exv10w1






Exhibit 10.1




[INSERT DEALER NAME]  [INSERT DEALER ADDRESS] | TEL: [INSERT DEALER TELEPHONE NUMBER]




Opening Transaction




	 	 	 
	To:

	 	NetApp, Inc.

495 East Java Drive

Sunnyvale, California 94089
	 
	 	 
	A/C:

	 	[Insert Account Number]
	 
	 	 
	From:

	 	[Insert Dealer Name]
	 
	 	 
	Re:

	 	Convertible Bond Hedge Transaction
	 
	 	 
	Ref. No:

	 	[Insert Reference Number]
	 
	 	 
	Date:

	 	June 4, 2008






Dear Sir(s):




     The purpose of this communication (this “Confirmation”) is to set forth the terms and
conditions of the above-referenced transaction entered into on the Trade Date specified below (the
“Transaction”) between [          ] (“Dealer”) and NetApp, Inc. (“Counterparty”). This communication
constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below.



     1. This Confirmation is subject to, and incorporates, the definitions and provisions of the
2000 ISDA Definitions (including the Annex thereto) (the “2000 Definitions”) and the definitions
and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and
together with the 2000 Definitions, the “Definitions”), in each case as published by the
International Swaps and Derivatives Association, Inc. (“ISDA”). In the event of any inconsistency
between the 2000 Definitions and the Equity Definitions, the Equity Definitions will govern.
Certain defined terms used herein have the meanings assigned to them in the Indenture to be dated
as of June 10, 2008 between Counterparty and U.S. Bank National Association, as trustee (the
“Indenture”) relating to the
USD1,100,000,000 principal amount of 1.75% convertible senior notes
due June 1, 2013 (the “Convertible Securities”). In the event of any inconsistency between the
terms defined in the Indenture and this Confirmation, this Confirmation shall govern. For the
avoidance of doubt, references herein to sections of the Indenture are based on the draft of the
Indenture most recently reviewed by the parties at the time of execution of this Confirmation. If
any relevant sections of the Indenture are changed, added or renumbered between the execution of
this Confirmation and the execution of the Indenture, the parties will amend this Confirmation in
good faith to preserve the economic intent of the parties, as evidenced by such draft of the
Indenture. The parties further acknowledge that references to the Indenture herein are references
to the Indenture as in effect on the date of its execution and if the Indenture is amended
following its execution, any such amendment will be disregarded for purposes of this Confirmation
unless the parties agree otherwise in writing. The Transaction is subject to early unwind if the
closing of the Convertible Securities is not consummated for any reason, as set forth below in
Section 8(k).



     Each party is hereby advised, and each such party acknowledges, that the other party has
engaged in, or refrained from engaging in, substantial financial transactions and has taken other
material actions in reliance upon the parties’ entry into the Transaction to which this
Confirmation relates on the terms and conditions set forth below.



     This Confirmation evidences a complete and binding agreement between Dealer and Counterparty
as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall be
subject to an agreement (the “Agreement”) in the form of the 1992 ISDA Master Agreement
(Multicurrency—Cross



 









 




Border) as if Dealer and Counterparty had executed an agreement in such form on the date
hereof (but without any Schedule except for (i) the election of Loss and Second Method, New York
law (without reference to its choice of laws doctrine, other than Title 14 of the New York General
Obligations Law) as the governing law and US Dollars (“USD”) as the Termination Currency and (ii)
the replacement of the word “third” in the last line of Section 5(a)(i) of the Agreement with the
word “second.”




     All provisions contained in, or incorporated by reference to, the Agreement will govern this
Confirmation except as expressly modified herein. In the event of any inconsistency between this
Confirmation and either the Definitions or the Agreement, this Confirmation shall govern.



     The Transaction hereunder shall be the sole Transaction under the Agreement. If there exists
any ISDA Master Agreement between Dealer and Counterparty or any confirmation or other agreement
between Dealer and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist
between Dealer and Counterparty, then notwithstanding anything to the contrary in such ISDA Master
Agreement, such confirmation or agreement or any other agreement to which Dealer and Counterparty
are parties, the Transaction shall not be considered a Transaction under, or otherwise governed by,
such existing or deemed ISDA Master Agreement.



     2. The Transaction constitutes a Share Option Transaction for purposes of the Equity
Definitions. The terms of the particular Transaction to which this Confirmation relates are as
follows:



	 	 	 	 	 
	General Terms:	 	 
	 
	 	 	 	 
	 

	 	Trade Date:
	 	June 4, 2008
	 
	 	 	 	 
	 

	 	Effective Date:
	 	The closing date of the initial issuance of the Convertible Securities.
	 
	 	 	 	 
	 

	 	Option Style:
	 	Modified American, as described under “Procedures for Exercise” below.
	 
	 	 	 	 
	 

	 	Option Type:
	 	Call
	 
	 	 	 	 
	 

	 	Seller:
	 	Dealer
	 
	 	 	 	 
	 

	 	Buyer:
	 	Counterparty
	 
	 	 	 	 
	 

	 	Shares:
	 	The Common Stock of Counterparty, par value USD0.001 (Ticker Symbol: “NTAP”).
	 
	 	 	 	 
	 

	 	Number of Options:
	 	The number of Convertible Securities in denominations of USD1,000
principal amount issued by Counterparty on the closing date for the
initial issuance of the Convertible Securities; provided that the
Number of Options shall be automatically increased as of the date of
exercise by Goldman, Sachs & Co. of the Initial Purchasers’ option
pursuant to Section 2 of the Purchase Agreement dated as of June
4, 2008, between Counterparty and Goldman, Sachs & Co. and Morgan
Stanley & Co. Incorporated as representatives of the Initial
Purchasers party thereto (the “Purchase Agreement”) by the number of
Convertible Securities in denominations of USD1,000 principal amount
issued pursuant to such exercise (such Convertible Securities, the
“Additional Convertible Securities”). For the avoidance of doubt, the
Number of Options outstanding shall be reduced by each exercise of
Options hereunder.






2









 






	 	 	 	 	 
	 

	 	Applicable Percentage:
	 	[  ]%
	 
	 	 	 	 
	 

	 	Option Entitlement:
	 	As of any date, a number of Shares per Option equal to the “Conversion
Rate” (as defined in the Indenture, but without regard to any
adjustments to the Conversion Rate pursuant to Sections 6.02(h) or 6.03 of the Indenture).
	 
	 	 	 	 
	 

	 	Strike Price:
	 	As of any date, an amount in USD, rounded to the nearest cent (with
0.5 cents being rounded upwards), equal to USD1,000 divided by the
Option Entitlement as of such date.
	 
	 	 	 	 
	 

	 	Number of Shares:
	 	The product of the Number of Options and the Option Entitlement and
the Applicable Percentage.
	 
	 	 	 	 
	 

	 	Premium:
	 	USD[          ] (Premium per Option USD[          ]); provided
that if the Number of Options is increased pursuant to the proviso to
the definition of “Number of Options” above, an additional Premium
equal to the product of the number of Options by which the Number of
Options is so increased and the Premium per Option shall be paid on
the Additional Premium Payment Date.
	 
