance with U.S. generally accepted accounting principles). Any cash compensation paid or awards granted to an individual while they were an employee or consultant will not count for purposes of this limitation.
Dividends
Dividends or other distributions payable with respect to shares subject to equity awards (including dividend equivalents) will not be paid before and unless the underlying shares vest, and will be subject to the same forfeitability provisions as the underlying shares. No dividends or other distributions will be paid with respect to shares that are subject to unexercised options or stock appreciation rights, although this rule will not preclude the Administrator from exercising its powers and authority under the adjustment, liquidation and merger or change in control provisions of the Amended 2021 Plan.
Termination of Service
The termination of a participant’s status as a service provider occurs (a) in the case of an employee, upon a cessation of the employee-employer relationship between an employee and the Company or any parent or subsidiary for any reason, including, but not limited to, a termination by resignation, discharge, death, disability, or the disaffiliation of an affiliate; (b) in the case of a consultant, upon a cessation of the service relationship between a consultant and the Company or any parent or subsidiary for any reason, including but not limited to, a termination by resignation, discharge, death, or disability; and (c) in the case of a non-employee director, a cessation of the non-employee director’s service on the Board for any reason. A termination of a participant’s status as a service provider will not occur where there is a simultaneous reemployment or re-engagement by the Company or any parent or subsidiary or where there is a change in status from employee
to non-employee director or consultant, from consultant to employee or non-employee director, or from non-employee director to employee or consultant. Notwithstanding the foregoing, to the extent that termination of a participant’s status as a service provider is used to establish a payment event with respect to any award subject to Section 409A of the Code, such "termination of a participant’s status as a service provider" (or terms of similar import) will have the same meaning as "separation from service" as that term is defined in Section 409A of the Code and the applicable guidance issued by the Secretary of the Treasury thereunder.
The definition of disability was amended in the Amended 2021 Plan to mean that a participant is unable to carry out the responsibilities and functions of the position held by the participant by reason of any medically determinable physical or mental impairment that (x) can be expected to result in death and/or (y) has lasted for a period of not less than twelve (12) consecutive months and can reasonably be expected to continue for at least an additional twelve (12) months. A participant will not be considered to have incurred a disability unless the participant furnishes proof of such impairment sufficient to satisfy the Company in its discretion. Notwithstanding the foregoing, however, in the case of any award that is subject to Section 409A of the Code and is payable upon a participant’s disability, the participant shall be treated as having a disability only if the participant’s condition also satisfies the definition of "disability" in Treas. Reg. § 1.409A-3(i)(4).
Transferability of Awards
Unless determined otherwise by the Administrator and subject to the terms of the Amended 2021 Plan (including the prohibition on award exchange programs), awards granted under the Amended 2021 Plan generally are not transferable other than by will or by the laws of descent and distribution, provided, however, that in no event may any award be transferred for consideration to a third-party financial institution, and all rights with respect to an award granted to a participant generally will be available during a participant’s lifetime only to the participant.
Holding Period Condition
Any shares issued to a participant then designated as a "named executive officer" pursuant to the exercise or vesting of an award (after being reduced for such shares sold or withheld to cover any exercise price or applicable tax withholding obligations) will be subject to the holding period condition discussed in the next sentence. The "holding period condition" means that, with respect to certain shares received following the exercise or vesting of an award and the issuance and settlement of such shares, such shares may not be sold, transferred, hypothecated, pledged or otherwise disposed of before the earliest of: (i) the twelve (12) month anniversary of the exercise or settlement date of such shares, (ii) a "change in control" of the Company, (iii) the date the participant ceases to provide services due to participant’s death or disability, or (iv) the date the participant is no longer designated as a named executive officer; provided, however, that participants may conduct transactions that involve merely a change in the form in which the participant owns such shares. To enforce the holding period condition, the Company, in its discretion, may take any action it determines reasonable or necessary, which conditions will expire only the holding period condition is satisfied.
Dissolution or Liquidation
In the event of the Company’s proposed dissolution or liquidation, to the extent it has not been previously exercised, an award will terminate immediately prior to consummation of such proposed action.
Change in Control
The Amended 2021 Plan provides that, in the event of a merger of the Company with or into another corporation or entity or a "change in control" (as defined in the Amended 2021 Plan), and unless provided otherwise in an award agreement, each outstanding award will be assumed, or substantially equivalent awards will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) with appropriate adjustments as to the number and kind of shares and prices (subject to the provisions of the next paragraph).
In the event that the successor corporation does not assume or substitute for the award (or portion thereof), the participant will fully vest in and have the right to exercise the participant’s outstanding options and stock appreciation rights (or portions thereof) not assumed or substituted for, all restrictions on restricted stock, RSUs, and performance awards (or portions thereof) not assumed or substituted for will lapse, and, with respect to such awards with performance-based vesting (or portions thereof), all performance goals or other vesting criteria will be deemed achieved at target levels and as to a prorated portion of each award based on the portion of the applicable performance period that has lapsed through the date of the merger or change in control, and all other terms and conditions met as to such prorated portion of such award, in each case, unless specifically provided otherwise under the applicable award agreement or other written agreement between the participant and the Company. In addition, unless specifically provided otherwise under the applicable award agreement or other written agreement between the participant and the Company, if a stock option or stock appreciation right (or portion thereof) is not assumed or substituted for, the stock option or stock appreciation right (or its applicable portion) will be exercisable for a period of time as set forth in an award agreement, and the stock option or stock appreciation right (or its applicable portion) will terminate upon the expiration of such period.
Notwithstanding anything in the Amended 2021 Plan to the contrary, in the case of a stock option or stock appreciation right with an exercise price that equals or exceeds the price paid for a share of common stock in connection with the change in control, such stock option or stock appreciation right will be cancelled without the payment of consideration therefor unless assumed or substituted.
Clawback Policy and Other Policies
Notwithstanding any provisions to the contrary under the Amended 2021 Plan, all awards granted under the Amended 2021 Plan will be subject to reduction, cancellation, forfeiture, recoupment, reimbursement, or reacquisition under any clawback policy adopted by the Company, including, without limitation, any clawback policy the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable laws, such as the Company's Compensation Recovery Policy as adopted on November 15, 2023 (the "Clawback Policy"). The Administrator may require a participant to forfeit, return or reimburse the Company all or a portion of the award and any amounts paid thereunder pursuant to the terms of the Clawback Policy or as necessary or appropriate to comply with applicable laws, including without limitation any reacquisition right regarding previously acquired Shares or other cash or property. Unless otherwise specifically mentioned and waived in an award agreement or other document, no recovery of compensation under a Clawback Policy or otherwise will
constitute an event that triggers or contributes to any right of a participant to resign for "good reason" or "constructive termination" (or similar term) under any agreement with the Company or any parent or subsidiary of the Company.
In addition, each award may be subject to the terms and conditions of any other policy (and any amendments thereto) adopted by the Company from time to time, which may include any policy related to the vesting or transfer of equity awards. Whether any such policy will apply to a particular award may depend, among other things, on when the award was granted, whom the award was granted to, and the type of award.
Termination or Amendment
The Amended 2021 Plan will continue in effect until terminated by the Administrator, but no options that qualify as incentive stock options under Section 422 of the Code may be granted after ten (10) years from the date of the Amended 2021 Plan’s initial adoption by the Board in 2021. The Administrator may amend, alter, suspend or terminate the Amended 2021 Plan at any time, provided that the Company will obtain stockholder approval of any amendment to the extent approval is necessary to comply with any applicable laws. No amendment, alteration, suspension or termination will materially impair the rights of any participant unless mutually agreed otherwise between the participant and the Administrator.
Summary of Certain United States Federal Income
Tax Consequences
The following summary is intended only as a general guide to the material U.S. federal income tax consequences of participation in the Amended 2021 Plan. The summary is based on existing U.S. laws and regulations, and there can be no assurance that those laws and regulations will not change in the future. The summary does not purport to be complete and does not discuss the tax consequences upon a participant’s death, or the provisions of the income tax laws of any municipality, state or non-U.S. country in which the participant may reside. As a result, tax consequences for any particular participant may vary based on individual circumstances. Interested parties should consult their own tax advisors as to specific tax consequences, including the application and effect of foreign, state and local laws.
Incentive Stock Options
An optionee recognizes no taxable income for regular income tax purposes as a result of the grant or exercise of an incentive stock option qualifying under Section 422 of the Code. Optionees who neither dispose of their shares within two (2) years following the date the option was granted nor within one (1) year following the exercise of the stock option normally will recognize a capital gain or loss equal to the difference, if any, between the sale price and the purchase price of the shares. If an optionee satisfies such holding periods upon a sale of the shares, the Company will not be entitled to any deduction for federal income tax purposes. If an optionee disposes of shares within two (2) years after the date of grant or within one (1) year after the date of exercise (a "disqualifying disposition"), the difference between the fair market value of the shares on the exercise date and the option exercise price (not to exceed the gain realized on the sale if the disposition is a transaction with respect to which a loss, if sustained, would be recognized) will be taxed as ordinary income at the time of disposition. Any gain in excess of that amount will be a capital gain. If a loss is recognized, there will be no ordinary income, and such loss will be a capital loss. Any ordinary income recognized by the optionee upon the disqualifying disposition of the shares generally should be deductible by the Company for federal income tax purposes, except to the extent such deduction is limited by applicable provisions of the Code.
The difference between the option exercise price and the fair market value of the shares on the exercise date is treated as an adjustment in computing the optionee’s alternative minimum taxable income and may be subject to an alternative minimum tax which is paid if such tax exceeds the regular tax for the year. Special rules may apply with respect to certain subsequent sales of the shares in a disqualifying disposition, certain basis adjustments for purposes of computing the alternative minimum taxable income on a subsequent sale of the shares and certain tax credits which may arise with respect to optionees subject to the alternative minimum tax.
Nonstatutory Stock Options
Options not designated or qualifying as incentive stock options will be nonstatutory stock options having no special U.S. tax status. An optionee generally recognizes no taxable income as the result of the grant of such a stock option. Upon exercise of a nonstatutory stock option, the optionee normally recognizes ordinary income equal to the amount that the fair market value of the shares on such date exceeds the exercise price. If the optionee is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of stock acquired by the exercise of a nonstatutory stock option, any gain or loss, based on the difference between the sale price and the fair market value on the exercise date, will be taxed as capital gain or loss. No tax deduction is available to the Company with respect to the grant of a nonstatutory stock option or the sale of the stock acquired pursuant to such grant, and such grant will create no tax consequences at the grant date for the Company.
Stock Appreciation Rights
In general, no taxable income is reportable when a stock appreciation right is granted to a participant. Upon exercise, the participant generally will recognize ordinary income in an amount equal to the amount of cash received and the fair market value of any shares received. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Any additional gain or loss recognized upon any later disposition of the shares would be capital gain or loss. The grant of a stock appreciation right will create no tax consequences at the grant date for the Company.
Restricted Stock Awards
A participant acquiring restricted stock generally will recognize ordinary income equal to the fair market value of the shares on the vesting date. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. The participant may elect, pursuant to Section 83(b) of the Code, to accelerate the ordinary income tax event to the date of acquisition by filing an election with the Internal Revenue Service no later than thirty (30) days after the date the shares are acquired. Upon the sale of shares acquired pursuant to
a restricted stock award, any gain or loss, based on the difference between the sale price and the fair market value on the date the ordinary income tax event occurs, will be taxed as capital gain or loss.
RSU Awards
There generally are no immediate tax consequences of receiving an award of RSUs. A participant who is awarded RSUs generally will be required to recognize ordinary income in an amount equal to the cash received or the fair market value of shares issued to such participant at the end of the applicable vesting period or, if later, the settlement date elected by the Administrator or a participant. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Any additional gain or loss recognized upon any later disposition of any shares received would be capital gain or loss.
Performance Awards
A participant generally will recognize no income upon the grant of a performance award. Upon the settlement of such awards, participants normally will recognize ordinary income in the year of receipt in an amount equal to the cash received and the fair market value of any nonrestricted shares received. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of any shares received, any gain or loss, based on the difference between the sale price and the fair market value on the date the ordinary income tax event occurs, will be taxed as capital gain or loss.
Section 409A
Section 409A of the Code provides certain requirements for non-qualified deferred compensation arrangements with respect to an individual’s deferral and distribution elections and permissible distribution events. The Amended 2021 Plan and awards granted thereunder are intended to be exempt from or meet the requirements of Section 409A of the Code. Failure to satisfy the applicable requirements under these provisions for awards considered deferred compensation would result in the acceleration of income and additional income tax liability to the recipient, including certain penalties. The Amended 2021 Plan and awards under the Amended 2021 Plan are intended to be designed and administered so that any awards under the Amended 2021 Plan that are considered to be deferred compensation will not give rise to any negative tax consequences to the recipient under these provisions.
Medicare Surtax
A participant’s annual "net investment income", as defined in Section 1411 of the Internal Revenue Code, may be subject to a 3.8% federal surtax (generally referred to as the "Medicare Surtax"). Net investment income may include capital gain and/or loss arising from the disposition of shares subject to a participant’s awards under the Amended 2021 Plan. Whether a participant’s net investment income will be subject to the Medicare Surtax will depend on the participant’s level of annual income and other factors.
Tax Effect for the Company
The Company generally will be entitled to a tax deduction in connection with an award under the Amended 2021 Plan in an amount equal to the ordinary income realized by a participant and at the time the participant recognizes such income (for example, the exercise of a nonstatutory stock option). The Company will not be entitled to any tax deduction with respect to an incentive stock option if the recipient holds the shares for the incentive stock option holding periods prior to disposition of the shares. Special rules limit the deductibility of compensation paid to our chief executive officer and other "covered employees" as determined under Section 162(m) and applicable guidance. Under Section 162(m), the annual compensation paid to any of these specified executives will be deductible only to the extent that it does not exceed $1,000,000.
New Plan Benefits
No grants have been made subject to or related to stockholder approval of this proposal. The Company expects to grant our non-employee directors who are elected at the Annual Meeting annual RSU awards (the "2026 Director Grants") on the date of the Annual Meeting. Other future grants under the Amended 2021 Plan will be made at the discretion of the Administrator (as defined below), and, accordingly, are not yet determinable.
The following New Plan Benefits table for the 2021 Plan sets forth information pertaining to the 2026 Director Grants currently contemplated to be made under the 2021 Plan. This table also highlights the fact that none of our executive officers or employees will receive any set benefits or awards that are conditioned upon stockholder approval of the Amended 2021 Plan.