	 	 	 	 
	 

	 	Premium Payment Date:
	 	The Effective Date
	 
	 	 	 	 
	 

	 	Additional Premium Payment Date:
	 	The closing date for the purchase and sale of the Additional
Convertible Securities.
	 
	 	 	 	 
	 

	 	Exchange:
	 	NASDAQ Global Select Market
	 
	 	 	 	 
	 

	 	Related Exchange:
	 	All Exchanges located in the United States.
	 
	 	 	 	 
	Procedures

	 	for Exercise:	 	 
	 
	 	 	 	 
	 

	 	Exercise Date:
	 	Each Conversion Date.
	 
	 	 	 	 
	 

	 	Conversion Date:
	 	Each “Conversion Date” (as defined in the Indenture)
occurring during the Exercise Period for Convertible
Securities each in denominations of USD1,000
principal amount, the “Relevant Convertible
Securities” for such Conversion Date).
	 
	 	 	 	 
	 

	 	Exercise Period:
	 	The period from and excluding the Effective Date to
and including the Expiration Date.
	 
	 	 	 	 
	 

	 	Expiration Date:
	 	The earlier of (i) the last day on which any
Convertible Securities remain outstanding and (ii)
the “Scheduled Trading Day” (as defined in the
Indenture) immediately preceding the “Maturity Date”
(as defined in the Indenture).
	 
	 	 	 	 
	 

	 	Automatic Exercise on Conversion Dates:
	 	Applicable; and means that on each Conversion Date,
a number of Options equal to the number of Relevant
Convertible Securities for such Conversion Date in
denominations of USD1,000 principal amount shall be
automatically exercised.
	 
	 	 	 	 
	 

	 	Notice Deadline:
	 	In respect of any exercise of Options hereunder,
12:00 P.M., New York City time, on the Scheduled






3









 






	 	 	 	 	 
	 

	 	 	 	Trading Day immediately preceding the first
Scheduled Trading Day (as defined in the Indenture)
of the relevant “Observation Period” (as defined in
the Indenture) (such day and time, the “Notice
Deadline”); provided that, notwithstanding the
foregoing, such notice (and the related automatic
exercise of such Options) shall be effective if
given after the relevant Notice Deadline but prior
to 5:00 P.M. New York City time on the fifth
Scheduled Trading Day of such Observation Period, in
which case the Calculation Agent shall have the
right to adjust the Delivery Obligation as
appropriate to reflect the additional costs
(including, but not limited to, hedging mismatches
and market losses) and reasonable expenses incurred
by Dealer in connection with its hedging activities
(including the unwinding of any hedge position) as a
result of its not having received such notice prior
to the Notice Deadline; and provided further that in
the case of any exercise of Options hereunder in
connection with the conversion of any Relevant
Convertible Securities for any Conversion Dates
occurring during the period from and including the
25th Scheduled Trading Day (as defined in
the Indenture) prior to the Maturity Date to and
including the Expiration Date (the “Final Conversion
Period”), the Notice Deadline shall be 12:00 P.M.,
New York City time, on the Scheduled Trading Day (as
defined in the Indenture) immediately following the
relevant Exercise Date.
	 
	 	 	 	 
	 

	 	Notice of Exercise:
	 	Notwithstanding anything to the contrary in the
Equity Definitions, Dealer shall have no obligation
to make any payment or delivery in respect of any
exercise of Options hereunder unless Counterparty
notifies Dealer in writing prior to 12:00 P.M., New
York City time, on the Notice Deadline (subject to
the first proviso under Notice Deadline above) in
respect of such exercise, of (i) the number of
Relevant Convertible Securities being converted on
the related Conversion Date, (ii) the scheduled
settlement date under the Indenture for the Relevant
Convertible Securities for such Conversion Date and
(iii) the first Scheduled Trading Day of the
relevant Observation Period; provided that in the
case of any exercise of Options in connection with
the conversion of any Relevant Convertible
Securities for any Conversion Date occurring during
the Final Conversion Period, the content of such
notice shall be as set forth in clauses (i) and (ii)
above. For the avoidance of doubt, if Counterparty
fails to give such notice prior to 12:00 P.M., New
York City time, on the Notice Deadline (subject to
the first proviso under Notice Deadline above) in
respect of any exercise of Options hereunder,
Dealer’s obligation to make any payment or delivery
in respect of such exercise shall






4









 






	 	 	 	 	 
	 

	 	 	 	be permanently
extinguished, and late notice shall not cure such
failure.






	 	 	 	 	 	 	 
	 

	 	Dealer’s Telephone Number
and Telex and/or Facsimile Number
and Contact Details for purpose of
Giving Notice:
	 	To:
	 	[     ]
	 

	 	 	 	 	 	[     ]
	 

	 	 	 	 	 	[     ]
	 
	 	 	 	 	 	 
	 

	 	 	 	Attn:
	 	[     ]
	 

	 	 	 	 	 	[     ]
	 

	 	 	 	Telephone:
	 	[     ]
	 

	 	 	 	Facsimile:
	 	[     ]
	 
	 	 	 	 	 	 
	 

	 	 	 	With a copy to:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Attn:
	 	[     ]
	 

	 	 	 	 	 	[     ]
	 

	 	 	 	Telephone:
	 	[     ]
	 

	 	 	 	Facsimile:
	 	[     ]






	 	 	 	 	 
	Settlement Terms:	 	 
	 
	 	 	 	 
	 

	 	Settlement Date:
	 	For any Exercise Date, the
settlement date for the Shares to
be delivered in respect of the
Relevant Convertible Securities for
the relevant Conversion Date under
the terms of the Indenture;
provided that the Settlement Date
shall not be prior to the Exchange
Business Day immediately following
the date Counterparty provides the
Notice of Convertible Obligation
prior to 12:00 P.M., New York City
time.
	 
	 	 	 	 
	 

	 	Delivery Obligation:
	 	In lieu of the obligations set
forth in Sections 8.1 and 9.1 of
the Equity Definitions, and subject
to “Notice of Exercise” above, in
respect of an Exercise Date, Dealer
will deliver to Counterparty on the
related Settlement Date (the
“Delivery Obligation”), a number of
Shares equal to the product of the
Applicable Percentage and the
aggregate number of Shares (the
“Deliverable Shares”) included in
the “Settlement Amount” (as defined
in the Indenture) pursuant to
clause (ii) of the definition of
“Daily Settlement Amount” in the
Indenture, if any, that
Counterparty is obligated to
deliver to the holder(s) of the
Relevant Convertible Securities for
such Conversion Date pursuant to
Section 6.01(c) of the Indenture
(except that such number of
Deliverable Shares shall be
determined without taking into
consideration any rounding pursuant
to Section 6.02(d) of the
Indenture or any election by
Counterparty to deliver to holders
cash in lieu of Shares pursuant to
Section 6.02(f) of the Indenture,
and shall be rounded down to the
nearest whole number) and cash in
lieu of fractional Shares, if any,
resulting from such rounding
(collectively, the “Convertible
Obligation”); provided that the






5









 






	 	 	 	 	 
	 

	 	 	 	Delivery Obligation shall be
determined excluding any Shares
(and cash in lieu of fractional
Shares, if any) that Counterparty
is obligated to deliver to
holder(s) of the Relevant
Convertible Securities as a direct
or indirect result of any
adjustments to the Conversion Rate
pursuant to Sections 6.02(h) and
6.03 of the Indenture and any
interest payment that Counterparty
is (or would have been) obligated
to deliver to holder(s) of the
Relevant Convertible Securities for
such Conversion Date; provided
further that to the extent
Counterparty elects to deliver to
holders an amount of cash per
$1,000 principal amount of Relevant
Convertible Securities in lieu of
Shares pursuant to Section
6.02(f) of the Indenture (the
“Cash Amount”), the number of
Shares included in the Delivery
Obligation shall be capped so that
such number does not exceed the
product of the Applicable
Percentage and the sum of (x) the
number of Deliverable Shares (after
giving effect to Counterparty’s
election to deliver the Cash Amount
in lieu of Shares) and (y) a number
of Shares equal to the Cash Amount
divided by the “Daily VWAP” (as
defined in the Indenture) on the
last day of the relevant
Observation Period; and provided
further that if such exercise
relates to the conversion of
Relevant Convertible Securities in
connection with which holders
thereof are entitled to receive
additional Shares (and cash in lieu
of fractional Shares) pursuant to
the adjustments to the Conversion
Rate set forth in Section 6.03 of
the Indenture, then,
notwithstanding the foregoing, the
Delivery Obligation shall include
such additional Shares (and cash in
lieu of fractional Shares), except
that the Delivery Obligation shall
be capped so that the product of
the Applicable Percentage and the
value of the Delivery Obligation
(with the value of any Shares
included in the Delivery Obligation
determined by the Calculation Agent
using the Daily VWAP on the last
day of the relevant Observation
Period) does not exceed the amount
(the “Makewhole Cap Amount”) as
determined by the Calculation Agent
that would be payable by Dealer
pursuant to Section 6 of the
Agreement if such Conversion Date
were an Early Termination Date
resulting from an Additional
Termination Event with respect to
which the Transaction (except that,
for purposes of determining such
amount (x) the Number of Options
shall be deemed to be equal to the
number of Options exercised on such
Exercise Date and (y) such amount
payable will be determined as if
Section 6.03 of the Indenture
were deleted) was the sole Affected
Transaction and Counterparty was
the sole Affected Party (determined
without regard to Section 8(c) of
this Confirmation). For the
avoidance of doubt, the Calculation
Agent shall determine the Makewhole
Cap Amount in good faith and in a
commercially






6









 






	 	 	 	 	 
	 

	 	 	 	reasonable manner,
including without limitation by
making reference to the bid-side
market volatility of the Shares
immediately prior to the Makewhole
Event Time. The “Makewhole Event
Time” means the time of the first
public announcement by any person
of a firm intention to engage in a
transaction or other event (whether
or not subsequently amended) that
leads to the transaction or event
that results in converting holders
of the Relevant Convertible
Securities being so entitled to
receive to receive additional
Shares (and cash in lieu of
fractional shares). In addition,
for the avoidance of doubt, if the
“Daily Conversion Value” (as
defined in the Indenture) for every
“VWAP Trading Day” (as defined in
the Indenture) occurring in the
relevant Observation Period is less
than or equal to USD 50, Dealer
will have no delivery obligation
hereunder in respect of the related
Exercise Date.
	 
	 	 	 	 
	 

	 	Notice of Convertible Obligation:
	 	No later than the Exchange Business
Day immediately following the last
day of the relevant Observation
Period, Counterparty shall give
Dealer notice of the final number
of Shares (and cash in lieu of
fractional Shares, if any)
comprising the relevant Convertible
Obligation; provided that, with
respect to any Exercise Date
occurring during the Final
Conversion Period, Counterparty may
provide Dealer with a single notice
of the aggregate number of Shares
(and cash in lieu of fractional
Shares) comprising the Convertible
Obligations for all Exercise Dates
occurring during such period (it
being understood, for the avoidance
of doubt, that the requirement of
Counterparty to deliver such notice
shall not limit Counterparty’s
obligations with respect to Notice
of Exercise, as set forth above, in
any way).
	 
	 	 	 	 
	 

	 	Other Applicable Provisions:
	 	To the extent Dealer is obligated
to deliver Shares hereunder, the
provisions of Sections 9.1(c), 9.8,
9.9, 9.10 and 9.11 of the Equity
Definitions will be applicable as
if “Physical Settlement” applied to
the Transaction; provided that the
Representation and Agreement
contained in Section 9.11 of the
Equity Definitions shall be
modified by excluding any
representations therein relating to
restrictions, obligations,
limitations or requirements under
applicable securities laws that
exist as a result of the fact that
Counterparty is the issuer of the
Shares.
	 
	 	 	 	 
	 

	 	Restricted Certificated Shares:
	 	Notwithstanding anything to the
contrary in the Equity Definitions,
Dealer may, in whole or in part,
deliver Shares in certificated form
representing the Number of Shares
to be Delivered to Counterparty in
lieu of delivery through the
Clearance System.
	 
	 	 	 	 
	Adjustments:	 	 
	 
	 	 	 	 
	 

	 	Method of Adjustment:
	 	Notwithstanding Section 11.2 of the
Equity






7









 






	 	 	 	 	 
	 

	 	 	 	Definitions, upon the
occurrence of any event or
condition set forth in Section
6.02(a), (b), (c), (d) or (e) of
the Indenture (each an “Adjustment
Event”), the Calculation Agent
shall make the corresponding
adjustment in respect of any one or
more of the Number of Options, the
Option Entitlement and any other
variable relevant to the exercise,
settlement or payment of the
Transaction, to the extent an
analogous adjustment is made under
the Indenture. Promptly upon the
occurrence of any Adjustment Event
Counterparty shall notify the
Calculation Agent of such
Adjustment Event; and once the
adjustments to be made to the terms
of the Indenture and the
Convertible Securities in respect
of such Adjustment Event have been
determined, Counterparty shall
promptly notify the Calculation
Agent in writing of the details of
such adjustments. The Calculation
Agent shall, promptly after
receiving such notice, make any
corresponding adjustments to the
terms of the Transaction and
promptly notify Dealer and
Counterparty thereof.
	 
	 	 	 	 
	Extraordinary Events:	 	 
	 
	 	 	 	 
	 

	 	Merger Events:
	 	Notwithstanding Section
12.1(b) of the Equity
Definitions, a “Merger Event”
means the occurrence of any
event or condition set forth
in Section 6.09 or 8.02
of the Indenture.
	 
	 	 	 	 
	 

	 	Consequences of Merger Events:
	 	Notwithstanding Section 12.2
of the Equity Definitions,
upon the occurrence of a
Merger Event, the Calculation
Agent shall make the
corresponding adjustment in
respect of any adjustment
under the Indenture to any
one or more of the nature of
the Shares, the Number of
Options, the Option
Entitlement and any other
variable relevant to the
exercise, settlement or
payment for the Transaction,
to the extent an analogous
adjustment is made under the
Indenture in respect of such
Merger Event; provided that
such adjustment shall be made
without regard to any
adjustment to the Conversion
Rate for the issuance of
additional Shares as set
forth in Sections 6.02(h)
and 6.03 of the Indenture.
	 