NetApp, Inc. 2021 Equity Incentive Plan, as proposed to be amended
|
|
|
|
|
|
|
|
|
Name and Position |
|
Dollar Value |
|
|
Number of Units |
|
George Kurian, Chief Executive Officer |
|
— |
|
|
— |
|
Wissam Jabre, Executive Vice President and Chief Financial Officer |
|
— |
|
|
— |
|
Cesar Cernuda, President |
|
— |
|
|
— |
|
Harvinder S. Bhela, Former Executive Vice President and Chief Product Officer(1) |
|
— |
|
|
— |
|
Elizabeth M. O’Callahan, Executive Vice President, Chief Administrative Officer and Corporate Secretary |
|
— |
|
|
— |
|
Michael J. Berry, Former Executive Vice President and Chief Financial Officer(2) |
|
— |
|
|
— |
|
All current executive officers as a group (5 persons)(3) |
|
— |
|
|
— |
|
All current director who are not executive officers as a group (9 persons)(4) |
|
$ |
2,355,000 |
|
|
|
22,608 |
|
All employees, including all current officers who are not executive officers, as a group |
|
— |
|
|
— |
|
(1)Mr. Bhela departed from NetApp on June 20, 2025, following the completion of an orderly transition of his duties.
(2)Mr. Berry transitioned from EVP, Chief Financial Officer to a special advisor position on March 10, 2025 and retired from the Company on May 23, 2025.
(3)Mr. Bhela and Mr. Berry are not included in the group of current executive officers. Mr. Nair, the Company’s current Chief Product Officer, joined NetApp effective July 7, 2025, and therefore is included in the group of current executive officers.
(4)On the date of each annual stockholders meeting after any stockholder votes are taken on such date, each outside director who is elected automatically receives an RSU grant with a Dollar Value of $285,000, except the Chair of the Board, who receives a grant with a Dollar Value of $360,000. Values in this row represents such grants (i.e., the 2026 Director Grants). The number of units subject to the 2026 Director Grants will be calculated by dividing the Dollar Value by the fair market value on the grant date of the award. Given that the applicable fair market value on the grant date of the award was not determinable for the 2026 Director Grants as of the Record Date, the Number of Units for this row was estimated by dividing the Dollar Value by the fair market value on the Record Date.
Historical Grant Information
The aggregate number of shares subject to awards granted to certain persons under the 2021 Plan since its inception until July 16, 2025 is set forth in the following table.
NetApp, Inc. 2021 Equity Incentive Plan
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
|
|
Shares Subject |
|
|
|
Options |
|
to Other Stock |
|
Name and Position |
|
Granted(1) |
|
Awards Granted(2) |
|
George Kurian, Chief Executive Officer |
|
— |
|
|
668,297 |
|
Wissam Jabre, Executive Vice President and Chief Financial Officer |
|
— |
|
|
244,243 |
|
Cesar Cernuda, President |
|
|
|
|
339,526 |
|
Harvinder S. Bhela, Former Executive Vice President and Chief Product Officer(3) |
|
— |
|
|
356,502 |
|
Elizabeth M. O’Callahan, Executive Vice President, Chief Administrative Officer and Corporate Secretary |
|
— |
|
|
158,238 |
|
Michael J. Berry, Former Executive Vice President and Chief Financial Officer(4) |
|
— |
|
|
174,222 |
|
All current executive officers as a group(5) |
|
— |
|
|
1,410,304 |
|
All current directors who are not executive officers as a group |
|
— |
|
|
68,521 |
|
Each nominee for election as a director |
|
— |
|
|
727,465 |
|
Each associate of any of such directors, executive officers or nominees |
|
— |
|
— |
|
Each other person who received or is to receive 5 percent of such options, warrants or rights |
|
— |
|
— |
|
All employees, including all current officers who are not executive officers, as a group |
|
— |
|
|
20,047,578 |
|
(1)As of July 16, 2025, there were no options granted under the 2021 Plan.
(2)Other stock awards are in the form of RSUs and PBRSUs, with performance-based awards assuming target performance. This table excludes the 2026 Director Grants, which are included in the New Plan Benefits table above.
(3)Mr. Bhela departed from NetApp on June 20, 2025, following the completion of an orderly transition of his duties.
(4)Mr. Berry transitioned from EVP, Chief Financial Officer to a special advisor position on March 10, 2025 and retired from the Company on May 23, 2025.
(5)Mr. Bhela and Mr. Berry are not included in the group of current executive officers. Mr. Nair, the Company’s current Chief Product Officer, joined NetApp effective July 7, 2025, and therefore is included in the group of current executive officers.
For more information regarding shares of our common stock that may be issued upon the exercise of options, warrants and other rights granted to employees, consultants or members of our Board of Directors under all of our equity compensation plans as of fiscal year end, please see "Equity Compensation Plan Information" beginning on page 104.
Registration with the SEC
If this Proposal No. 5 is approved, we intend to file with the SEC a registration statement on Form S-8 covering the Company's new shares reserved for issuance under the Amended 2021 Plan.
Stockholder Proposal - Support for Special Shareholder Meeting Improvement
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|
|
|
|
Proposal 6 |
|
|
|
Support for Special Shareholder Meeting Improvement |
|
|
John Chevedden, 2215 Nelson Avenue, No. 205 Redondo Beach, CA 90278, the beneficial owner of shares of the Company’s common stock valued at $2,000 or greater, has given notice that he intends to present a proposal at the Annual Meeting. In accordance with SEC rules, the following is the complete text of the proposal exactly as submitted. We have put a box around the materials provided by Mr. Chevedden so that readers can easily distinguish between the materials provided by him and the materials provided by the Company. The stockholder proposal includes some assertions that we believe are misleading. We have not addressed all of these assertions, and we accept no responsibility for the stockholder proposal. |
|
|
Proposal 6 – Support for Special Shareholder Meeting Improvement 
Shareholders ask our Board of Directors to take the steps necessary to remove the current shareholder rights provision that considers the voice of certain NetApp, Inc. (NTAP) shareholders as non-shareholders. Currently all shares not held for one continuous year are considered non-shareholders if they seek to call for a special shareholder meeting on an important matter. The current one-year shareholder rights exclusion for all shares held for less than one continuous year makes the current so-called shareholder right to call for a special shareholder meeting useless. There is no point to have useless right on the books of NTAP. The reason to enable all shareholders to call for a special shareholder meeting is to allow one shareholder or a group of shareholders to quickly acquire NTAP shares to equal the challenging 25% share ownership requirement ($6 Billion) from all shares outstanding, based on all shares outstanding, to call for a special shareholder meeting to incentivize a turnaround of NTAP should NTAP find itself in a continuing slump. NTAP stock is erratic. From $86 in 2018 it dropped to $44 in 2020. Then after hitting $91 in 2021 it dropped to $66 in 2023. The best strategies for turning around a company do not necessarily come from a company's existing shareholders. If NTAP finds itself in a future slump, NTAP shareholders and potential NTAP shareholders will not even consider acquiring more shares in order to call for a special shareholder meeting, if they have to wait one-year to call for a special shareholder meeting. A one-year holding period makes no sense. A slumping stock price demands an immediate response before the window of opportunity passes. If one shareholder or a group of shareholders can quickly acquire more shares to call for a special shareholder meeting this is an incentive for NTAP Directors to avoid a slump in the first place since the continued service of the least qualified NTAP Directors could be terminated by a special shareholder meeting. This is a good incentive for the NTAP Directors to have for the benefit of all NTAP shareholders. At minimum this proposal alerts shareholders to the severe limitation, to the point of uselessness, baked into the current NTAP rules for shareholders to call for a special shareholder meeting. Please vote yes: Special Shareholder Meeting Improvement – Proposal 6 |
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|
Response of the Board Our Board carefully considered this stockholder proposal and unanimously recommends a VOTE AGAINST the proposal. The Board believes that its adoption is unnecessary and not in the best interests of the Company or our stockholders. |
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|
Reasons to Vote Against This Proposal •The Board believes that the current right of holders of 25% of our stock for one year to request a special meeting of stockholders provides a meaningful and balanced stockholder right and reduces the potential misuse of the special meeting right by special-interest stockholders with no long-term interest in the Company. •Special meetings require substantial time, effort and management resources, and the one-year holding requirement provides a reasonable safeguard against financial expense and administrative burdens associated with conducting a special meeting of stockholders. •NetApp’s commitment to strong corporate governance ensures Board accountability and promotes long-term stockholder value. |
|
|
The Board believes that the current right of holders of 25% of our stock for one year to request a special meeting of stockholders provides a meaningful and balanced stockholder right and reduces the potential misuse of the special meeting right by special-interest stockholders with no long-term interest in the Company. The Company’s Bylaws already permit a stockholder or group of stockholders who have continuously owned at least 25% of the Company’s common stock for at least one year to call a special meeting. The Board believes that the current special meeting right, including the one-year holding requirement, strikes an appropriate balance by ensuring that stockholders have a meaningful right to call a special meeting to act on extraordinary, pressing events, while also protecting the Company and its broader stockholder base against narrow and short-term oriented interests. In addition, the Board believes that the current one-year holding requirement, which is consistent with the minimum ownership period required by the SEC’s shareholder proposal rule, benefits stockholders by making this right available only to stockholders who have demonstrated that they have an economic stake and ongoing commitment to the Company. It also provides for a reasonable amount of time for a constructive dialogue with the Company to address any issues prior to escalating to a request for a special meeting. Furthermore, at our 2023 annual meeting of stockholders, the same proponent presented a similar stockholder proposal requesting that the Company allow stockholders holding just 20% of our stock, regardless of the length of ownership, to call a special meeting. A majority of our stockholders rejected the proposal, indicating stockholder concurrence with the current one-year holding requirement established in our existing special meeting right. Special meetings require substantial time, effort and management resources, and the one-year holding requirement provides a reasonable safeguard against financial expense and administrative burdens associated with conducting a special meeting of stockholders. Eliminating the one-year holding requirement, as requested by Proposal No. 6, would enable a minority of stockholders who have not held a financial stake in the Company for a meaningful period of time to call special meetings and draw on company resources, which could subject the Company to regular disruptions by stockholders with narrow short-term interests. A special meeting is a significant undertaking that requires substantial company expense and Board and management resources. For every special meeting, the Company is required to provide each stockholder a notice of meeting and proxy materials, which results in significant legal, administrative and distribution expenses, as well as other costs. Additionally, conducting a special meeting diverts the Board’s and management’s attention from their focus on enhancing stockholder value and operating our business in a competitive and rapidly evolving landscape. Special meetings also draw on stockholder resources and command the time and attention of other stockholders to consider and vote on any matters presented. The Board believes that such diversion of attention and resources is only appropriate for a special meeting supported by stockholders who have held a financial stake in NetApp for a meaningful period of time. NetApp’s commitment to strong corporate governance ensures Board accountability and promotes long-term stockholder value. The Board encourages stockholders to consider the Company’s existing special meeting right in the context of our broader commitment to strong corporate governance. In addition to the Company’s longstanding and robust investor engagement program, the Board regularly reviews and adjusts our corporate governance practices to maintain leading governance practices. The Company has implemented numerous corporate governance measures – together with the meaningful right to call special meetings – that reflect stockholder input, appropriately balance the roles of the Board and management, and safeguard stockholders’ interests: |
|
|
•Stockholder Action by Written Consent: Stockholders have the ability to act by written consent, subject to certain restrictions that protect against the risk of a small minority of short-term stockholders using such a right for their own special interests. •Proxy Access: Stockholders may nominate and include director nominees in the Company’s annual meeting materials, subject to satisfying our bylaws requirements. •Independent Board Chair: We have an independent Chair of the Board. •Nine of our Ten Directors are Independent: Other than the Chief Executive Officer, our Board comprises all independent directors. •Independent Committee Membership: The Board has three active standing Board committees with 100% independent members. |
|
|
|
|
|
•Annual Director Elections: Directors are elected annually by stockholders through a majority vote standard in uncontested elections. •Active Stockholder Engagement: We regularly engage with stockholders and have a defined process for stockholders to recommend director nominees to the Corporate Governance and Nominating Committee. Notably, during these engagements, our stockholders did not raise the one-year holding period required to call a special meeting as an area of concern. •Board Evaluations: The Board conducts annual Board and Board committee self-evaluations, using a third-party facilitator and defined interview questions. •Annual Say-on-Pay Advisory Vote: We hold an annual advisory vote on executive compensation to allow stockholders the opportunity to express their views on executive compensation. •Code of Conduct: All NetApp directors, officers, and employees are subject to our robust Code of Conduct. For these reasons, the Board believes that this Proposal No. 6 is not in the best interests of the Company or our stockholders. |
|
|
Recommendation of the Board |
|
|
Our Board of Directors Unanimously Recommends That Stockholders Vote AGAINST Proposal No. 6. |
|
Additional Information
Security Ownership of Certain Beneficial Owners and Management
To the Company’s knowledge, the following table sets forth certain information regarding beneficial ownership of the Company’s common stock as of July 16, 2025, except as otherwise set forth below, by (1) each person or entity who is known by the Company to own beneficially more than 5% of the Company’s common stock; (2) each of the Company’s directors and nominees for director; (3) each of the Company’s named executive officers set forth in the Summary Compensation Table; and (4) all of the Company’s current directors, director nominees and executive officers as a group. Except as indicated, the address of the beneficial owners is c/o NetApp, Inc., 3060 Olsen Drive, San Jose, California 95128. Information related to holders of more than 5% of the Company’s common stock was obtained from filings with the SEC pursuant to Sections 13(d) or 13(g) of the Exchange Act.
|
|
|
|
|
|
|
|
|
|
|
Number of Shares |
|
|
Percentage of |
|
Name of Beneficial Owners |
|
Beneficially Owned |
|
|
Class(1) |
|
The Vanguard Group(2) |
|
|
|
|
|
|
100 Vanguard Boulevard |
|
|
|
|
|
|
Malvern, PA 19355 |
|
|
26,061,347 |
|
|
|
13.02 |
% |
BlackRock, Inc.(3) |
|
|
|
|
|
|
55 East 52nd Street |
|
|
|
|
|
|
New York, NY 10055 |
|
|
19,367,597 |
|
|
|
9.68 |
% |
PRIMECAP Management Company(4) |
|
|
|
|
|
|
177 E. Colorado Blvd, 11th Floor |
|
|
|
|
|
|
Pasadena, CA 91105 |
|
|
12,220,339 |
|
|
|
6.11 |
% |
State Street Corporation (5) |
|
|
|
|
|
|
One Congress Street, Suite 1 |
|
|
|
|
|
|
Boston, MA 02114 |
|
|
10,283,026 |
|
|
|
5.14 |
% |
George Kurian(6) |
|
|
304,566 |
|
|
* |
|
Wissam Jabre(7) |
|
|
- |
|
|
* |
|
Cesar Cernuda(8) |
|
|
54,425 |
|
|
* |
|
Harvinder S. Bhela(9) |
|
|
172,347 |
|
|
* |
|
Elizabeth M. O’Callahan(10) |
|
|
27,001 |
|
|
* |
|
Michael J. Berry(11) |
|
|
95,516 |
|
|
* |
|
T. Michael Nevens(12) |
|
|
12,303 |
|
|
* |
|
Deepak Ahuja(13) |
|
|
16,264 |
|
|
* |
|
Anders Gustafsson(14) |
|
|
11,449 |
|
|
* |
|
Gerald Held(15) |
|
|
64,986 |
|
|
* |
|
Deborah L. Kerr(16) |
|
|
30,509 |
|
|
* |
|
Carrie Palin(17) |
|
|
9,353 |
|
|
* |
|
Frank Pelzer(18) |
|
|
1,456 |
|
|
* |
|
Scott F. Schenkel(19) |
|
|
30,509 |
|
|
* |
|
June Yang(20) |
|
|
- |
|
|
* |
|
All current directors, director nominees and executive officers as a group (14 persons)(21) |
|
|
562,821 |
|
|
* |
|
* Less than 1%.
(1)Percentage of Class is based on 200,098,883 shares of common stock outstanding on July 16, 2025. Shares of common stock subject to stock options and RSUs that are currently exercisable or will become exercisable or issuable within 60 days of July 16, 2025 are deemed outstanding for computing the percentage of the person or group holding such options and/or RSUs, but are not deemed outstanding for computing the percentage of any other person or group. Except as indicated in footnotes to this table, pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock.
(2)Information concerning stock ownership was obtained from Amendment No. 10 to the Schedule 13G filed with the SEC on February 13, 2024 by The Vanguard Group, which reported shared voting power with respect to 269,053 of shares of common stock, sole dispositive power with respect to 25,133,341 shares of common stock and shared dispositive power with respect to 928,006 shares of common stock.
(3)Information concerning stock ownership was obtained from Amendment No. 15 to the Schedule 13G filed with the SEC on April 23, 2025 by BlackRock, Inc., which reported sole voting power with respect to 17,879,124 of such shares of common stock and sole dispositive power with respect to 19,367,597 shares of common stock.
(4)Information concerning stock ownership was obtained from Amendment No. 10 to the Schedule 13G filed with the SEC on February 13, 2025 by PRIMECAP Management Company, which reported sole voting power with respect to 12,022,513 of shares of common stock and sole dispositive power with respect to 12,220,339 shares of common stock.
(5)Information concerning stock ownership was obtained from the Schedule 13G filed with the SEC on October 17, 2024, by State Street Corporation, which reported shared voting power with respect to 6,425,972 shares of common stock and shared dispositive power with respect to 10,261,170 shares of common stock.
(6)Consists of (i) 296,805 shares of common stock held of record by Mr. Kurian and (ii) 7,761 shares of common stock issuable to Mr. Kurian upon the vesting of RSUs within 60 days of July 16, 2025.
(7)Consists of 0 shares of common stock held or acquirable within 60 days held of record by Mr. Jabre.
(8)Consists of (i) 49,506 shares of common stock held of record by Mr. Cernuda and (ii) 4,919 shares of common stock issuable to Mr. Cernuda upon the vesting of RSUs within 60 days of July 16, 2025.
(9)Consists of 172,347 shares of common stock held of record by Mr. Bhela.
(10)Consists of (i) 24,251 shares of common stock held of record by Ms. O’Callahan and (ii) 2,750 shares of common stock issuable to Ms. O’Callahan upon the vesting of RSUs within 60 days of July 16, 2025.
(11)Consists of 95,516 shares of common stock held of record by the Berry Family Trust.
(12)Consists of (i) 9,277 shares of common stock held of record by a trust of which Mr. Nevens is the trustee and (ii) 3,026 shares of common stock issuable to Mr. Nevens upon the vesting of RSUs within 60 days of July 16, 2025.
(13)Consists of 16,264 shares of common stock held of record by Mr. Ahuja. Excludes (i) 3,526 RSUs which have vested but have been deferred until January 2, 2026 and (ii) 2,377 RSUs which will vest within 60 days of July 16, 2025 but have been deferred until January 2, 2027.
(14)Consists of (i) 9,072 shares of common stock held of record by Mr. Gustafsson and (ii) 2,377 shares of common stock issuable to Mr. Gustafsson upon the vesting of RSUs within 60 days of July 16, 2025.
(15)Consists of (i) 20,907 shares of common stock held of record by Mr. Held and (ii) 44,079 RSUs which have vested or will vest within 60 days of July 16, 2025 but have been deferred until separation of service.
(16)Consists of (i) 22,676 shares of common stock held of record by Ms. Kerr; (ii) 2,377 shares of common stock issuable to Ms. Kerr upon the vesting of RSUs within 60 days of July 16, 2025; and (iii) 5,456 RSUs which have vested but have been deferred until separation of service.
(17)Consists of (i) 6,976 shares of common stock held of record by Ms. Palin and (ii) 2,377 shares of common stock issuable to Ms. Palin upon the vesting of RSUs within 60 days of July 16, 2025.
(18)Consists of 1,456 shares of common stock issuable to Mr. Pelzer upon the vesting of RSUs within 60 days of July 16, 2025
(19)Consists of (i) 28,132 shares of common stock held of record by Mr. Schenkel and (ii) 2,377 shares of common stock issuable to Mr. Schenkel upon the vesting of RSUs within 60 days of July 16, 2025.
(20)Ms. Yang excludes 2,377 RSUs which will vest within 60 days of July 16, 2025 but have been deferred until June 1, 2028.
(21)Consists of (i) 483,866 shares of common stock held of record by our current directors, director nominees and executive officers; (ii) 29,420 shares of common stock issuable to our current directors, director nominees and executive officers upon the vesting of RSUs within 60 days of July 16, 2025; and (iii) 49,535 which have vested or will vest within 60 days of July 16, 2025 but have been deferred until separation of service. Excludes 8,280 RSUs which have vested or will vest within 60 days of July 16, 2025 but have been deferred to a future date beyond such period.
Equity Compensation Plan Information
The following table provides information as of April 25, 2025 with respect to the shares of the Company’s common stock that may be issued under the Company’s existing equity compensation plans. The table does not include information with respect to shares subject to outstanding options and awards granted under equity compensation plans assumed by the Company in connection with mergers and acquisitions of the companies that originally granted those options and awards. Footnote 5 to the table sets forth the total number of shares of common stock issuable upon the exercise of those assumed options and awards as of April 25, 2025 and the weighted-average exercise price.
|
|
|
|
|
|
|
|
|
|
|
|
|
A |
|
|
B |
|
C |
|
|
|
Number of Securities
to be Issued upon
Exercise of
Outstanding Options,
Warrants and Rights |
|
|
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights |
|
Number of Securities
Remaining Available
for Future Issuance Under
Equity Compensation
Plans (#) (Excluding Securities |
|
Plan Category |
|
#(1) |
|
|
($)(2) |
|
Reflected in Column A)(3) |
|
Equity compensation plans approved by stockholders(4) |
|
|
9,673,333 |
|
|
— |
|
|
13,419,660 |
|
Equity compensation plans not approved by stockholders(5) |
|
— |
|
|
— |
|
— |
|
Total(6) |
|
|
9,673,333 |
|
|
— |
|
|
13,419,660 |
|
(1)Includes 7,152,877 shares of common stock issuable upon vesting and payout of shares subject to outstanding RSU awards and 2,520,456 shares of common stock issuable upon vesting and payout of shares subject to PBRSU awards, assuming the maximum number of shares vest. Excludes purchase rights accruing under the Company’s Purchase Plan. The Purchase Plan was approved by the stockholders in connection with the initial public offering of the Company’s common stock. Under the Purchase Plan, each eligible employee may purchase up to 1,500 shares of common stock at semiannual intervals on the last business day of May and November of each year at a purchase price per share equal to 85% of the lesser of (1) the closing selling price per share of common stock on the employee’s entry date into the two-year offering period in which that semiannual purchase date occurs; or (2) the closing selling price per share on the semiannual purchase date.
(2)Column B does not take into account shares issuable upon the vesting of outstanding RSUs, which have no exercise price.
(3)Includes (1) 11,382,468 shares of common stock available for issuance under the 2021 Plan; and (2) 2,037,192 shares available for issuance under the Purchase Plan. As of July 16, 2025, 9,508,662 shares were available for issuance under the 2021 Plan. As of July 16, 2025, 1,188,502 shares were available for issuance under the Purchase Plan.
(4)The category consists of the Company’s 1999 Plan, 2021 Plan and the Purchase Plan.
(5)The table does not include information for equity compensation plans assumed by the Company in connection with mergers and acquisitions of the companies that originally established those plans. As of April 25, 2025, there were a total of 43,597 shares subject to outstanding awards under all equity compensation plans assumed by the Company in connection with mergers and acquisitions, of which 15,241 shares were subject to outstanding option awards and 28,356 shares were subject to outstanding full value awards. The outstanding stock options had a weighted-average exercise price of $19.1845 per share and a weighted-average remaining term of 2.05 years as of such date. No additional awards may be made under those assumed plans.
(6)As of April 25, 2025, there were a total of 9,716,930 shares subject to outstanding awards (including PBRSU awards shown assuming maximum performance) under all of the Company’s equity compensation plans, including equity compensation plans assumed by the Company in connection with mergers and acquisitions, of which 15,241 shares were subject to outstanding option awards and 9,701,689 shares were subject to outstanding full value awards. The outstanding stock options had a weighted-average exercise price of $19.1845 per share and a weighted-average remaining term of 2.05 years as of such date. As of July 16, 2025, there were a total of 10,466,042 shares subject to outstanding awards (including PBRSU awards shown assuming maximum performance) under all of the Company’s equity compensation plans, including equity compensation plans assumed by the Company in connection with mergers and acquisitions, of which 7,494 shares were subject to outstanding option awards and 10,458,548 shares were subject to outstanding full value awards. The outstanding stock options had a weighted-average exercise price of $18.7480 and a weighted-average remaining term of 3.26 years as of such date.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires the Company’s directors and officers and persons who beneficially own more than 10% of a registered class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of changes in their ownership of common stock and other equity securities of the Company. Officers, directors and greater than 10% stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.
Based solely on the review of the copies of such reports furnished to the Company and written representations that no other reports were required, the Company believes that during fiscal 2025, its officers, directors and greater than 10% stockholders complied with all Section 16 filing requirements, except with respect to a late report on Form 4 reporting six transactions relating to the forfeiture of shares to satisfy tax withholding obligations in connection with the vesting of previously granted equity for each of George Kurian, Michael Berry, Cesar Cernuda, Elizabeth O'Callahan, Harvinder Bhela, and Daniel De Lorenzo, each filed on February 20, 2025, and a late report on Form 4 for each of Cesar Cernuda and Anders Gustafsson reporting one transaction relating to a broker-initiated acquisition filed on May 14, 2024 and March 31, 2025, respectively.
Certain Transactions with Related Parties
Our Corporate Governance and Nominating Committee is responsible for the review, approval, and ratification of transactions with related persons.
Specifically, the Corporate Governance and Nominating Committee has the authority to:
•Consider questions of possible conflicts of interest of members of our Board and corporate officers;
•Review actual and potential conflicts of interest of members of our Board and corporate officers, and clear any involvement of such persons in matters that may involve a conflict of interest;
•Establish policies and procedures for the review and approval of "related person transactions," as defined in applicable SEC rules;
•Conduct ongoing reviews of potential related person transactions; and
•Review and approve all related person transactions.
Pursuant to the SEC’s rules and regulations, "related persons" include, but are not limited to, the Company’s directors, executive officers, and beneficial owners of more than 5% of the Company’s outstanding common stock. If the determination is made that a related person has a material interest in any Company transaction, then the Corporate Governance and Nominating Committee, which consists entirely of all independent directors, is responsible for reviewing and approving or ratifying it. An approved transaction would be disclosed in accordance with the SEC rules if required. If the related person at issue is a director of the Company, or a family member of a director, then that director would not participate in those discussions.
In the ordinary course of our business, we engage in transactions with the Google Cloud division of Alphabet Inc. Thomas Kurian, the brother of our Chief Executive Officer and President, George Kurian, is the CEO of Google Cloud. Our relationship with Google Cloud preceded Mr. Thomas Kurian’s employment there. We believe that the transactions with Google Cloud have been entered into in the ordinary course of business and have been conducted on an arms-length basis and do not represent a material interest to any of our related persons, and therefore, are not related person transactions within the meaning of Item 404 of Regulation S-K.
General Information
Why am I receiving these materials?
The Board of Directors of NetApp, Inc. has made these materials available to you on the Internet or, upon your request, has delivered printed proxy materials to you in connection with the solicitation of proxies for use at the Annual Meeting of Stockholders, and any adjournment, postponement or other delay thereof. NetApp, Inc., a Delaware corporation, is referred to in this Proxy Statement as the "Company," "NetApp," "we" or "our." This Proxy Statement describes proposals on which you, as a stockholder, are being asked to vote. It also gives you information on these proposals, as well as other information, so that you can make an informed decision. As a stockholder, you are invited to attend the Annual Meeting and are requested to vote on the items of business described in this Proxy Statement.
Why did I receive a Notice in the mail regarding the Internet availability of proxy materials?
In accordance with rules and regulations adopted by the SEC, instead of mailing a printed copy of our proxy materials to each of our stockholders, we are furnishing proxy materials to our stockholders over the Internet. If you received a Notice of Internet Availability of Proxy Materials (the "Notice") by mail, you will not receive a printed copy of the proxy materials. Instead, the Notice instructs you as to how you may access and review all of the information contained in the proxy materials. The Notice also instructs you as to how you may submit your proxy over the Internet or by telephone. If you received a Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice.
Who can vote at the Annual Meeting?
Stockholders of record as of the close of the Record Date are entitled to vote at the Annual Meeting. If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered, with respect to those shares of common stock, the stockholder of record. If your shares of common stock are held by a bank, broker or other nominee, you are considered the "beneficial owner" of those shares, which are held in "street name." As the beneficial owner, you have the right to direct your bank, broker or other nominee how to vote your shares by following the voting instructions that your bank, broker or other nominee provides you. If you do not provide your bank, broker, or other nominee with instructions on how to vote your shares, your bank, broker or other nominee may not vote your shares with respect to any non-routine matters, but may, in its discretion, vote your shares with respect to routine matters. For more information on routine and non-routine matters, see "What are abstentions and broker non-votes?" below.
When and where will the Annual Meeting take place?
In order to facilitate stockholder attendance, the Board has determined that our Annual Meeting will be held virtually on Wednesday, September 10, 2025, at 3:30 p.m. Pacific time, with no physical in-person meeting. You may attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/NTAP2025.
How do I attend the Annual Meeting?
We are committed to ensuring that stockholders will be afforded the same rights and opportunities to participate as they would at an in-person meeting. You may attend the Annual Meeting and vote your shares electronically via the Internet at www.virtualshareholdermeeting.com/NTAP2025. To participate in the Annual Meeting, you will need the control number included on your Notice of Internet Availability of Proxy Materials, on your proxy card or on the instructions that accompanied your proxy materials.
Will there be an opportunity to ask questions during the Annual Meeting?