	 	 	 	 
	 

	 	Notice of Merger Consideration and Consequences:
	 	Upon the occurrence of a
Merger Event that causes the
Shares to be converted into
the right to receive more
than a single type of
consideration (determined
based in part upon any form
of stockholder election),
Counterparty shall reasonably
promptly (but in any event
prior to the Merger Date)
notify the Calculation Agent
of (i) the type and amount of
consideration that a holder
of Shares would have been
entitled to in the case of
reclassifications,
consolidations, mergers,
sales or transfers of assets
or other transactions that
cause Shares to be converted
into the right to receive
more than a single type of
consideration, (ii) the
weighted average of the types
and amounts of






8









 






	 	 	 	 	 
	 

	 	 	 	consideration
received by the holders of
Shares that affirmatively
make such an election (or if
no holders of Shares
affirmatively make such an
election, the types and
amount of consideration
actually received by such
holders), and (iii) the
details of the adjustment
made under the Indenture in
respect of such Merger Event.
	 
	 	 	 	 
	Nationalization, Insolvency or Delisting:	 	Cancellation and Payment
(Calculation Agent
Determination); provided that
in addition to the provisions
of Section 12.6(a)(iii) of
the Equity Definitions, it
will also constitute a
Delisting if the Exchange is
located in the United States
and the Shares are not
immediately re-listed,
re-traded or re-quoted on any
of the New York Stock
Exchange, the NASDAQ Global
Select Market or the NASDAQ
Global Market (or their
respective successors); if
the Shares are immediately
re-listed, re-traded or
re-quoted on any such
exchange or quotation system,
such exchange or quotation
system shall thereafter be
deemed to be the Exchange.
	 
	 	 	 	 
	Additional Disruption Events:	 	 
	 
	 	 	 	 
	 

	 	(a) Change in Law:
	 	Applicable; provided that Section
12.9(a)(ii) of the Equity Definitions is
hereby amended by (i) replacing the phrase
“the interpretation” in the third line
thereof with the phrase “or announcement or
statement of the formal or informal
interpretation” and (ii) immediately
following the word “Transaction” in clause
(X) thereof, adding the phrase “in the
manner contemplated by Hedging Party on the
Trade Date.”
	 
	 	 	 	 
	 

	 	(b) Failure to Deliver:
	 	Applicable
	 
	 	 	 	 
	 

	 	(c) Insolvency Filing:
	 	Applicable
	 
	 	 	 	 
	 

	 	(d) Hedging Disruption:
	 	Applicable
	 
	 	 	 	 
	Hedging Party:	 	Dealer
	 
	 	 	 	 
	Determining Party:	 	Dealer
	 
	 	 	 	 
	Non-Reliance:	 	Applicable
	 
	 	 	 	 
	Agreements and Acknowledgments Regarding Hedging Activities:	 	Applicable
	 
	 	 	 	 
	Additional Acknowledgments:	 	Applicable






9









 






	 	 	 	 	 
	 

	 	3. Calculation Agent:
	 	4. Dealer. All determinations
made by the Calculation Agent
shall be made in good faith
and in a commercially
reasonable manner. Following
any calculation by the
Calculation Agent hereunder,
upon a prior written request
by Counterparty, the
Calculation Agent will
provide to Counterparty by
e-mail to the e-mail address
provided by Counterparty in
such prior written request a
report (in a commonly used
file format for the storage
and manipulation of financial
data) displaying in
reasonable detail the basis
for such calculation. No
transferee of Dealer with
respect to any Options in
accordance with the terms of
this Confirmation shall act
as Calculation Agent with
respect to such transferred
Options without the prior
consent of Counterparty, such
consent not to be
unreasonably withheld.





4. Account Details:




     Dealer Payment Instructions:



          [          ]




     Counterparty Payment Instructions:



          To be provided by Counterparty.



5. Offices:




     The Office of Dealer for the Transaction is:



          [          ]




     The Office of Counterparty for the Transaction is:



          [          ]



6. Notices: For purposes of this Confirmation:




	 	 	 	 	 
	(a)	 	Address for notices or communications to Counterparty:
	 
	 	 	 	 
	 

	 	To:
	 	NetApp, Inc.

495 East Java Drive

Sunnyvale, CA 94089
	 

	 	Attn:
	 	Treasurer
	 

	 	 	 	 
	 

	 	Telephone:
	 	(408) 822-6000
	 

	 	Facsimile:
	 	(408) 822-4501
	 
	 	 	 	 
	 

	 	With a copy to:	 	NetApp,
Inc.

495 East Java Drive

Sunnyvale, CA 94089
	 	 
	 	 	 	 
	 

	 	Attn:
	 	General Counsel
	 

	 	 	 	 
	 

	 	Telephone:
	 	(408) 822-6000
	 

	 	Facsimile:
	 	(408) 822-4501
	 
	 	 	 	 
	(b)	 	Address for notices or communications to Dealer:
	 
	 	 	 	 
	 

	 	To:
	 	[          ]
	 

	 	Attn:
	 	[          ]
	 

	 	 	 	[          ]
	 

	 	Telephone:
	 	[          ]
	 

	 	Facsimile:
	 	[          ]
	 
	 	 	 	 
	 

	 	With a copy to:	 	 






10









 






	 	 	 	 	 
	 

	 	Attn:
	 	[          ]
	 

	 	 	 	[          ]
	 

	 	Telephone:
	 	[          ]
	 

	 	Facsimile:
	 	[          ]






     7. Representations, Warranties and Agreements:



     (a) In addition to the representations and warranties in the Agreement and those contained
elsewhere herein, Counterparty represents and warrants to and for the benefit of, and agrees with,
Dealer as follows:




     (i) On the Trade Date, (A) none of Counterparty and its executive officers and
directors is aware of any material nonpublic information regarding Counterparty or the
Shares and (B) all reports and other documents filed by Counterparty with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) when considered as a whole (with the more recent such reports and documents
deemed to amend inconsistent statements contained in any earlier such reports and
documents), do not contain any untrue statement of a material fact or any omission of a
material fact required to be stated therein or necessary to make the statements therein, in
the light of the circumstances in which they were made, not misleading.




     (ii) (A) On the Trade Date, the Shares or securities that are convertible into, or
exchangeable or exercisable for Shares, are not, and shall not be, subject to a “restricted
period,” as such term is defined in Regulation M under the Exchange Act (“Regulation M”)
and (B) Counterparty shall not engage in any “distribution,” as such term is defined in
Regulation M, other than a distribution meeting the requirements of the exceptions set
forth in sections 101(b)(10) and 102(b)(7) of Regulation M, until the second Exchange
Business Day immediately following the Trade Date.




     (iii) Without limiting the generality of Section 13.1 of the Equity Definitions,
Counterparty acknowledges that neither Dealer nor any of its affiliates is making any
representations or warranties or taking a position or expressing any view with respect to
the treatment of the Transaction under any accounting standards, including FASB Statements
128, 133 (as amended), 149 or 150, EITF Issue No. 00-19, 01-6, 03-6 or 07-5 (or any
successor issue statements) or under the FASB’s Liabilities & Equity Project.