As part of the Annual Meeting, we will provide an opportunity for stockholders to ask questions submitted online during or prior to the meeting that are pertinent to the Company and the meeting matters, as time permits. Only stockholders that have accessed the Annual Meeting as a stockholder (rather than a "Guest") by following the procedures outlined above in "How do I attend the Annual Meeting?" will be permitted to submit questions during the Annual Meeting. Each stockholder is limited to no more than three questions. Questions should be succinct and cover a single topic. We will not address questions that are, among other things:
•irrelevant to the business of the Company or to the business of the Annual Meeting;
•related to material non-public information of the Company;
•related to personal grievances;
•derogatory references to individuals or that are otherwise in bad taste;
•repetitious statements already made by another stockholder;
•in furtherance of the stockholder’s personal or business interests; or
•out of order or otherwise not suitable for the conduct of the Annual Meeting as determined by the presiding officer or Corporate Secretary in their reasonable judgment.
Additional information regarding opportunities for stockholders to ask questions will be available in the "Rules of Conduct and Procedures" available on the Annual Meeting webpage for stockholders that have accessed the Annual Meeting as a stockholder (rather than a ‘Guest’) by following the procedures outlined above.
How many shares must be present to hold the Annual Meeting?
To hold the meeting and conduct business, the holders of a majority of NetApp’s shares of common stock issued and outstanding and entitled to vote, in person or by proxy, at the Annual Meeting must be present in person or by proxy. This is called a quorum. Virtual attendance at the Annual Meeting constitutes presence in person for purposes of a quorum at the Annual Meeting.
How many shares of NetApp common stock are entitled to vote at the Annual Meeting?
At the Annual Meeting, each holder of common stock is entitled to one vote for each share of common stock held by such stockholder on the Record Date. On the Record Date, the Company had 200,098,883 shares of common stock outstanding and entitled to vote at the Annual Meeting. No shares of the Company’s preferred stock were outstanding. There are no cumulative voting rights.
Who will count the votes?
A representative of Broadridge Financial Solutions, Inc. will act as the inspector of elections and tabulate the votes.
How many votes are required for each proposal?
For Proposal No. 1, a nominee for director will be elected to the Board if the number of votes cast "FOR" a nominee’s election exceed the number of votes cast "AGAINST" such nominee’s election. Approval of each of Proposal Nos. 2, 3, 4, 5 and 6 requires the affirmative vote of the holders of a majority of the stock having voting power present in person or represented by proxy. Voting results will be published in a Current Report on Form 8-K, which will be filed with the SEC within four business days of the Annual Meeting.
How do I vote?
The Company is offering stockholders of record four methods of voting: (1) you may vote by telephone; (2) you may vote over the Internet; (3) you may vote electronically at the Annual Meeting by following the instructions available on the meeting website at www.virtualshareholdermeeting.com/NTAP2025; and (4) finally, you may request a proxy card from us and indicate your vote by signing and dating the card where indicated, and mailing or otherwise returning the card in the prepaid envelope provided.
If you submit a proxy card but do not specify your votes, your shares of common stock will be voted:
•"FOR" the election of each of the director nominees named in Proposal No. 1;
•"FOR" Proposal Nos. 2, 3, 4 and 5; and
•"AGAINST" Proposal No. 6.
Uninstructed proxies will be voted in the proxy holder’s discretion as to any other matter that may properly come before the Annual Meeting.
If you were a stockholder as of the Record Date, or you hold a legal proxy provided by your bank, broker or nominee for the Annual Meeting, you may vote during the Annual Meeting by following the instructions available on the meeting website during the meeting. Please contact your bank, broker or other nominee for information on obtaining a legal proxy.
How can I change my vote or revoke my proxy?
Any stockholder of record voting by proxy has the power to revoke a proxy at any time before the polls close at the Annual Meeting. You may revoke your proxy by filing with the Secretary of the Company an instrument of revocation or a duly executed proxy bearing a later date, or if you are attending the Annual Meeting virtually, you may change your vote electronically. If you are the beneficial owner of your shares, we recommend that you contact the bank, broker or other nominee holding your shares for instructions on how to revoke your proxy or change your vote.
What are abstentions and broker non-votes?
Abstentions will be counted for the purposes of determining both (1) the presence or absence of a quorum for the transaction of business; and (2) the total number of shares entitled to vote at the Annual Meeting with respect to a proposal. Accordingly, abstentions will have the same effect as a vote against a proposal, except with respect to Proposal No. 1, where they will have no effect.
A "broker non-vote" occurs when a bank, broker or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the bank, broker or other nominee does not have discretionary voting power with respect to such proposal and has not received voting instructions from the beneficial owner. Broker non-votes will be counted for the purpose of determining the presence or absence of a quorum for the transaction of business but will not be counted for the purpose of determining the number of votes cast on a proposal. Accordingly, a broker non-vote will make a quorum more readily attainable but will not otherwise affect the outcome of the vote on a proposal.
If your shares are held in street name and you do not instruct your bank, broker or other nominee on how to vote your shares, your bank, broker or other nominee may, at its discretion, either leave your shares unvoted or vote your shares on routine matters but is not permitted to vote your shares on non-routine matters. Proposal No. 3 is considered a routine matter. Proposal Nos. 1, 2, 4, 5 and 6 are considered non-routine matters, and, accordingly, broker non-votes will have no effect on the outcome of these matters.
How many copies of the proxy materials will be delivered to stockholders sharing the same address?
The SEC has adopted rules that permit companies and intermediaries, such as brokers, to satisfy delivery requirements for proxy materials 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 provides extra convenience for stockholders and cost savings for the Company. The Company and some banks and brokers household proxy materials unless contrary instructions have been received from one or more of the affected stockholders. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate Proxy Statement, or if you are receiving multiple copies of the Proxy Statement and wish to receive only one, please (1) follow the instructions provided when you vote over the Internet; or (2) contact Broadridge Financial Solutions, Inc., either by calling toll free at (800) 542-1061 or by writing to Broadridge Financial Solutions, Inc., Householding Department, 51 Mercedes Way, Edgewood, New York 11717.
Where may I obtain a copy of the Annual Report?
The Notice, this Proxy Statement and the Company’s Annual Report on Form 10-K for our fiscal year that ended on April 25, 2025 have been made available on our website. Our fiscal year is reported on a 52- or 53-week year that ends on the last Friday in April, and our 2025 fiscal year began on April 27, 2024 and ended on April 25, 2025. The Annual Report is not incorporated into this Proxy Statement and is not considered proxy soliciting material. The Annual Report is posted at the following website address: http://investors.netapp.com/financial-information/annual-reports.
Who pays for the solicitation of proxies?
We will bear the cost of soliciting proxies. Copies of solicitation materials will be made available upon request to brokerage houses, fiduciaries, and custodians holding shares in their names that are beneficially owned by others to forward to such beneficial owners. The Company may reimburse such persons for their costs of forwarding the solicitation materials to such beneficial owners. The Company has retained Innisfree M&A Incorporated, a professional proxy solicitation firm, to assist in the solicitation of proxies from stockholders of the Company. Innisfree M&A Incorporated may solicit proxies by personal interview, mail, telephone, facsimile, email, or otherwise. The Company expects that it will pay Innisfree M&A Incorporated a customary fee, estimated to be approximately $35,000, plus reasonable out-of-pocket expenses incurred in the process of soliciting proxies. In addition, the original solicitation of proxies may be supplemented by solicitation by telephone, electronic communication or other means by directors, officers, employees or agents of the Company. No additional compensation will be paid to these individuals for any such services.
How and when may I submit proposals for consideration at next year’s Annual Meeting of Stockholders?
The Company’s stockholders may submit proposals for consideration at the Annual Meeting. Stockholders may also recommend candidates for election to our Board of Directors for the Annual Meeting (see "Corporate Governance — Corporate Governance and Nominating Committee").
Proposals to be Considered for Inclusion in NetApp’s Proxy Materials
Pursuant to Rule 14a-8 under the Exchange Act, stockholder proposals may be included in our 2026 Proxy Statement. Any such stockholder proposals must be submitted in writing to the attention of the Corporate Secretary, NetApp, Inc., 3060 Olsen Drive, San Jose, California 95128, no later than March 27, 2026, which is 120 calendar days prior to the first anniversary of the mailing date of this Proxy Statement.
Director Nominations for Inclusion in NetApp’s Proxy Materials (Proxy Access)
Under the Company’s proxy access bylaw, a stockholder (or a group of up to 20 stockholders) owning at least 3% of the Company’s outstanding stock continuously for at least three years may nominate and include in the Company’s annual meeting materials director nominees constituting up to the greater of two directors or twenty percent of the Board, provided that the stockholders and nominees satisfy the requirements specified in the bylaws. Notice of a proxy access nomination for consideration at our 2025 Annual Meeting must be received no later than March 27, 2026 and no earlier than February 25, 2026.
Other Proposals and Nominations
Under the Company’s bylaws, a proposal that a stockholder intends to present for consideration at the 2026 Annual Meeting but does not seek to include in the Company’s proxy materials for the 2026 Annual Meeting (including the nomination of an individual to serve as a director other than pursuant to our proxy access bylaw as described immediately above) must be received by the Corporate Secretary (at the address specified in the preceding paragraph) no later than May 13, 2026 and no earlier than April 13, 2026. The stockholder’s submission must include the information specified in the Company’s bylaws.
Stockholders interested in submitting such a proposal are advised to contact knowledgeable legal counsel with regard to the detailed requirements of applicable securities laws.
If a stockholder gives notice of a proposal or a nomination after the applicable deadline specified above, the notice will not be considered timely, and the stockholder will not be permitted to present the proposal or the nomination to the stockholders for a vote at the 2026 Annual Meeting.
Universal Proxy Rules
In addition, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must comply with the requirements of Rule 14a-19 under the Exchange Act, including providing us with a notice that sets forth the information required by Rule 14a-19 no later than May 13, 2026.
.
Other Business
Our Board of Directors knows of no other business that will be presented for consideration at the Annual Meeting. If other matters are properly brought before the Annual Meeting, however, it is the intention of the persons named in the accompanying proxy to use their discretionary voting authority to vote the shares represented thereby on such matters in accordance with their best judgment.
FORM 10-K
The Company filed an Annual Report on Form 10-K with the SEC on June 9, 2025. Our Internet address is www.netapp.com. Information on our website is not incorporated by reference into this Proxy Statement. We make available through our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Stockholders may also obtain a copy of this report, without charge, by writing to Kris Newton, Vice President, Investor Relations at the Company’s principal executive offices located at 3060 Olsen Drive, San Jose, California 95128.
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By Order of the Board of Directors 
George Kurian
Chief Executive Officer |
July 25, 2025
2025 NetApp, Inc. All Rights Reserved. NETAPP, the NETAPP logo, and the marks listed at http://www.netapp.com/TM are trademarks of NetApp, Inc. Other company and product names may be trademarks of their respective owners.
Annex A
NETAPP, INC.
RECONCILIATION OF NON-GAAP TO GAAP
FINANCIAL STATEMENT INFORMATION
(In millions, except net income per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
April 25, 2025 |
|
|
|
April 26, 2024 |
|
|
NET INCOME |
|
$ |
|
1,186 |
|
|
|
$ |
986 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
|
47 |
|
|
|
|
57 |
|
|
Stock-based compensation |
|
|
|
386 |
|
|
|
|
357 |
|
|
Litigation settlements |
|
|
— |
|
|
|
|
|
(5 |
) |
|
Restructuring charges |
|
|
|
83 |
|
|
|
|
44 |
|
|
Acquisition-related expense |
|
|
|
5 |
|
|
|
|
10 |
|
|
Gains/losses on the sale or derecognition of assets |
|
|
|
7 |
|
|
|
|
— |
|
|
Gain on sale of equity investments |
|
|
|
(10 |
) |
|
|
|
— |
|
|
Income tax effects |
|
|
|
(149 |
) |
|
|
|
|
(74 |
) |
|
Resolution of income tax matters |
|
|
|
(39 |
) |
|
|
|
— |
|
|
NON-GAAP NET INCOME |
|
$ |
|
1,516 |
|
|
|
$ |
|
1,375 |
|
|
INCOME FROM OPERATIONS |
|
$ |
|
1,337 |
|
|
|
$ |
|
1,214 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
47 |
|
|
|
|
57 |
|
|
Stock-based compensation |
|
|
386 |
|
|
|
|
357 |
|
|
Restructuring charges |
|
|
83 |
|
|
|
|
44 |
|
|
Acquisition-related expense |
|
|
5 |
|
|
|
|
10 |
|
|
Gain on sale or derecognition of assets |
|
|
|
4 |
|
|
|
|
— |
|
|
NON-GAAP INCOME FROM OPERATIONS |
|
$ |
|
1,862 |
|
|
|
$ |
|
1,682 |
|
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
|
(386 |
) |
|
|
|
|
(357 |
) |
|
ADJUSTED OPERATING INCOME (NON-GAAP) |
|
$ |
|
1,476 |
|
|
|
$ |
|
1,325 |
|
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
Effect of foreign currency exchange rate fluctuations |
|
|
|
21 |
|
|
|
|
|
17 |
|
|
CONSTANT CURRENCY ADJUSTED INCOME FROM OPERATIONS (NON-GAAP) |
|
$ |
|
1,497 |
|
|
|
$ |
|
1,342 |
|
|
NET INCOME PER SHARE |
|
$ |
|
5.67 |
|
|
|
$ |
|
4.63 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
|
0.22 |
|
|
|
|
|
0.27 |
|
|
Stock-based compensation |
|
|
|
1.85 |
|
|
|
|
|
1.68 |
|
|
Litigation settlements |
|
|
|
— |
|
|
|
|
|
(0.02 |
) |
|
Restructuring charges |
|
|
|
0.40 |
|
|
|
|
|
0.21 |
|
|
Acquisition-related expense |
|
|
|
0.03 |
|
|
|
|
|
0.05 |
|
|
Gains/losses on the sale or derecognition of assets |
|
|
|
0.03 |
|
|
|
|
|
— |
|
|
Gain on sale of equity investments |
|
|
|
(0.05 |
) |
|
|
|
|
— |
|
|
Income tax effects |
|
|
|
(0.71 |
) |
|
|
|
|
(0.35 |
) |
|
Resolution of income tax matters |
|
|
|
(0.19 |
) |
|
|
|
|
— |
|
|
NON-GAAP NET INCOME PER SHARE |
|
$ |
|
7.25 |
|
|
|
$ |
|
6.46 |
|
|
NET REVENUES |
|
$ |
|
6,572 |
|
|
|
$ |
|
6,268 |
|
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
Effect of foreign currency exchange rate fluctuations |
|
|
30 |
|
|
|
|
|
42 |
|
|
CONSTANT CURRENCY NET REVENUES (NON-GAAP) |
|
$ |
|
6,602 |
|
|
|
$ |
|
6,310 |
|
|
Per share amounts may not add or recalculate due to rounding.
Non-GAAP Financial Measures
To supplement NetApp’s condensed consolidated financial statement information presented in accordance with generally accepted accounting principles in the United States ("GAAP"), NetApp provides investors with certain non-GAAP measures, including, but not limited to, historical non-GAAP operating results, net income and net income per diluted share as management believes that these financial measures provide investors with additional meaningful financial information that should be considered when assessing our underlying business performance and trends. For purposes of internal planning, performance measurement and resource allocation, NetApp’s management uses non-GAAP measures of net income that exclude: (a) amortization of intangible assets, (b) stock-based compensation expenses, (c) litigation settlements, (d) acquisition-related expenses, (e) restructuring charges, (f) asset impairments, (g) gains and losses on the sale or derecognition of assets, (h) gains/losses on the sale of investments in equity securities, (i) debt extinguishment costs, and (j) our GAAP tax provision, but includes a non-GAAP tax provision based upon our projected annual non-GAAP effective tax rate for the first three quarters of the fiscal year and an actual non-GAAP tax provision for the fourth quarter of the fiscal year. NetApp makes additional adjustments to the non-GAAP tax provision for certain tax matters as described below. NetApp’s management uses these non-GAAP measures in making operating decisions because it believes the measurements provide meaningful supplemental information regarding NetApp’s ongoing operational performance. These non-GAAP financial measures are used to: (1) measure company performance against historical results, (2) facilitate comparisons to our competitors’ operating results and (3) allow greater transparency with respect to information used by management in financial and operational decision making. In addition, these non-GAAP financial measures are used to measure company performance for the purpose of determining employee incentive plan compensation.
As described above, NetApp excludes the following items from its non-GAAP measures:
A. Amortization of intangible assets. NetApp records amortization of intangible assets that were acquired in connection with its business combinations. The amortization of intangible assets varies depending on the level of acquisition activity. Management finds it useful to exclude these charges to assess the appropriate level of various operating expenses to assist in budgeting, planning and forecasting future periods and in measuring operational performance.
B. Stock-based compensation expenses. NetApp excludes stock-based compensation expenses from its non-GAAP measures primarily because the amount can fluctuate based on variables unrelated to the performance of the underlying business. While management views stock-based compensation as a key element of our employee retention and long-term incentives, we do not view it as an expense to be used in evaluating operational performance in any given period.
C. Litigation settlements. NetApp may periodically incur charges or benefits related to litigation settlements. NetApp excludes these charges and benefits, when significant, because it does not believe they are reflective of ongoing business and operating results.
D. Acquisition-related expenses. NetApp excludes acquisition-related expenses, including (a) due diligence, legal and other one-time integration charges and (b) write down of assets acquired that NetApp does not intend to use in its ongoing business, from its non-GAAP measures, primarily because they are not related to our ongoing business or cost base and, therefore, are less useful for future planning and forecasting.
E. Restructuring charges. These charges consist of restructuring charges that are incurred based on the particular facts and circumstances of restructuring decisions, including employment and contractual settlement terms, and other related charges, and can vary in size and frequency. We therefore exclude them from our assessment of operational performance.
F. Asset impairments. These are non-cash charges to write down assets when there is an indication that the asset has become impaired. Management finds it useful to exclude these non-cash charges due to the unpredictability of these events in its assessment of operational performance.
G. Gains/losses on the sale or derecognition of assets. These are gains/losses from the sale of our properties and other transactions in which we transfer and/or lose control of assets to a third party. This is inclusive of third-party advisory, legal and other costs that result directly from and are essential to a sale transaction and that would not have been incurred had the decision to sell not been made. Management believes that these transactions do not reflect the results of our underlying, ongoing business and, therefore, are less useful for future planning and forecasting.
H. Gains/losses on the sale of investments in equity securities. These are gains/losses from the sale of our investment in certain equity securities. Typically, such investments are sold as a result of a change in control of the underlying businesses. Management believes that these transactions do not reflect the results of our underlying, on-going business and, therefore, are less useful for future planning and forecasting.
I. Debt extinguishment costs. NetApp excludes certain non-recurring expenses incurred as a result of the early extinguishment of debt. Management believes such nonrecurring costs do not reflect the results of its underlying, on-going business and, therefore, are less useful for future planning and forecasting.
J. Income tax adjustments. NetApp’s non-GAAP tax provision is based upon a projected annual non-GAAP effective tax rate for the first three quarters of the fiscal year and an actual non-GAAP tax provision for the fourth quarter of the fiscal year. The non-GAAP tax provision also excludes, when applicable, (a) tax charges or benefits in the current period that relate to one or more prior fiscal periods that are a result of events such as changes in tax legislation, authoritative guidance, income tax audit settlements, statute lapses and/or court decisions, (b) tax charges or benefits that are attributable to unusual or non-recurring book and/or tax accounting method changes, (c) tax charges that are a result of a non-routine foreign cash repatriation, (d) tax charges or benefits that are a result of infrequent restructuring of the Company’s tax structure, (e) tax charges or benefits that are a result of a change in valuation allowance, and (f) tax charges resulting from the integration of
intellectual property from acquisitions. Management believes that the use of non-GAAP tax provisions provides a more meaningful measure of the Company’s operational performance.
For fiscal 2025, NetApp used constant currency amounts for net revenues and AOI to measure achievement against ICP targets. This constant currency information assumes that the same foreign currency exchange rates used to establish the current year’s ICP targets were also used in translation of current year actual results.
There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, the non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results. Management compensates for these limitations by analyzing current and future results on a GAAP basis as well as a non-GAAP basis and also by providing GAAP measures in our earnings release and prepared remarks. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with generally accepted accounting principles in the United States. The non-GAAP financial measures are meant to supplement, and be viewed in conjunction with, GAAP financial measures. Investors should review the information regarding non-GAAP financial measures provided in our press release and prepared remarks
Appendix A
NETAPP, INC.
EMPLOYEE STOCK PURCHASE PLAN
As Amended And Restated Effective [●], 2025
I. Purpose of the Plan
This Employee Stock Purchase Plan is intended to promote the interests of NetApp, 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 Code Section 423.
Capitalized terms herein shall have the meanings assigned to such terms in the attached Appendix.
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 or other applicable law, including designating separate Offerings under the Plan. Without limiting the generality of the foregoing, the Plan Administrator is specifically authorized to adopt rules and procedures regarding eligibility to participate, the determination of what compensation qualifies as Cash Earnings, handling of the payroll deductions and other additional payments that the Corporation may permit to be made by a Participant to fund the exercise of purchase rights granted pursuant to the Plan, making of contributions to the Plan (including, without limitation, in forms other than payroll deductions), establishment of bank or trust accounts to hold contributions, payment of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of stock certificates that vary with applicable local requirements. Further, without shareholder consent and without limiting Section X.A, the Plan Administrator shall be entitled to change the offering periods, designate separate Offerings, limit the frequency and/or number of changes in the amount withheld during an offering period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the Corporation’s processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly correspond with contribution amounts, and establish such other limitations or procedures as the Plan Administrator determines in its sole discretion advisable that are consistent with the Plan.
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 seventy seven million and seven hundred thousand (77,700,000) shares, inclusive of the number of shares of Common Stock that remain available for issuance under the NetApp, Inc. Employee Stock Purchase Plan as amended of September 13, 2023 (one million one hundred eighty eight thousand five hundred and two shares (1,188,502) shares of Common Stock), subject to adjustment as provided herein.
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 Plan remains in existence.
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 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 (subject to the provisions of Section V.B); provided, however, that the Plan Administrator, in its discretion, from time to time may, prior to a start date of any offering period for all purchase rights for future offering periods, establish (on a uniform and nondiscriminatory basis) waiting periods for participation in future offering periods of not more than two (2) years from the participant’s date of hire. However, an Eligible Employee may participate in only one offering period at a time. Employees who are citizens or residents of a non-U.S. jurisdiction may be excluded from participation in the Plan or an Offering if the participation of such employees is prohibited under the laws of the applicable jurisdiction or if complying with the laws of the applicable jurisdiction would cause the Plan or an Offering to violate Code Section 423.
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 an on-line enrollment process in a uniform and non-discriminatory basis prescribed by the Plan Administrator or 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 seventh (7th) business day prior to the start date of the applicable offering period or the date established by the Plan Administrator on or prior to that offering period in a uniform and non-discriminatory basis.
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, except as may be required by applicable law, as determined by the Corporation, and if so required, will apply to all Participants in the relevant Offering, except to the extent otherwise permitted by U.S. Treasury Regulation Section 1.423-2(f). 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, except under Offerings in which applicable local law requires that amounts collected from the Participants be segregated from the Corporation’s general corporate funds and/or deposited with an independent third party for Participants in non-U.S. jurisdictions.
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. For purposes of the Plan, the Plan Administrator may designate separate Offerings under the Plan (the terms of which need not be identical) in which Eligible Employees will participate, even if the dates of the applicable offering periods of each such Offering are identical.
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 not be less than eighty-five percent (85%) of the lesser of (i) the Fair Market Value per share of Common Stock at the time such purchase right is granted 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. 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, or implement, 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 promptly refunded to Participant after each Purchase Date.
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 completing an on-line withdrawal process in a uniform and non-discriminatory basis prescribed by the Plan Administrator or by filing the appropriate form with the Plan Administrator (or its designate) at any time on or before the seventh (7th) business day prior to the next scheduled Purchase Date in the offering period (unless such timing restriction is prohibited under the laws of the applicable jurisdiction), and no further payroll deductions shall be collected from the Participant with respect to that offering period; provided, however, that the Plan Administrator, in its discretion, from time to time may, prior to a start date of any offering period for all purchase rights for future offering periods, establish (on a uniform and nondiscriminatory basis) a different date for effective withdrawals from the Plan. Any payroll deductions collected during the Purchase Interval in which such timely withdrawal occurs shall be refunded as soon as possible and no shares will be purchased on behalf of such Participant on the next Purchase Date, and if such withdrawal is not timely made, and subject to the laws of the applicable jurisdiction, any payroll deductions collected during the Purchase Interval will be used to purchase shares on the next Purchase Date on behalf of such Participant.
(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 completing an on-line enrollment process in a manner prescribed by the Plan Administrator or by making a timely filing of the prescribed enrollment forms) on or before the seventh (7th) business day prior to the start date of the applicable offering period or the date determined by the Plan Administrator pursuant to Section V 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. A Participant’s purchase right shall not terminate during any notice of termination period (e.g., garden leave, etc.) through the effective date of the Participant’s termination of employment as set forth in the notice, whether or not the Participant is providing active service to the Corporation. 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 seventh (7th) business day prior to the Purchase Interval in which such leave commences (unless such timing restriction is prohibited under the laws of the applicable jurisdiction), to withdraw all the payroll deductions collected to date on his or her behalf for that Purchase Interval.
In no event, however, shall any further payroll deductions be collected on the Participant’s behalf during such leave; provided, however, that payroll deductions on the Participant’s behalf may be collected for amounts paid during such leave for services rendered by the Participant prior to his or her leave. Upon the Participant’s return to active service (i) within three (3) months 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 completing an on-line enrollment process in a manner prescribed by the Plan Administrator or making a timely filing of the prescribed enrollment forms) on or before the seventh (7th) business day prior to the start date of the applicable offering period or the date determined by the Plan Administrator pursuant to Section V 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%) (or such other percentage (which shall not be below eighty-five percent (85%) the Administrator set for the purchase price per share for the applicable Offering Period pursuant to Section V hereof) of the lesser 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 commercially reasonable 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, otherwise than by will or the laws of descent and distribution.
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 July 18, 2025 and was subsequently approved by the shareholders and became effective at the Effective Time.
B. Unless sooner terminated by the Board, the Plan shall terminate upon the earliest of (i) 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 (ii) 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.
C. 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.
X. Amendment of the Plan
A. The Board may alter, amend, suspend, terminate or discontinue the Plan at any time to become effective immediately following the close of any Purchase Interval. To the extent necessary to comply with Code Section 423 (or any successor rule or provision or any other applicable law, regulation or stock exchange rule), the Corporation shall obtain shareholder approval in such a manner and to such a degree as required. 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.
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.
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 Corporations 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 Corporations 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 have the meaning set forth in the Corporation’s 2021 Equity Incentive Plan, as it may be amended and restated from time to time.
E. Code shall mean the Internal Revenue Code of 1986, as amended.
F. Common Stock shall mean the Corporation’s common stock.
G. Compensation Committee shall mean the Talent and Compensation Committee of the Board, as its name may be changed from time to time, or any successor or predecessor thereto.
H. 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.
I. Corporation shall mean NetApp, Inc., a Delaware corporation, and any corporate successor to all or substantially all of the assets or voting stock of NetApp, Inc. which shall by appropriate action adopt the Plan.
J. Effective Time shall mean [●], 2025.
K. Eligible Employee shall mean any person who is employed by a Participating Corporation 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), or any lesser number of hours per week and/or number of months in any calendar year established by the Plan Administrator (if required under applicable local law) for purposes of any separate Offering.
L. Fair Market Value shall mean, as of any date: If the Common Stock is listed on a national securities exchange or interdealer quotation system, the closing sale price of a share of Common Stock as reported on such exchange or system for that date, or if there is no reported sale on that date, the closing sale price on the last preceding date on which a sale was reported;
(i)If the Common Stock is not listed on any such exchange or system but is quoted over-the-counter, the average of the highest bid and lowest asked prices for a share of Common Stock on the relevant date, as reported by such over-the-counter quotation service as the Committee may select; or
(ii)If there is no established public trading market for the Common Stock, the value determined in good faith by the Committee using a reasonable application of a reasonable valuation method, in accordance with Code Section 409A, and considering all relevant facts and circumstances, including any recent arm’s-length transactions involving the Company’s equity securities.
M. 1933 Act shall mean the Securities Act of 1933, as amended.
N. Offering means an offer under the Plan of a purchase right that may be exercised during an offering period as further described in Section VII. For purposes of the Plan, the Plan Administrator may designate separate Offerings under the Plan (the terms of which need not be identical) in which Eligible Employees will participate, even if the dates of the applicable offering periods of each such Offering are identical.
O. Participant shall mean any Eligible Employee of a Participating Corporation who is actively participating in the Plan.
P. 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.
Q. Plan shall mean the Corporation’s Employee Stock Purchase Plan, as set forth in this document.
R. Plan Administrator shall mean the committee of two (2) or more Board members appointed by the Board to administer the Plan.
S. Purchase Date shall mean the last business day of each Purchase Interval.
T. 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.
* * *
Appendix B
NETAPP, INC.
2021 EQUITY INCENTIVE PLAN
As Amended Effective [●], 2025
1. Purposes of the Plan. The purposes of this Plan are:
•to attract and retain the best available personnel for positions of substantial responsibility,
•to provide additional incentive to Employees, Directors and Consultants, and
•to promote the success of the Company’s business.
The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units and Performance Awards.
2. Definitions. As used herein, the following definitions will apply:
2.1 "Administrator" means the Board or any of its Committees as will be administering the Plan, in accordance with Section 4 of the Plan.