     (iv) Without limiting the generality of Section 3(a)(iii) of the Agreement, the
Transaction will not violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.




     (v) Prior to the Trade Date, Counterparty shall deliver to Dealer a resolution of
Counterparty’s board of directors authorizing the Transaction and such other certificate or
certificates as Dealer shall reasonably request.




     (vi) Counterparty is not entering into this Confirmation to create actual or apparent
trading activity in the Shares (or any security convertible into or exchangeable for
Shares) or to otherwise manipulate the price of the Shares (or any security convertible
into or exchangeable for Shares) or to otherwise violate the Exchange Act.




     (vii) Counterparty is not, and after giving effect to the transactions contemplated
hereby will not be, required to register as, an “investment company” as such term is
defined in the Investment Company Act of 1940, as amended.




     (viii) On each of the Trade Date, the Premium Payment Date and the Additional Premium
Payment Date, if any, Counterparty is not “insolvent” (as such term is defined under
Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the
“Bankruptcy Code”)) and Counterparty would be able to purchase the Shares hereunder in
compliance with the laws of the jurisdiction of Counterparty’s incorporation.



     (b) Each of Dealer and Counterparty agrees and represents that it is an “eligible contract
participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act, as amended.



11









 





     (c) Each of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to
it is intended to be exempt from registration under the Securities Act of 1933, as amended (the
“Securities Act”), by virtue of Section 4(2) thereof. Accordingly, Counterparty represents and
warrants to Dealer that (i) it has the financial ability to bear the economic risk of its
investment in the Transaction and is able to bear a total loss of its investment and its
investments in and liabilities in respect of the Transaction, which it understands are not readily
marketable, are not disproportionate to its net worth, and it is able to bear any loss in
connection with the Transaction, including the loss of its entire investment in the Transaction,
(ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under
the Securities Act, (iii) it is entering into the Transaction for its own account and without a
view to the distribution or resale thereof, (iv) the assignment, transfer or other disposition of
the Transaction has not been and will not be registered under the Securities Act and is restricted
under this Confirmation, the Securities Act and state securities laws, and (v) its financial
condition is such that it has no need for liquidity with respect to its investment in the
Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated
undertaking or indebtedness and is capable of assessing the merits of and understanding (on its own
behalf or through independent professional advice), and understands and accepts, the terms,
conditions and risks of the Transaction.



     (d) Each of Dealer and Counterparty agrees and acknowledges that Dealer is a “financial
institution,” “swap participant” and/or “financial participant” within the meaning of Sections
101(22), 101(53C) and 101(22A) of Title 11 of the Bankruptcy Code. The parties hereto further
agree and acknowledge (A) that this Confirmation is (i) a “securities contract,” as such term is
defined in Section 741(7) of the Bankruptcy Code, with respect to which each payment and delivery
hereunder is a “settlement payment,” as such term is defined in Section 741(8) of the Bankruptcy
Code, and (ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy
Code, with respect to which each payment and delivery hereunder is a “transfer,” as such term is
defined in Section 101(54) of the Bankruptcy Code, and (B) that Dealer is entitled to the
protections afforded by, among other sections, Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555
and 560 of the Bankruptcy Code.



     (e) Counterparty shall deliver to Dealer (i) an incumbency certificate, dated as of the Trade
Date, of Counterparty in customary form and (ii) an opinion of counsel, dated as of the Trade Date
and reasonably acceptable to Dealer in form and substance, with respect to due incorporation,
existence and good standing of the Counterparty in Delaware, its qualifications as a foreign
corporation and good standing in California, the due authorization, execution and delivery of the
Confirmation, and the absence of conflict of the execution and delivery of the Confirmation with
any material agreement required to be filed as any exhibit to the Counterparty’s Annual Report on
Form 10-K and the Counterparty’s charter documents.



     (f) Counterparty represents and warrants that it has received, read and understands the OTC
Options Risk Disclosure Statement and a copy of the most recent disclosure pamphlet prepared by The
Options Clearing Corporation entitled “Characteristics and Risks of Standardized Options”.



     Each party acknowledges and agrees to be bound by the Conduct Rules of the National
Association of Securities Dealers, Inc. applicable to transactions in options, and further agrees
not to violate the position and exercise limits set forth therein.



     8. Other Provisions:



     (a) Right to Extend. Dealer may postpone any Exercise Date or Settlement Date or any other
date of valuation or delivery by Dealer, with respect to some or all of the relevant Options (in
which event the Calculation Agent shall make appropriate adjustments to the Delivery Obligation),
if Dealer determines, in its reasonable discretion, that such extension is reasonably necessary or
appropriate to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing
liquidity conditions in the cash market, the stock borrow market or other relevant market or to
enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or
settlement activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated
purchaser of Counterparty, be in compliance with applicable legal, regulatory or self-regulatory
requirements, or with related policies and procedures applicable to Dealer.



12









 





     (b) Additional Termination Events. The occurrence of (i) an event of default with respect to
Counterparty under the terms of the Convertible Securities as set forth in Section 7.01 of the
Indenture, or (ii) an Amendment Event shall be an Additional Termination Event with respect to
which the Transaction is the sole Affected Transaction and Counterparty is the sole Affected Party,
and Dealer shall be the party entitled to designate an Early Termination Date pursuant to Section
6(b) of the Agreement and to determine the amount payable pursuant to Section 6(e) of the
Agreement.



     “Amendment Event” means that Counterparty amends, modifies, supplements or obtains a waiver in
respect of any term of the Indenture or the Convertible Securities governing the principal amount,
coupon (but only if such event results in a decrease to such coupon), maturity, the amount payable
upon a repurchase obligation of Counterparty, upon a fundamental change, any term relating to
conversion of the Convertible Securities (including changes to the conversion price, conversion
settlement dates or conversion conditions), or any term that would require consent of the holders
of not less than 100% of the principal amount of the Convertible Securities to amend, in each case
without the prior consent of Dealer.



     (c) Alternative Calculations and Payment on Early Termination and on Certain Extraordinary
Events. If Dealer shall owe Counterparty any amount pursuant to Section 12.2 of the Equity
Definitions or “Consequences of Merger Events” above, or Section 12.6, 12.7 or 12.9 of the Equity
Definitions (except in the event of a Merger Event, Insolvency or Nationalization, in each case in
which the consideration or proceeds to be paid to holders of Shares consists solely of cash) or
pursuant to Section 6(d)(ii) of the Agreement (except in the event of an Event of Default in which
Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected
Party, that resulted from an event or events within Counterparty’s control) (a “Payment
Obligation”), Counterparty shall have the right, in its sole discretion, to require Dealer to
satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by
giving irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading
Day, between the hours of 9:00 A.M. and 4:00 P.M., New York City time, on the Merger Date,
Announcement Date or Early Termination Date, as applicable (“Notice of Share Termination”). If no
Notice of Share Termination is received by Dealer within the time specified in the preceding
sentence, Dealer shall have the right, in its sole discretion, to satisfy any Payment Obligation by
the Share Termination Alternative by promptly giving Counterparty a Notice of Share Termination.
Upon delivery of a Notice of Share Termination by either party, the following provisions shall
apply on the Scheduled Trading Day immediately following the Merger Date, Announcement Date or
Early Termination Date, as applicable:



	 	 	 
	Share Termination Alternative:

	 	Applicable and means that Dealer shall deliver to Counterparty the
Share Termination Delivery Property on the date on which the Payment Obligation would
otherwise be due pursuant to “Consequences of Merger Events” above or Section 12.2, 12.6, 12.7 or 12.9 of the Equity
Definitions or Section 6(d)(ii) of the Agreement, as applicable (the “Share
Termination Payment Date”), in satisfaction of the Payment Obligation.
	 