2.2 "Applicable Laws" means the legal and regulatory requirements relating to the administration of equity-based awards, including but not limited to the related issuance of shares of Common Stock, including but not limited to, under U.S. federal and state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any non-U.S. country or jurisdiction where Awards are, or will be, granted under the Plan.
2.3 "Award" means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, or Performance Awards.
2.4 "Award Agreement" means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.
2.5 "Board" means the Board of Directors of the Company.
2.6 "Change in Control" means the occurrence of any of the following events:
(a) Change in Ownership of the Company. A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group ("Person"), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than fifty percent (50%) of the total voting power of the stock of the Company; provided, however, that for purposes of this subsection (a), the acquisition of additional stock by any one Person, who is considered to own more than fifty percent (50%) of the total voting power of the stock of the Company will not be considered a Change in Control. Further, if the stockholders of the Company immediately before such change in ownership continue to retain immediately after the change in ownership, in substantially the same proportions as their ownership of shares of the Company’s voting stock immediately prior to the change in ownership, direct or indirect beneficial ownership of fifty percent (50%) or more of the total voting power of the stock of the Company or of the ultimate parent entity of the Company, such event will not be considered a Change in Control under this subsection (a). For this purpose, indirect beneficial ownership will include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company, as the case may be, either directly or through one or more subsidiary corporations or other business entities; or
(b) Change in Effective Control of the Company. A change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of this subsection (b), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or
(c) Change in Ownership of a Substantial Portion of the Company’s Assets. A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such Person or Persons) assets from the Company that have a total gross fair market value equal to or more than fifty percent (50%) of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that for purposes of this subsection (c), the following will not constitute a change in the ownership of a substantial portion of the Company’s assets: (i) a transfer to an entity that is controlled by the Company’s stockholders immediately after the transfer, or (ii) a transfer of assets by the Company to: (A) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock, (B) an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (C) a Person, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the Company, or (D) an entity, at least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a Person described in this subsection (c)(ii)(C). For purposes of this subsection (c), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
For purposes of this Section 2.6, persons will be considered to be acting as a group under the rules, regulations and guidance set forth by the U.S. Securities and Exchange Commission.
Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Section 409A.
Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (x) its primary purpose is to change the jurisdiction of the Company’s incorporation, or (y) its primary purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.
2.7 "Code" means the U.S. Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code or regulation thereunder will include such section or regulation, any valid regulation or other formal guidance of general or direct applicability promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.
2.8 "Committee" means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board, or by a duly authorized committee of the Board, in accordance with Section 4 of the Plan.
2.9 "Common Stock" means the common stock of the Company.
2.10 "Company" means NetApp, Inc., a Delaware corporation, or any successor thereto.
2.11 "Consultant" means any natural person, including an advisor, engaged by the Company or any of its Parent or Subsidiaries to render bona fide services to such entity, provided the services (a) are not in connection with the offer or sale of securities in a capital-raising transaction, and (b) do not directly promote or maintain a market for the Company’s securities, in each case, within the meaning of Form S-8 promulgated under the Securities Act, and provided further, that a Consultant will include only those persons to whom the issuance of Shares may be registered under Form S-8 promulgated under the Securities Act.
2.12 "Director" means a member of the Board.
2.13 "Disability" means that a Participant is unable to carry out the responsibilities and functions of the position held by the Participant by reason of any medically determinable physical or mental impairment that (x) can be expected to result in death and/or (y) has lasted for a period of not less than twelve (12) consecutive months and can reasonably be expected to continue for at least an additional twelve (12) months. A Participant will not be considered to have incurred a Disability unless the Participant furnishes proof of such impairment sufficient to satisfy the Company in its discretion. Notwithstanding the foregoing, however, in the case of any Award that is subject to Section 409A and is payable upon a Participant’s Disability, the Participant shall be treated as having a Disability only if the Participant’s condition also satisfies the definition of "disability" in Treas. Reg. § 1.409A-3(i)(4).
2.14 "Dividend Equivalent" means a credit, payable in cash or Shares, made at the discretion of the Administrator or as otherwise provided in the Plan, to the account of a Participant in an amount equal to the cash dividends paid on one Share for each Share represented by an Award held by such Participant. Subject to the provisions of Section 6, Dividend Equivalents may be subject to the same vesting restrictions as the related Shares subject to an Award, at the discretion of the Administrator and in no event will be paid out on any unvested related Shares subject to an Award or on any Shares subject to unexercised Options or Stock Appreciation Rights.
2.15 "Employee" means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute "employment" by the Company.
2.16 "Exchange Act" means the U.S. Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder.
2.17 "Exchange Program" means a program under which (a) outstanding Awards are surrendered or cancelled in exchange for awards of the same type (which may have higher or lower exercise prices and different terms), awards of a different type, and/ or cash; (b) Participants would have the opportunity to transfer any outstanding Awards to a financial institution or other person or entity selected by the Administrator; and/or (c) the exercise price of an outstanding Award is reduced or increased. The Administrator cannot implement an Exchange Program.
2.18 "Fair Market Value" means, as of any date and unless the Administrator determines otherwise, the value of Common Stock determined as follows:
(a) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the New York Stock Exchange or the Nasdaq Global Select Market, the Nasdaq Global Market, or the Nasdaq Capital Market of The Nasdaq Stock Market, its Fair Market Value will be the closing sales price for such stock (or, if no closing sales price was reported on that date, as applicable, on the last Trading Day such closing sales price was reported) as quoted on such exchange or system on the date of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
(b) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share will be the mean between the high bid and low asked prices for the Common Stock on the day of determination (or, if no bids and asks were reported on that date, as applicable, on the last Trading Day such bids and asks were reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or
(c) In the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Administrator.
In addition, for purposes of determining the fair market value of shares for any reason other than the determination of the exercise price of Options or Stock Appreciation Rights, fair market value will be determined by the Administrator in a manner compliant with Applicable Laws and applied consistently for such purpose. The methodology and determination of fair market value for purposes of tax withholding may be made in the Administrator’s sole discretion subject to Applicable Laws and is not required to be consistent with the determination of fair market value for other purposes.
2.19 "Fiscal Year" means the fiscal year of the Company.
2.20 "Incentive Stock Option" means an Option that by its terms qualifies and is otherwise intended to qualify as an incentive stock option within the meaning of Code Section 422 and the regulations promulgated thereunder.
2.21 "Inside Director" means a Director who is an Employee.
2.22 "Nonstatutory Stock Option" means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.
2.23 "Officer" means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
2.24 "Option" means a stock option granted pursuant to the Plan.
2.25 "Outside Director" means a Director who is not an Employee.
2.26 "Parent" means a "parent corporation," whether now or hereafter existing, as defined in Code Section 424(e).
2.27 "Participant" means the holder of an outstanding Award.
2.28 "Performance Awards" means an Award which may be earned in whole or in part upon attainment of performance goals or other vesting criteria as the Administrator may determine and which may be cash- or stock-denominated and may be settled for cash, Shares or other securities or a combination of the foregoing under Section 11 of the Plan.
2.29 "Performance Period" means Performance Period as defined in Section 11.1 of the Plan.
2.30 "Period of Restriction" means the period (if any) during which the transfer of Shares of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, continued service, the achievement of target levels of performance, the achievement of performance goals, or the occurrence of other events as determined by the Administrator.
2.31 "Plan" means this 2021 Equity Incentive Plan, as may be amended from time to time.
2.32 "Restricted Stock" means Shares issued pursuant to an Award of Restricted Stock under Section 9 of the Plan, or issued pursuant to the early exercise of an Option.
2.33 "Restricted Stock Unit" means a bookkeeping entry representing an amount equal to the Fair Market Value of one Share, granted pursuant to Section 10 of the Plan. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company.
2.34 "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan.
2.35 "Section 16b" means Section 16(b) of the Exchange Act.
2.36 "Section 409A" means Code Section 409A and the U.S. Treasury Regulations and guidance thereunder, and any applicable state law equivalent, as each may be promulgated, amended or modified from time to time.
2.37 "Securities Act" means the U.S. Securities Act of 1933, as amended, including the rules and regulations promulgated thereunder.
2.38 "Service Provider" means an Employee, Director or Consultant.
2.39 "Share" means a share of the Common Stock, as adjusted in accordance with Section 16 of the Plan.
2.40 "Stock Appreciation Right" means an Award, granted alone or in connection with an Option, that pursuant to Section 8 of the Plan is designated as a Stock Appreciation Right.
2.41 "Subsidiary" means a "subsidiary corporation," whether now or hereafter existing, as defined in Code Section 424(f).
2.42 "Trading Day" means a day that the primary stock exchange, national market system, or other trading platform, as applicable, upon which the Common Stock is listed (or otherwise trades regularly, as determined by the Administrator, in its sole discretion) is open for trading.
2.43 "U.S. Treasury Regulations" means the Treasury Regulations of the Code. Reference to a specific Treasury Regulation or Section of the Code will include such Treasury Regulation or Section, any valid regulation promulgated under such Section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such Section or regulation.
3. Stock Subject to the Plan.
3.1 Stock Subject to the Plan. Subject to adjustment upon changes in capitalization of the Company as provided in Section 16 of the Plan, the maximum aggregate number of Shares that may be subject to Awards and issued under the Plan will be equal to 30,715,221 Shares (the "Share Limit"). In addition, Shares may become available for issuance under Section 3.2 of the Plan. The Shares may be authorized but unissued, or reacquired Common Stock.
3.2 Lapsed Awards. If an Award expires or becomes unexercisable without having been exercised in full, or, with respect to Restricted Stock, Restricted Stock Units, or Performance Awards is forfeited to or repurchased by the Company due to the failure to vest, the unpurchased Shares (or for Awards other than Options or Stock Appreciation Rights the forfeited or repurchased Shares) which were subject thereto will become available for future grant or sale under the Plan (unless the Plan has terminated). Upon exercise of a Stock Appreciation Right settled in Shares, the gross number of Shares covered by the portion of the Award so exercised, whether or not actually issued pursuant to such exercise will cease to be available under the Plan. Shares that actually have been issued under the Plan under any Award will not be returned to the Plan and will not become available for future distribution under the Plan; provided, however, that if Shares issued pursuant to Awards of Restricted Stock, Restricted Stock Units or Performance Awards are forfeited to or repurchased by the Company due to the failure to vest, such Shares will become available for future grant under the Plan. Shares used to pay the exercise price of an Award or Shares repurchased by the
Company using Option exercise proceeds and previously issued Shares tendered by the Participant to satisfy tax liabilities or withholdings related to an Award will not become available for future grant or sale under the Plan. Shares that are withheld by the Company to satisfy the tax liabilities or withholdings related to an Award other than an Option, Stock Appreciation Right or Restricted Stock Award will become available for future grant or sale under the Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan. Notwithstanding the foregoing and, subject to adjustment as provided in Section 16 of the Plan, the maximum number of Shares that may be issued upon the exercise of Incentive Stock Options will equal the aggregate Share number stated in Section 3.1 of the Plan, plus, to the extent allowable under Code Section 422 and the U.S. Treasury Regulations promulgated thereunder, any Shares that become available for issuance under the Plan pursuant to Section 3.2 of the Plan.
3.3 Share Reserve. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as will be sufficient to satisfy the requirements of the Plan.
4. Administration of the Plan.
4.1 Procedure.
(a) Multiple Administrative Bodies. Different Committees with respect to different groups of Service Providers may administer the Plan.
(b) Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the requirements for exemption under Rule 16b-3.
(c) Other Administration. Other than as provided above, the Plan will be administered by (A) the Board or (B) a Committee, which Committee will be constituted to comply with Applicable Laws.
(d) Delegation of Authority for Day-to-Day Administration. Except to the extent prohibited by Applicable Law, the Administrator may delegate to one or more individuals the day-to-day administration of the Plan and any of the functions assigned to it in this Plan (including for the avoidance of the doubt, the ability to grant Awards under the Plan). Such delegation may be revoked at any time.
4.2 Powers of the Administrator. Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator will have the authority, in its discretion:
(a) to determine the Fair Market Value;
(b) to select the Service Providers to whom Awards may be granted hereunder;
(c) to determine the number of Shares or dollar amounts to be covered by each Award granted hereunder;
(d) to approve forms of Award Agreements for use under the Plan;
(e) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto (including but not limited to, temporarily suspending the exercisability of an Award if the Administrator deems such suspension to be necessary or appropriate for administrative purposes or to comply with Applicable Laws, provided that such suspension must be lifted prior to the expiration of the maximum term and post-termination exercisability period of an Award), based in each case on such factors as the Administrator will determine;
(f) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;
(g) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of facilitating compliance with applicable non-U.S. laws, easing the administration of the Plan and/or for qualifying for favorable tax treatment under applicable non-U.S. laws, in each case as the Administrator may deem necessary or advisable;
(h) to modify or amend each Award (subject to Section 6 and Section 21.3 of the Plan), including but not limited to the discretionary authority to extend the post-termination exercisability period of Awards (subject to Sections 6.1(b), 7.4 and 8.5 of the Plan);
(i) to allow Participants to satisfy withholding tax obligations in a manner prescribed in Section 17 of the Plan;
(j) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator;
(k) to determine whether Awards (other than Options or Stock Appreciation Rights) will be adjusted for Dividend Equivalents;
(l) to allow a Participant to defer the receipt of the payment of cash or the delivery of Shares that otherwise would be due to such Participant under an Award; and
(m) to make all other determinations deemed necessary or advisable for administering the Plan.
4.3 Effect of Administrator’s Decision. The Administrator’s decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards and will be given the maximum deference permitted by Applicable Laws.
5. Eligibility. Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, or Performance Awards may be granted to Service Providers. Incentive Stock Options may be granted only to Employees.
6. Limitations.
6.1 Incentive Stock Options.
(a) $100,000 Limitation. Notwithstanding any designation of an Option as an incentive stock option, to the extent that the aggregate fair market value of the Shares with respect to which incentive stock options are exercisable for the first time by the Participant during any calendar year
(under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options will be treated as nonstatutory stock options. For purposes of this Section 6.1(a), Incentive Stock Options will be taken into account in the order in which they were granted, the fair market value of the Shares will be determined as of the time the Option with respect to such Shares is granted, and calculations will be performed in accordance with Code Section 422 and the U.S. Treasury Regulations promulgated thereunder.
(b) Maximum Option Term. In the case of an Incentive Stock Option, the term will be ten (10) years from the date of grant or such shorter term as may be provided in the Award Agreement. Moreover, in the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company, the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement.
(c) Option Exercise Price. In the case of an Incentive Stock Option granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company, the per Share exercise price will be no less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant.
6.2 Exchange Program. The Administrator cannot institute an Exchange Program.
6.3 Outside Director Limitations. No Outside Director may be paid, issued or granted, in any calendar year, cash retainer fees and Awards (whether settled in cash or stock) with an aggregate value of more than $1,000,000 (with the value of each Award based on its grant date fair value (determined in accordance with U.S. generally accepted accounting principles)). Any cash compensation paid or Awards granted to an individual while he or she was an Employee, or while he or she was a Consultant but not an Outside Director, will not count for purposes of the limitations under this Section 6.3. The foregoing limitations will be adjusted proportionately in connection with any change in the Company’s capitalization as described in Section 16.1.