	 	 
	Share Termination Delivery
Property:

	 	A number of Share Termination Delivery
Units, as calculated by the Calculation
Agent, equal to the Payment Obligation
divided by the Share Termination Unit
Price. The Calculation Agent shall
adjust the Share Termination Delivery
Property by replacing any fractional
portion of the aggregate amount of a
security therein with an amount of cash
equal to the value of such fractional
security based on the values used to
calculate the Share Termination Unit
Price.
	 
	 	 
	Share Termination Unit Price:

	 	The value of property contained in one
Share Termination Delivery Unit, as
determined by the Calculation Agent in
its discretion by commercially reasonable
means and notified by the Calculation
Agent to Dealer at the time of
notification of the Payment Obligation.
	 
	 	 
	Share Termination Delivery Unit:

	 	In the case of a Termination Event, Event
of Default, Delisting or Additional
Disruption Event, one Share or, in the
case of an Insolvency, Nationalization or
Merger Event, one Share or a unit






13









 






	 	 	 
	 

	 	consisting of the number or amount of
each type of property received by a
holder of one Share (without
consideration of any requirement to pay
cash or other consideration in lieu of
fractional amounts of any securities) in
such Insolvency, Nationalization or
Merger Event. If such Insolvency,
Nationalization or Merger Event involves
a choice of consideration to be received
by holders, such holder shall be deemed
to have elected to receive the maximum
possible amount of cash.
	 
	 	 
	Failure to Deliver:

	 	Applicable
	 
	 	 
	Other Applicable provisions:

	 	If Share Termination Alternative is
applicable, the provisions of Sections
9.8, 9.9 and 9.11 of the Equity
Definitions will be applicable as if
“Physical Settlement” applied to the
Transaction, except that all references
to “Shares” shall be read as references
to “Share Termination Delivery Units”;
provided that the Representation and
Agreement contained in Section 9.11 of
the Equity Definitions shall be modified
by excluding any representations therein
relating to restrictions, obligations,
limitations or requirements under
applicable securities laws as a result of
the fact that Counterparty is the issuer
of any Share Termination Delivery Units
(or any part thereof).






     (d) Disposition of Hedge Shares. Counterparty hereby agrees that if, in the good faith
reasonable judgment of Dealer or Counterparty, based on the advice of counsel, the Shares (the
“Hedge Shares”) acquired by Dealer for the purpose of hedging its obligations pursuant to the
Transaction cannot be sold in the U.S. public market by Dealer without registration under the
Securities Act, Counterparty shall, at its election: (i) in order to allow Dealer to sell the Hedge
Shares in a registered offering, make available to Dealer an effective registration statement under
the Securities Act to cover the resale of such Hedge Shares and (A) enter into an agreement, in
form and substance satisfactory to Dealer, substantially in the form of an underwriting agreement
for underwritten follow-on offerings of equity securities of companies of comparable size, maturity
and lines of business, (B) provide accountant’s “comfort” letters in customary form for
underwritten follow-on offerings of equity securities, (C) provide disclosure opinions of
nationally recognized outside counsel to Counterparty as are customarily requested in connection
with underwritten follow-on offerings of equity securities of companies of comparable size,
maturity and lines of business, (D) provide other customary opinions, certificates and closing
documents customary in form for underwritten follow-on offerings of equity securities of companies
of comparable size, maturity and lines of business and (E) afford Dealer a reasonable opportunity
to conduct a “due diligence” investigation with respect to Counterparty customary in scope for
underwritten follow-on offerings of equity securities of
companies of comparable size, maturity and lines of business; provided, however, that if
Dealer, in its sole commercially reasonable discretion, is not satisfied with access to due
diligence materials, the results of its due diligence investigation, or the procedures and
documentation for the registered offering referred to above, then clause (ii) or clause (iii) of
this Section 8(d) shall apply at the election of Counterparty, provided that Dealer has given the
Counterparty reasonable notice of its determination and provided the Counterparty with reasonable
opportunity to satisfy Dealer’s concerns; (ii) in order to allow Dealer to sell the Hedge Shares in
a private placement, enter into a private placement agreement substantially similar to private
placement purchase agreements customary for private placements of equity securities of companies of
comparable size, maturity and lines of business, in form and substance reasonably satisfactory to
Dealer, including customary representations, covenants, blue sky and other governmental filings
and/or registrations, indemnities to Dealer, due diligence rights (for Dealer or any designated
buyer of the Hedge Shares from Dealer), opinions and certificates and such other documentation as
is customary for private placements agreements, all reasonably acceptable to Dealer (in which case,
the Calculation Agent shall make any adjustments to the terms of the Transaction that are
necessary, in its reasonable judgment, to compensate Dealer for any discount from the public market
price of the Shares incurred on the sale of Hedge Shares in a private placement); or (iii) purchase
the Hedge Shares from Dealer at the “Daily VWAP” (as defined in the Indenture, and determined as if
the relevant Exchange Business Days were VWAP Trading Days during the Observation Period, each as
defined in the Indenture) on such Exchange Business Days, and in the amounts, requested by Dealer.



     (e) Repurchase and Conversion Rate Adjustment Notices. Counterparty shall, at least two



14









 