6.4 Dividend Payments. Dividends or other distributions payable with respect to Shares subject to Awards (including Dividend Equivalents) will not be paid before and unless the underlying Shares vest, and will be subject to the same forfeitability provisions as the underlying Shares. No dividends or other distributions will be paid with respect to Shares that are subject to unexercised Options or Stock Appreciation Rights, provided that nothing in this Section 6.4 shall preclude the Administrator from exercising its powers and authority under Section 16.
6.5 Holding Period Condition.
(a) Applicability. Any Shares issued to a Participant then designated as a "named executive officer" (within the meaning of Item 402 of Regulation S-K promulgated under the Securities Act) pursuant to the exercise or vesting of an Award and the issuance and settlement of such Shares (after being reduced for such Shares sold or withheld to cover the exercise price of the Award, if any, and applicable tax withholding obligations) will be subject to the Holding Period Condition.
(b) Definition. "Holding Period Condition" means that, with respect to certain Shares received following the exercise or vesting of an Award and the issuance and settlement of such Shares, such Shares may not be sold, transferred, hypothecated, pledged, or otherwise disposed of before the earliest of: (i) the twelve (12) month anniversary of the exercise or settlement date of such Shares; (ii) a Change in Control; (iii) the date Participant ceases to be a Service Provider due to Participant’s death or Disability; or (iv) the date Participant is no longer designated as a "named executive officer"); provided, however, Participant may conduct transactions that involve merely a change in the form in which Participant owns such Shares (for example, the transfer of the Shares to an inter vivos trust for which Participant is the beneficiary during Participant’s lifetime). For purposes of clarification, the time period for satisfying the Holding Period Condition with respect to shares acquired pursuant to the exercise of an Option or Stock Appreciation Right will commence upon the date the Award is exercised and the Shares delivered, and not upon the vesting of the Award. Further, in no event will the commencement date for satisfying the Holding Period Condition occur prior to the date the Award has vested. To enforce the Holding Period Condition, the Company, in its discretion, may take any action it determines reasonable or necessary, including attaching applicable legends on the Shares, or transferring the Shares to an escrow account or captive broker, which, in either case, is selected by the Company, and which conditions will expire once the Holding Period Condition is satisfied in accordance with the preceding sentence.
7. Stock Options.
7.1 Grant of Options. Subject to the terms and conditions of the Plan, the Administrator, at any time and from time to time, may grant Options to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.
7.2 Option Agreement. Each Award of an Option will be evidenced by an Award Agreement that will specify the exercise price, the term of the Option, the number of Shares subject to the Option, the exercise restrictions, if any, applicable to the Option, and such other terms and conditions as the Administrator, in its sole discretion, will determine.
7.3 Limitations. Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
7.4 Term of Option. Subject to the provisions of Section 6.1 relating to Incentive Stock Options, the term of each Option will be stated in the Award Agreement; provided, however, that the term will be no more than seven (7) years from the date of grant thereof.
7.5 Option Exercise Price and Consideration.
(a) Exercise Price. The per Share exercise price for the Shares to be issued pursuant to the exercise of an Option will be determined by the Administrator, but will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant, subject to the provisions of Section 6.1 relating to Incentive Stock Options. Notwithstanding the foregoing provisions of this Section 7.5(a), Options may be granted with a per Share exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Code Section 424(a).
(b) Waiting Period and Exercise Dates. At the time an Option is granted, the Administrator will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied before the Option may be exercised.
(c) Form of Consideration. The Administrator will determine the acceptable form of consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration at the time of grant. Such consideration may consist entirely of: (a) cash (including cash equivalents); (b) check; (c) other Shares, provided that such Shares have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option will be exercised and provided further that accepting such Shares will not result in any adverse accounting consequences to the Company, as the Administrator determines in its sole discretion; (d) consideration received by the Company under a cashless exercise program (whether through a broker or otherwise) implemented by the Company in connection with the Plan; (e) by net exercise; (f) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws; or (g) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator will consider if acceptance of such consideration may be reasonably expected to benefit the Company. Notwithstanding anything in this Section 7.5(c) to the contrary, in no event may the exercise price of an Option be satisfied pursuant to a promissory note.
7.6 Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder will be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share.
An Option will be deemed exercised when the Company receives: (a) notice of exercise (in such form as the Administrator may specify from time to time) from the person entitled to exercise the Option, and (b) full payment for the Shares with respect to which the Option is exercised (together with any applicable tax withholdings). Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or, if requested by the Participant, in the name of the Participant and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Shares subject to an Option, notwithstanding the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 16 of the Plan.
Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Relationship as a Service Provider. The termination of Participant’s status as a Service Provider means (a) in the case of an Employee, a cessation of the employee-employer relationship between an Employee and the Company or any Parent or Subsidiary for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, Disability, or the disaffiliation of an Affiliate, but excluding any such termination where there is a simultaneous reemployment by the Company or any Parent or Subsidiary or where there is a change in status from Employee to Outside Director or change in status from Employee to Consultant; (b) in the case of a Consultant, a cessation of the service relationship between a Consultant and the Company or any Parent or Subsidiary for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, or Disability, but excluding any such termination where there is a simultaneous re-engagement of the consultant by the Company or any Parent or Subsidiary or where there is a change in status from Consultant to Employee or Outside Director; and (c) in the case of an Outside Director, a cessation of the Outside Director’s service on the Board for any reason but excluding any such termination where there is a change in status from Outside Director to Employee or a change in status from Outside Director to Consultant. Notwithstanding the foregoing, to the extent that termination of a Participant’s status as a Service Provider is used to establish a payment event with respect to any Award subject to Section 409A of the Code, such "termination of a Participant’s status as a Service Provider" (or terms of similar import) shall have the same meaning as "separation from service" as that term is defined in Section 409A of the Code and the applicable guidance issued by the Secretary of the Treasury thereunder.
(c) Termination Other Than Death or Disability. If a Participant ceases to be a Service Provider, other than upon such cessation as the result of the Participant’s death or Disability, the Participant may exercise his or her Option within three (3) months of such cessation, or such shorter or longer period of time, as is specified in the Award Agreement, in no event later than the expiration of the term of such Option as set forth in the Award Agreement or Section 7.4 of the Plan. However, unless otherwise provided by the Administrator or set forth in the Award Agreement or other written agreement authorized by the Administrator between the Participant and the Company or any of its Subsidiaries or Parents, as applicable, if on such date of cessation the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan immediately. If after such cessation the Participant does not exercise his or her Option within the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
(d) Disability of Participant. If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Option within twelve (12) months of cessation, or such longer or shorter period of time as is specified in the Award Agreement (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement or Section 7.4 of the Plan, as applicable). However, unless otherwise provided by the Administrator or set forth in the Award Agreement or other written agreement authorized by the Administrator between the Participant and the Company or any of its Subsidiaries or Parents, as applicable, if on the date of cessation the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan immediately. If after such cessation the Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
(e) Death of Participant. If a Participant dies while a Service Provider, the Option may be exercised within twelve (12) months following the Participant’s death, or within such longer or shorter period of time as is specified in the Award Agreement (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement or Section 7.4 of the Plan, as applicable), by the Participant’s designated beneficiary, provided such beneficiary has been designated prior to the Participant’s death in a form (if any) acceptable to the Administrator. If the Administrator has not permitted the designation of a beneficiary or if no such beneficiary has been designated by the Participant, then such Option may be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred pursuant to the Participant’s will or in accordance with the laws of descent and distribution (each, a "Legal Representative"). If the Option is exercised pursuant to this Section 7.6(e), Participant’s designated beneficiary or Legal Representative shall be subject to the terms of this Plan and the Award Agreement, including but not limited to the restrictions on transferability and forfeitability
applicable to the Service Provider. However, unless otherwise provided by the Administrator or set forth in the Award Agreement or other written agreement authorized by the Administrator between the Participant and the Company or any of its Subsidiaries or Parents, as applicable, if at the time of death Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan immediately. If the Option is not so exercised within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
(f) Tolling Expiration. A Participant’s Award Agreement also may provide that:
i. if the exercise of the Option following the cessation of Participant’s status as a Service Provider (other than upon the Participant’s death or Disability) would result in liability under Section 16b, then the Option will terminate on the earlier of (i) the expiration of the term of the Option set forth in the Award Agreement, or (ii) the tenth (10th) day after the last date on which such exercise would result in liability under Section 16b; or
ii. if the exercise of the Option following the cessation of the Participant’s status as a Service Provider (other than upon the Participant’s death or Disability) would be prohibited at any time solely because the issuance of Shares would violate the registration requirements under the Securities Act, then the Option will terminate on the earlier of (i) the expiration of the term of the Option, or (ii) the expiration of a period of thirty (30) days after the cessation of the Participant’s status as a Service Provider during which the exercise of the Option would not be in violation of such registration requirements.
8. Stock Appreciation Rights.
8.1 Grant of Stock Appreciation Rights. Subject to the terms and conditions of the Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion.
8.2 Number of Shares. The Administrator will have complete discretion to determine the number of Shares subject to any Award of Stock Appreciation Rights.
8.3 Exercise Price and Other Terms. The per Share exercise price for the Shares that will determine the amount of the payment to be received upon exercise of a Stock Appreciation Right as set forth in Section 8.6 of the Plan will be determined by the Administrator and will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. Otherwise, the Administrator, subject to the provisions of the Plan, will have complete discretion to determine the terms and conditions of Stock Appreciation Rights granted under the Plan.
8.4 Stock Appreciation Right Agreement. Each Stock Appreciation Right grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the Stock Appreciation Right, the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will determine.
8.5 Expiration of Stock Appreciation Rights. A Stock Appreciation Right granted under the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 7.4 of the Plan relating to the maximum term and Section 7.6 of the Plan relating to exercise also will apply to Stock Appreciation Rights.
8.6 Payment of Stock Appreciation Right Amount. Upon exercise of a Stock Appreciation Right, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying:
(a) The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times
(b) The number of Shares with respect to which the Stock Appreciation Right is exercised.
At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may be in cash, in Shares of equivalent value, or in some combination thereof.
9.Restricted Stock.
9.1 Grant of Restricted Stock. Subject to the terms and conditions of the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.
9.2 Restricted Stock Agreement. Subject to the terms and conditions of the Plan, each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction (if any), the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of Restricted Stock until the restrictions on such Shares have lapsed. The Administrator, in its sole discretion, may determine that an Award of Restricted Stock will not be subject to any Period of Restriction and consideration for such Award is paid for by past services rendered as a Service Provider.
9.3 Transferability. Except as provided in this Section 9 or as the Administrator determines, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.
9.4 Other Restrictions. The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.
9.5 Removal of Restrictions. Except as otherwise provided in this Section 9, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of any Period of Restriction or at such other time as the Administrator may determine. The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed.
9.6 Voting Rights. During any applicable Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.
9.7 Dividends and Other Distributions. During any applicable Period of Restriction, and subject to Section 6.4, Service Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such Shares, unless the
Administrator provides otherwise. If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid.
9.8 Return of Restricted Stock to Company. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company, and subject to Section 3, again will be available for grant under the Plan.
10. Restricted Stock Units.
10.1 Grant. Restricted Stock Units may be granted at any time and from time to time as determined by the Administrator. After the Administrator determines that it will grant Restricted Stock Units, it will advise the Participant in an Award Agreement of the terms, conditions, and restrictions related to the grant, including the number of Restricted Stock Units.
10.2 Vesting Criteria and Other Terms. The Administrator will set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant. The Administrator may set vesting criteria based upon the achievement of Company-wide, divisional, business unit, or individual goals (including, but not limited to, continued employment or service), applicable federal or state securities laws, or any other basis determined by the Administrator in its discretion.
10.3 Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout as determined by the Administrator. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Administrator, in its sole discretion, may modify or waive any vesting criteria that must be met to receive a payout.
10.4 Form and Timing of Payment. Payment of earned Restricted Stock Units will be made at the time(s) determined by the Administrator and set forth in the Award Agreement. The Administrator, in its sole discretion, may settle earned Restricted Stock Units in cash, Shares, or a combination of both.
10.5 Cancellation. On the date set forth in the Award Agreement, all unearned Restricted Stock Units will be forfeited to the Company, and subject to Section 3, again will be available for grant under the Plan.
11. Performance Awards.
11.1 Award Agreement. Each Performance Award will be evidenced by an Award Agreement that will specify any time period during which any performance objectives or other vesting provisions will be measured ("Performance Period"), and such other terms and conditions as the Administrator determines. Each Performance Award will have an initial value that is determined by the Administrator on or before its date of grant.
11.2 Objectives or Vesting Provisions and Other Terms. The Administrator will set any objectives or vesting provisions that, depending on the extent to which any such objectives or vesting provisions are met, will determine the value of the payout for the Performance Awards. The Administrator may set vesting criteria based upon the achievement of Company-wide, divisional, business unit, or individual goals, including, but not limited to: (i) earnings per share of the Company’s common stock, adjusted for any stock split, stock dividend or other recapitalization, (ii) earnings measures, (iii) operating cash flow, (iv) operating income, (iv) gross, operating or profit margin, (v) profit after tax, (vi) profit before tax, (vii) return on assets, (viii) return on equity, (ix) return on sales, (x) return on capital, (xi) revenue, (xii) annual revenue run rate, (xiii) return on operating revenue, (xiv) total shareholder return, (xv) share price performance, as adjusted for any stock split, stock dividend or other recapitalization, (xvi) product, service and brand recognition/acceptance, (xvii) customer satisfaction, (xviii) productivity, (xix) expense targets, (xx) market share, (xxi) cost control measures, (xxii) balance sheet metrics, (xxiii) cash, (xxiv) cash equivalents, (xxv) investments, (xxvi) billings), (xxvii) strategic initiatives; (xxviii) environmental, social and governance goals, (xxix) human capital goals (in line with the current priorities of the Company at the applicable time of setting such goal), as well any derivations of the foregoing (e.g., income shall include pre-tax income, net income, operating income, etc.), and (xxx) individual objectives such as peer reviews or other subjective or objective criteria.
11.3 Earning Performance Awards. After an applicable Performance Period has ended, the holder of a Performance Award will be entitled to receive a payout for the Performance Award earned by the Participant over the Performance Period in accordance with the terms and conditions applicable to such Performance Award. The Administrator, in its discretion, may reduce or waive any performance objectives or other vesting provisions for such Performance Award.
11.4 Form and Timing of Payment. Payment of earned Performance Awards will be made at the time(s) determined by the Administrator and set forth in the Award Agreement. The Administrator, in its sole discretion, may settle earned Performance Awards in cash, Shares, or a combination of both.
11.5 Cancellation of Performance Awards. On the date set forth in the Award Agreement, all unearned or unvested Performance Awards will be forfeited to the Company, and subject to Section 3, again will be available for grant under the Plan.