Exchange Business Days prior to any day on which Counterparty effects any repurchase of Shares or
consummates or otherwise engages in any transaction or event (a “Conversion Rate Adjustment Event”)
that could reasonably be expected to lead to an increase in the Conversion Rate, give Dealer a
written notice of such repurchase or Conversion Rate Adjustment Event (a “Repurchase Notice”) on
such day if, following such repurchase or Conversion Rate Adjustment Event, the Notice Percentage
would reasonably be expected to be greater by 0.5% than the Notice Percentage included in the
immediately preceding Repurchase Notice (or, in the case of the first such Repurchase Notice,
greater than the Notice Percentage as of the date hereof). The “Notice Percentage” as of any day
is the fraction, expressed as a percentage, the numerator of which is the number of Shares
underlying all Convertible Securities outstanding on such day and the denominator of which is the
number of Shares outstanding on such day. In the event that Counterparty fails to provide Dealer
with a Repurchase Notice on the day and in the manner specified in this Section 8(e) then, to the
extent permitted by applicable law, Counterparty agrees to indemnify and hold harmless Dealer, its
affiliates and their respective directors, officers, employees, agents and controlling persons
(Dealer and each such person being an “Indemnified Party”) from and against any and all losses,
claims, damages and liabilities (or actions in respect thereof), joint or several, to which such
Indemnified Party is subject under applicable securities laws, including without limitation,
Section 16 of the Exchange Act or under any state or federal law, regulation or regulatory order,
as a result of such failure. If for any reason the foregoing indemnification is unavailable to any
Indemnified Party or insufficient to hold harmless any Indemnified Party, then Counterparty shall
contribute, to the maximum extent permitted by law, to the amount paid or payable by the
Indemnified Party as a result of such loss, claim, damage or liability. In addition, Counterparty
will reimburse any Indemnified Party for any reasonable expenses (including reasonable counsel fees
and expenses) as they are incurred (after notice to Counterparty) in connection with the
investigation of, preparation for or defense or settlement of any pending or threatened claim or
any action, suit or proceeding arising therefrom, whether or not such Indemnified Party is a party
thereto and whether or not such claim, action, suit or proceeding is initiated or brought by or on
behalf of Counterparty. This indemnity shall survive the completion of the Transaction
contemplated by this Confirmation and any assignment and delegation of the Transaction made
pursuant to this Confirmation or the Agreement shall inure to the benefit of any permitted assignee
of Dealer.




     (f) Transfer and Assignment. Either party may transfer any of its rights or obligations under
the Transaction with the prior written consent of the non-transferring party, such consent not to
be unreasonably withheld; provided that Dealer may transfer or assign without any consent of
Counterparty its rights and obligations hereunder, in whole or in part, to any person, or any
person whose obligations would be guaranteed by a person, in either case, of credit quality
equivalent to Dealer’s (or its guarantor’s), but in no event with a rating for its long term,
unsecured and unsubordinated indebtedness of less than A by Standard and Poor’s Rating Group, Inc.
or its successor (“S&P”), and less than A2 by Moody’s Investor
Service, Inc. (“Moody’s”), or, if either S&P or Moody’s ceases to rate such debt, less than an
equivalent rating by a substitute agency mutually agreed by Counterparty and Dealer. Dealer shall
as soon as reasonably practicable notify Counterparty of any such transfer or assignment. If at any
time at which (1) the Equity Percentage exceeds 9.0% or (2) Dealer, Dealer Group (as defined
below) or any person whose ownership position would be aggregated with that of Dealer or Dealer
Group (Dealer, Dealer Group or any such person, a “Dealer Person”) under Section 203 of the
Delaware General Corporation Law (the “DGCL Takeover Statute”) or other federal, state or local
regulations or regulatory orders applicable to ownership of Shares (“Applicable Laws”), owns,
beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a
relevant definition of ownership in excess of a number of Shares equal to (x) the number of Shares
that would give rise to reporting or registration obligations or other requirements (including
obtaining prior approval by a state or federal regulator) of a Dealer Person under Applicable Laws
(including, without limitation, “interested stockholder” or “acquiring person” status under the
DGCL Takeover Statute) and with respect to which such requirements have not been met or the
relevant approval has not been received minus (y) 1% of the number of Shares outstanding on the
date of determination (either such condition described in clause (1) or (2), an “Excess Ownership
Position”), Dealer, in its discretion, is unable to effect a transfer or assignment to a third
party after its commercially reasonable efforts on pricing terms reasonably acceptable to Dealer
such that an Excess Ownership Position no longer exists, Dealer may designate any Scheduled Trading
Day as an Early Termination Date with respect to a portion (the “Terminated Portion”) of the
Transaction, such that an Equity Ownership Position no longer exists following such partial
termination. In the event that Dealer so designates an Early



15









 




Termination Date with respect to a
portion of the Transaction, a payment or delivery shall be made pursuant to Section 6 of the
Agreement and Section 8(c) of this Confirmation as if (i) an Early Termination Date had been
designated in respect of a Transaction having terms identical to the Terminated Portion of the
Transaction, (ii) Counterparty were the sole Affected Party with respect to such partial
termination, (iii) such portion of the Transaction were the only Terminated Transaction and (iv)
Dealer were the party entitled to designate an Early Termination Date pursuant to Section 6(b) of
the Agreement and to determine the amount payable pursuant to Section 6(e) of the Agreement. The
“Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of
which is the number of Shares that Dealer and any of its affiliates subject to aggregation with
Dealer for purposes of the “beneficial ownership” test under Section 13 of the Exchange Act and all
persons who may form a “group” (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) with
Dealer (collectively, “Dealer Group”) “beneficially own” (within the meaning of Section 13 of the
Exchange Act) without duplication on such day and (B) the denominator of which is the number of
Shares outstanding on such day. In the case of a transfer or assignment by Counterparty of its
rights and obligations hereunder and under the Agreement, in whole or in part (any such Options so
transferred or assigned, the “Transfer Options”), to any party, withholding of such consent by
Dealer shall not be considered unreasonable if such transfer or assignment does not meet the
following reasonable conditions that Dealer may impose:





     (A) With respect to any Transfer Options, Counterparty shall not be released from its
notice and indemnification obligations pursuant to Section 8(e) or any obligations under
Section 2 (regarding Extraordinary Events) or 8(d) of this Confirmation;




     (B) Any Transfer Options shall only be transferred or assigned to a third party that
is a U.S. person (as defined in the Internal Revenue Code of 1986, as amended);




     (C) Such transfer or assignment shall be effected on terms, including any reasonable
undertakings by such third party (including, but not limited to, undertakings with respect
to compliance with applicable securities laws in a manner that, in the reasonable judgment
of Dealer, will not expose Dealer to material risks under applicable securities laws) and
execution of any documentation and delivery of legal opinions with respect to securities
laws and other matters by such third party and Counterparty as are requested and
reasonably satisfactory to Dealer;




     (D) Dealer will not, as a result of such transfer and assignment, be required to pay
the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement
greater than an amount that Dealer would have been required to pay to Counterparty in the
absence of such transfer and assignment;




     (E) An Event of Default, Potential Event of Default or Termination Event will not
occur as a result of such transfer and assignment;




     (F) Without limiting the generality of clause (B), Counterparty shall have caused the
transferee to make such Payee Tax Representations and to provide such tax documentation as
may be reasonably requested by Dealer to permit Dealer to determine that results described
in clauses (D) and (E) will not occur upon or after such transfer and assignment; and




     (G) Counterparty shall be responsible for all reasonable costs and expenses,
including reasonable counsel fees, incurred by Dealer in connection with such transfer or
assignment.



     (g) Staggered Settlement. Dealer may, by notice to Counterparty prior to any Settlement Date
(a “Nominal Settlement Date”), elect to deliver the Shares on one or more dates (each, a “Staggered
Settlement Date”) or at two or more times on the Nominal Settlement Date as follows:




     (i) in such notice, Dealer will specify to Counterparty the related Staggered
Settlement Dates (each of which will be on or prior to the 20th Exchange
Business Day after such Nominal Settlement Date, but not prior to the earlier of the
relevant Conversion Date and the first day of the relevant Observation Period) or delivery
times and how it will allocate the Shares it is required to deliver under “Delivery
Obligation” (above) among the Staggered Settlement Dates or delivery times; and



16









 






     (ii) the aggregate number of Shares that Dealer will deliver to Counterparty hereunder
on all such Staggered Settlement Dates and delivery times will equal the number of Shares
that Dealer would otherwise be required to deliver on such Nominal Settlement Date.