12. Dividend Equivalents. The Administrator, in its discretion, may provide in the Award Agreement evidencing any Award that the Participant will be entitled to receive Dividend Equivalents with respect to the payment of cash dividends on Shares having a record date prior to the date on which the Awards are settled or forfeited. Subject to the limitations contained in Section 6, the Dividend Equivalents, if any, will be credited to an Award in such manner and subject to such terms and conditions as determined by the Administrator in its sole discretion. In the event of a dividend or distribution paid in Shares or any other adjustment made upon a change in the capital structure of the Company as described in Section 16, appropriate adjustments will be made to the Awards so that it represents the right to receive upon settlement any and all new, substituted or additional securities or other property (other than normal cash dividends) to which the Participant would be entitled by reason of the consideration issuable upon settlement of the Awards, and all such new, substituted or additional securities or other property will be immediately subject to the same vesting and settlement conditions as are applicable to the Award.
13. Compliance With Section 409A. The Plan and each Award Agreement under the Plan is intended to be exempt from or meet the requirements of Section 409A and will be construed and interpreted in accordance with such intent (including with respect to any ambiguities or ambiguous terms), except as otherwise determined in the sole discretion of the Administrator. Notwithstanding anything to the contrary in the Plan, to the extent required to avoid accelerated taxation and tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six (6) month period immediately following termination of a Participant’s status as a Service Provider shall instead be paid on the first payroll date after the six-month anniversary of the Participant's
separation from service (or the Participant's death, if earlier). In no event will the Company or any of its Parent or Subsidiaries have any responsibility, liability, or obligation to reimburse, indemnify, or hold harmless a Participant (or any other person) in respect of Awards, for any taxes, penalties or interest that may be imposed on, or other costs incurred by, Participant (or any other person) as a result of Section 409A.
14. Leaves of Absence/Transfer Between Locations. Unless the Administrator provides otherwise or as otherwise required by Applicable Laws, Awards granted hereunder will continue to vest during any unpaid leave of absence. A Participant will not cease to be an Employee in the case of (a) any leave of absence approved by the Company or (b) transfers between locations of the Company or between the Company, its Parent, or any of its Subsidiaries. For purposes of Incentive Stock Options, no such leave may exceed three (3) months, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then six (6) months following the first (1st) day of such leave, any Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option.
15. Limited Transferability of Awards. Unless determined otherwise by the Administrator (and subject to the provisions of Section 6.2 that provides that the Administrator cannot institute an Exchange Program), Awards may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent and distribution (which, for purposes of clarification, shall be deemed to include through a beneficiary designation if available in accordance with Section 7.6(e) of the Plan), and may be exercised, during the lifetime of the Participant, only by the Participant. If the Administrator makes an Award transferable, such Award will contain such additional terms and conditions as the Administrator deems appropriate; provided, however, that in no event may any award be transferred for consideration to a third-party financial institution.
16. Adjustments; Dissolution or Liquidation; Merger or Change in Control.
16.1 Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, reclassification, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs (other than any ordinary dividends or other ordinary distributions), the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, will adjust the number and class of shares of stock that may be delivered under the Plan, the number, class, and price of shares of stock covered by each outstanding Award, and the numerical Share limits in Section 3 and the numerical Share and dollar limits in Section 6 of the Plan.
16.2 Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, to the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action.
16.3 Merger or Change in Control. In the event of a merger of the Company with or into another corporation or other entity or a Change in Control, and unless provided otherwise in an Award Agreement, each outstanding Award will be assumed, or substantially equivalent awards will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) with appropriate adjustments as to the number and kind of shares and prices (subject to the provisions of the following paragraph).
In the event that the successor corporation does not assume or substitute for the Award (or portion thereof), the Participant will fully vest in and have the right to exercise his or her outstanding Options and Stock Appreciation Rights (or portions thereof) not assumed or substituted for, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock, Restricted Stock Units, or Performance Awards (or portions thereof) not assumed or substituted for will lapse, and, with respect to Awards with performance-based vesting (or portions thereof) not assumed or substituted for, all performance goals or other vesting criteria will be deemed achieved at target levels and as to a prorated portion of each Award based on the portion of the applicable performance period that has lapsed through the date of the merger or Change in Control, and all other terms and conditions met as to such prorated portion of such Award, in each case, unless specifically provided otherwise under the applicable Award Agreement or other written agreement authorized by the Administrator between the Participant and the Company or any of its Subsidiaries or Parents, as applicable. In addition, unless specifically provided otherwise under the applicable Award Agreement or other written agreement authorized by the Administrator between the Participant and the Company or any of its Subsidiaries or Parents, as applicable, if an Option or Stock Appreciation Right (or portion thereof) is not assumed or substituted for in the event of a merger or Change in Control, the Option or Stock Appreciation Right (or its applicable portion) will be exercisable for a period of time as set forth in an Award Agreement, and the Option or Stock Appreciation Right (or its applicable portion) will terminate upon the expiration of such period.
For the purposes of this Section 16.3, an Award will be considered assumed if, following the merger or Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the merger or Change in Control, the consideration (whether stock, cash, or other securities or property) received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of an Option or Stock Appreciation Right or upon the payout of a Restricted Stock Unit, or Performance Award, for each Share subject to such Award, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or Change in Control. For the avoidance of doubt, the Administrator may determine that, for purposes of this Section 16.3 of the Plan below, the Company is the successor corporation with respect to some or all Awards.
Notwithstanding anything in this Section 16.3 to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals without the Participant’s consent, in all cases, unless specifically provided otherwise under the applicable Award Agreement or other written agreement authorized by the Administrator between the Participant and the Company or any of its Subsidiaries or Parents, as applicable; provided, however, a modification to such performance goals only to reflect the successor corporation’s post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption.
Notwithstanding anything in this Section 16.3 to the contrary, and unless otherwise provided in an Award Agreement, if an Award that vests, is earned or paid-out under an Award Agreement is subject to Section 409A and if the change in control definition contained in the Award
Agreement (or other agreement related to the Award, as applicable) does not comply with the definition of "change in control" for purposes of a distribution under Section 409A, then any payment of an amount that is otherwise accelerated under this Section 16.3 will be delayed until the earliest time that such payment would be permissible under Section 409A without triggering any penalties applicable under Section 409A.
Notwithstanding anything in this Plan to the contrary, in the case of any Option or Stock Appreciation Right with an exercise price that equals or exceeds the price paid for a share of Common Stock in connection with the Change in Control, such Option or Stock Appreciation Right will be cancelled without the payment of consideration therefor unless the Award is assumed or substituted.
17. Tax Withholding.
17.1 Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof) or such earlier time as any tax withholdings are due, the Company (or any of any Parent or Subsidiary employing or retaining the services of a Participant, as applicable) will have the power and the right to deduct or withhold, or require a Participant to remit to the Company (or any Parent or Subsidiary, as applicable) or a relevant tax authority, an amount sufficient to satisfy U.S. federal, state, local, non-U.S., and other taxes (including the Participant’s FICA or other social insurance contribution obligation) required to be withheld or paid with respect to such Award (or exercise thereof).
17.2 Withholding Arrangements. The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax liability or withholding obligation, in whole or in part by such methods as the Administrator shall determine, including, without limitation, (a) paying cash, check or other cash equivalents; (b) electing to have the Company withhold otherwise deliverable cash or Shares having a fair market value equal to the minimum statutory amount required to be withheld or such greater amount as the Administrator may determine if such amount would not have adverse accounting consequences, as the Administrator determines in its sole discretion; (c) delivering to the Company already-owned Shares having a fair market value equal to the minimum statutory amount required to be withheld or such greater amount as the Administrator may determine, in each case, provided the delivery of such Shares will not result in any adverse accounting consequences, as the Administrator determines in its sole discretion; (d) selling a sufficient number of Shares otherwise deliverable to the Participant through such means as the Administrator may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld or paid; (e) such other consideration and method of payment for the meeting of tax liabilities or withholding obligations as the Administrator may determine to the extent permitted by Applicable Laws; or (f) any combination of the foregoing methods of payment. The amount of the withholding obligation will be deemed to include any amount which the Administrator agrees may be withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state or local marginal income tax rates applicable to the Participant with respect to the Award on the date that the amount of tax to be withheld is to be determined or such greater amount as the Administrator may determine if such amount would not have adverse accounting consequences, as the Administrator determines in its sole discretion. The fair market value of the Shares to be withheld or delivered will be determined based on such methodology that the Company deems to be reasonable and in accordance with Applicable Laws.
18. No Effect on Employment or Service. Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing the Participant’s relationship as a Service Provider with the Company or its Subsidiaries or Parents, as applicable, nor will they interfere in any way with the Participant’s right or the right of the Company and its Subsidiaries or Parents, as applicable, to terminate such relationship at any time, free from any liability or claim under the Plan.
19. Date of Grant. The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided to each Participant within a reasonable time after the date of such grant.
20. Term of Plan. Subject to Section 24 of the Plan, the Plan will become effective upon its approval by the Company’s stockholders. The Plan will continue in effect until terminated under Section 21 of the Plan, but no Options that qualify as incentive stock options within the meaning of Code Section 422 may be granted after ten (10) years from the date of the initial Board action to adopt the Plan.
21. Amendment and Termination of the Plan.
21.1 Amendment and Termination. The Administrator, in its sole discretion, may amend, alter, suspend or terminate the Plan, or any part thereof, at any time and for any reason.
21.2 Stockholder Approval. The Company will obtain stockholder approval of any Plan amendment to the extent necessary to comply with Applicable Laws.
21.3 Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan will materially impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan will not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.
22. Conditions Upon Issuance of Shares.
22.1 Legal Compliance. Shares will not be issued pursuant to an Award unless the exercise or vesting of such Award and the issuance and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance.
22.2 Investment Representations. As a condition to the exercise or vesting of an Award, the Company may require the person exercising or vesting in such Award to represent and warrant at the time of any such exercise or vesting that the Shares are being acquired only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.
23. Inability to Obtain Authority. If the Company determines it to be impossible or impractical to obtain authority from any regulatory body having jurisdiction or to complete or comply with the requirements of any registration or other qualification of the Shares under any U.S. state or federal law or non-U.S. law or under the rules and regulations of the U.S. Securities and Exchange Commission, the stock exchange on which Shares of the same class are then listed, or any other governmental or regulatory body, which authority, registration, qualification or rule
compliance is deemed by the Company’s counsel to be necessary or advisable for the issuance and sale of any Shares hereunder, the Company will be relieved of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority, registration, qualification or rule compliance will not have been obtained.
24. Stockholder Approval. The Plan will be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted by the Board. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.
25. Forfeiture Events. The Administrator may specify in an Award Agreement that the Participant’s rights, payments, and benefits with respect to an Award will be subject to the reduction, cancellation, forfeiture, recoupment, reimbursement, or reacquisition upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include, without limitation, termination of such Participant’s status as an employee and/or other service provider for cause or any specified action or inaction by a Participant, whether before or after such termination of employment and/or other service, that would constitute cause for termination of such Participant’s status as an employee and/or other service provider. Notwithstanding any provisions to the contrary under this Plan, all Awards granted under the Plan will be subject to reduction, cancellation, forfeiture, recoupment, reimbursement, or reacquisition under any clawback policy adopted by the Company, including, without limitation, any clawback policy the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other Applicable Laws (the "Clawback Policy"). The Administrator may require a Participant to forfeit, return or reimburse the Company all or a portion of the Award and any amounts paid thereunder pursuant to the terms of the Clawback Policy or as necessary or appropriate to comply with Applicable Laws, including without limitation any reacquisition right regarding previously acquired Shares or other cash or property. Unless this Section 25 specifically is mentioned and waived in an Award Agreement or other document, no recovery of compensation under a Clawback Policy or otherwise will constitute an event that triggers or contributes to any right of a Participant to resign for "good reason" or "constructive termination" (or similar term) under any agreement with the Company or any Parent or Subsidiary of the Company.
26. Other Policies. Each Award may be subject to the terms and conditions of any other policy (and any amendments thereto) adopted by the Company from time to time, which may include any policy related to the vesting or transfer of equity awards. Whether any such policy will apply to a particular Award may depend, among other things, on when the Award was granted, whom the Award was granted to, and the type of Award.
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San Jose, CA 95128
United States
COMPUTERSHARE C/O NETAPP, INC. 2 NORTH LASALLE STREET, 3RD FLOOR CHICAGO, IL 60602 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/NTAP2025 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: V77079-P34749 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. NETAPP, INC. The Board of Directors unanimously recommends a vote FOR each of the nominees named in proposal 1. 1. Election of Directors Nominees: For Against Abstain 1a. T. Michael Nevens 1b. Deepak Ahuja 1c. Anders Gustafsson 1d. Gerald Held 1e. Deborah L. Kerr 1f. George Kurian 1g. Carrie Palin 1h. Frank Pelzer 1i. June Yang The Board of Directors unanimously recommends a vote FOR proposals 2, 3, 4 and 5. For Against Abstain 2. To hold an advisory vote to approve Named Executive Officer compensation. 3. To ratify the selection of Deloitte & Touche LLP as NetApp's independent registered public accounting firm for the fiscal year ending April 24, 2026. 4. To approve an amendment to NetApp's Employee Stock Purchase Plan. 5. To approve an amendment to NetApp's 2021 Equity Incentive Plan. The Board of Directors unanimously recommends a vote AGAINST proposal 6. For Against Abstain 6. To approve a stockholder proposal regarding support for Special Shareholder Meeting Improvement. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation, limited liability company, or partnership, please sign in full entity name by authorized officer or person. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be held on September 10, 2025: The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com. V77080-P34749 NETAPP, INC. Annual Meeting of Stockholders September 10, 2025 3:30 PM PDT This proxy is solicited by the Board of Directors George Kurian and Wissam Jabre, or either of them, are hereby appointed as the lawful agents and proxies of the undersigned (with all powers the undersigned would possess if personally present, including full power of substitution) to represent and to vote all shares of the common stock of NetApp, Inc. ("NetApp") that the undersigned is entitled to vote at NetApp's Annual Meeting of Stockholders to be held on Wednesday, September 10, 2025, at 3:30 p.m. Pacific Time and at any adjournments or postponements thereof (the "Annual Meeting"). The Annual Meeting will be held virtually and you may attend via the Internet at www.virtualshareholdermeeting.com/NTAP2025. This proxy will be voted as directed, or, if no direction is indicated, will be voted FOR the election of each of the nominees named in proposal 1, FOR proposals 2, 3, 4 and 5 and AGAINST proposal 6 and in the discretion of the persons named above as proxies upon such other matters as may properly come before the Annual Meeting. This proxy may be revoked at any time before it is voted. PLEASE VOTE PROMPTLY BY USING THE TELEPHONE OR INTERNET VOTING OPTIONS OR SIGN, DATE AND RETURN THIS CARD USING THE ENCLOSED POSTAGE-PREPAID ENVELOPE. Continued and to be signed on reverse side