     (h) Disclosure. Effective from the date of commencement of discussions concerning the
Transaction, Counterparty and each of its employees, representatives, or other agents may disclose
to any and all persons, without limitation of any kind, the tax treatment and tax structure of the
Transaction and all materials of any kind (including opinions or other tax analyses) that are
provided to Counterparty relating to such tax treatment and tax structure.



     (i) No Netting and Set-off. The provisions of Section 2(c) of the Agreement shall not apply
to the Transaction. Each party waives any and all rights it may have to set-off delivery or
payment obligations it owes to the other party under the Transaction against any delivery or
payment obligations owed to it by the other party, whether arising under the Agreement, under any
other agreement between parties hereto, by operation of law or otherwise.



     (j) Equity Rights. Dealer acknowledges and agrees that this Confirmation is not intended to
convey to it rights with respect to the Transaction that are senior to the claims of common
stockholders in the event of Counterparty’s bankruptcy. For the avoidance of doubt, the parties
agree that the preceding sentence shall not apply at any time other than during Counterparty’s
bankruptcy to any claim arising as a result of a breach by Counterparty of any of its obligations
under this Confirmation or the Agreement. For the avoidance of doubt, the parties acknowledge that
the obligations of Counterparty under this Confirmation are not secured by any collateral that
would otherwise secure the obligations of Counterparty herein under or pursuant to any other
agreement.



     (k) Early Unwind. In the event the sale by Counterparty of the Convertible Securities is not
consummated pursuant to the Purchase Agreement for any reason by the close of business in New York
on June 10, 2008 (or such later date as agreed upon by the parties, which in no event shall be
later than June 17, 2008) June 10, 2008 or such later date being the “Early Unwind Date”), the
Transaction shall automatically terminate (the “Early Unwind”) on the Early Unwind Date and the
Transaction and all of the respective rights and obligations of Dealer and Counterparty hereunder
shall be cancelled and terminated and Counterparty shall pay to Dealer[, other than in cases
involving a breach of the Purchase Agreement by the initial purchasers,]1 an amount in
cash equal to the aggregate amount of reasonable costs and expenses relating to the unwinding of
Dealer’s hedging activities in respect of the Transaction (including market
losses incurred in reselling any Shares purchased by Dealer or its affiliates in connection
with such hedging activities, unless Counterparty agrees to purchase any such Shares at the cost at
which Dealer purchased such Shares) or, at the election of Counterparty, deliver to Dealer Shares
with a value equal to such amount, as reasonably determined by the Calculation Agent, in which
event the parties shall enter into customary and commercially reasonable documentation relating to
the registered or exempt resale of such Shares. Following such termination and cancellation and
payment or delivery, each party shall be released and discharged by the other party from, and
agrees not to make any claim against the other party with respect to, any obligations or
liabilities of either party arising out of, and to be performed in connection with, the Transaction
either prior to or after the Early Unwind Date. Dealer and Counterparty represent and acknowledge
to the other that upon an Early Unwind and following the payment referred to above, all obligations
with respect to the Transaction shall be deemed fully and finally discharged.



     (l) Payments by Counterparty upon Early Termination. The parties hereby agree that,
notwithstanding anything to the contrary herein, in the Definitions or in the Agreement, following
the payment of the Premium and the Additional Premium, if any, in the event that an Early
Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is
designated with respect to the Transaction or the Transaction is terminated or cancelled pursuant
to Article 12 of the Equity Definitions and, as a result, Counterparty would owe to Dealer an
amount calculated under Section 6(e) of the Agreement or Article 12 of the Equity Definitions, such
amount shall be deemed to be zero.



     (m) Governing Law. THE AGREEMENT, THIS CONFIRMATION AND ALL MATTERS ARISING IN CONNECTION
WITH THE AGREEMENT AND THIS CONFIRMATION SHALL





 




			
	1	 	To be deleted if Dealer is not an Initial Purchaser.





17









 




BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW
DOCTRINE, OTHER THAN TITLE 14 OF THE NEW YORK GENERAL OBLIGATIONS LAW).




     (n) Amendment. This Confirmation and the Agreement may not be modified, amended or
supplemented, except in a written instrument signed by Counterparty and Dealer.



     (o) Counterparts. This Confirmation may be executed in several counterparts, each of which
shall be deemed an original but all of which together shall constitute one and the same instrument.



     9. Arbitration.



     (a) All parties to this Confirmation are giving up the right to sue each other in court,
including the right to a trial by jury, except as provided by the rules of the arbitration forum in
which a claim is filed.



     (b) Arbitration awards are generally final and binding; a party’s ability to have a court
reverse or modify an arbitration award is very limited.



     (c) The ability of the parties to obtain documents, witness statements and other discovery is
generally more limited in arbitration than in court proceedings.



     (d) The arbitrators do not have to explain the reason(s) for their award.



     (e) The panel of arbitrators will typically include a minority of arbitrators who were or are
affiliated with the securities industry, unless Counterparty is a member of the organization
sponsoring the arbitration facility, in which case all arbitrators may be affiliated with the
securities industry.



     (f) The rules of some arbitration forums may impose time limits for bringing a claim in
arbitration. In some cases, a claim that is ineligible for arbitration may be brought in court.



     (g) The rules of the arbitration forum in which the claim is filed, and any amendments
thereto, shall be incorporated into this Confirmation.



     (h) Counterparty agrees that any and all controversies that may arise between Counterparty and
Dealer, including, but not limited to, those arising out of or relating to the Agreement or the
Transaction hereunder, shall be determined by arbitration conducted before The New York Stock
Exchange, Inc. (“NYSE”) or NASD Dispute Resolution (“NASD-DR”), or, if the NYSE and NASD-DR decline
to hear the matter, before the American Arbitration Association, in accordance with their
arbitration rules then in force. The award of the arbitrator shall be final, and judgment upon the
award rendered may be entered in any court, state or federal, having jurisdiction.



     (i) No person shall bring a putative or certified class action to arbitration, nor seek to
enforce any pre-dispute arbitration agreement against any person who has initiated in court a
putative class action or who is a member of a putative class who has not opted out of the class
with respect to any claims encompassed by the putative class action until: (i) the class
certification is denied; (ii) the class is decertified; or (iii) Counterparty is excluded from the
class by the court.



     (j) Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any
rights under this Confirmation except to the extent stated herein.



18









 





     Counterparty hereby agrees (a) to check this Confirmation carefully and immediately upon
receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm
that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the
agreement between Dealer and Counterparty with respect to the Transaction, by manually signing this
Confirmation or this page hereof as evidence of agreement to such terms and providing the other
information requested herein and immediately returning an executed copy to [          ],
Facsimile No. [          ].



	 	 	 	 	 
	 	Yours faithfully,



[INSERT DEALER NAME]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Agreed and Accepted By:




NETAPP, INC.




	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title: