None.
\nThe Shares will be issued in your name on the relevant vesting date (or shortly thereafter) and will be delivered to the brokerage account you are required to set up with the Company’s designated broker prior to the relevant vesting date.
\nRestricted Stock Units are generally non-transferable until they vest.
\nYou can sell, transfer and/or encumber the Shares as soon as they are deposited into your brokerage account, subject to any applicable provisions of the Company’s insider trading policy and insider trading / market abuse laws.
\nOn cessation of employment for any reason, any unvested Restricted Stock Units will be forfeited by you at no cost to the Company. For the avoidance of doubt, after cessation of your employment, you will continue to hold any Shares previously received on vesting of your Restricted Stock Units.
\nShares of common stock in a U.S. corporation are analogous to ordinary shares of an Australian corporation. Each holder of a share of common stock is entitled to one vote for every share held.
\nDividends may be paid on the Shares out of any funds of the Company legally available for dividends at the discretion of the board of directors of the Company.
\nThe Shares are listed and may be traded on the Nasdaq Stock Market in the U.S. (NASDAQ:NTAP).
\nShares are not liable to any further calls for payment of capital or for other assessment by the Company and have no sinking fund provisions, pre-emptive rights, conversion rights or redemption provisions.
\nYou should have regard to risk factors relevant to investment in securities generally and, in particular, to the holding of Shares.
\n41
\n4834-0987-2372.2
\n\n
 
\nFor example, the price at which Shares are quoted on the Nasdaq may increase or decrease due to a number of factors. There is no guarantee that the price of the Shares will increase. Factors which may affect the price of the Shares include fluctuations in the domestic and international market for listed stocks, general economic conditions, including interest rates, inflation rates, commodity prices, changes to government fiscal, monetary or regulatory policies, legislation or regulation, the nature of the markets in which the Company operates and general operational and business risks.
\nMore information about potential factors that could affect the Company’s business and financial results is included in the Company’s most recent filings with the U.S. Securities and Exchange Commission (“SEC”), including the Company’s Quarterly Reports on Form 10-Q and, following the close of the Company’s fiscal year, the Company’s Annual Report on Form 10-K. Copies of these reports are available at https://www.sec.gov or on the Company’s Investor Relations website at http://investors.netapp.com/investor-relations.
\nIn addition, the value of the Shares you acquire at vesting will be affected by the U.S./Australian dollar exchange rate. Participation in the Plan involves certain risks related to fluctuations in this rate of exchange.
\nThe board of directors of the Company may, from time to time, amend, alter, suspend or terminate the Plan at any time. In addition, some amendments to the Plan may require shareholder approval.
\nThe following is a general summary of the Australian tax consequences of your participation in the Plan as of April 2019. You should not rely on the summary as anything other than a broad guide and you should obtain independent taxation advice specific to your particular circumstances to understand how your participation in the Plan may impact you. The summary below assumes that you are resident in Australia for the entire vesting period. If you were working/ residing in another country during the vesting period, you may be subject to tax in such country. The summary also assumes that when you sell Shares acquired under the Plan, the sale will occur in an arms’ length transaction (this generally will be the case if you sell your Shares on the Nasdaq).
\nEnrollment in the Plan: No tax.
\nAcquisition of Shares under the Plan: Restricted Stock Units are taxed at vesting (or an earlier applicable taxing point, as described below) based on the market value of the Shares received (assuming the Shares are not otherwise subject to any additional restrictions) or the amount of cash paid.
\n42
\n4834-0987-2372.2
\n\n
 
\nUnder the Plan, Restricted Stock Units should qualify for a deferral of the taxing point under Australian income tax laws. Australian tax in respect of these Restricted Stock Units will be deferred until the earlier of any of the following taxing points:
\nIn the event that you receive Shares subject to restrictions (that is, the Shares received cannot be sold by you unless certain conditions are satisfied), then the taxing point should arise once the restrictions are removed (and the tax will be based on the then market value of the Shares).
\nIf you are paid a cash amount equal to the market value of the Shares as at the vesting date, this amount is reported as salary and wages income in your income tax return for the year in which the Restricted Stock Units vested. In this case, your employer will be required to withhold amounts from these payments and you will receive the “net” or “after tax” amount.
\nTax Payment/ Reporting: Generally, your employer only will be required to withhold for taxes due by you if Restricted Stock Units are settled in cash.
\nThe Company will report the taxable amount at vesting to the Australian Tax Office (“ATO”) by 14 August after the end of the financial year in which the vesting occurs. The Company will provide you with an "ESS Statement" by 14 July after the end of that financial year. You will be required to pay the taxes due to the ATO yourself.
\nSale of Shares: If you sell Shares within thirty (30) days of vesting, you will be taxed as described above.
\nOtherwise, you will be subject to capital gains tax when you sell your Shares to the extent that the sale proceeds exceed your cost basis in the Shares. Your cost basis in the Shares generally will be equal to the market value of the Shares at vesting plus any incidental costs of disposal. If you hold the Shares for at least twelve (12) months after acquisition (excluding the dates you acquired and sold the Shares), you may discount the amount to be included in your assessable income by fifty-percent (50%). If the sale proceeds are lower than your cost basis in the Shares sold, you will realize a capital loss which may be used to offset capital gains realized in the current tax year or in any subsequent tax year, but may not be used to offset other types of income (e.g., salary or wage income). You are responsible for reporting and paying any tax due in relation to the sale of Shares.
\n43
\n4834-0987-2372.2
\n\n
 
\nEmployees will not be subject to U.S. tax by reason only of their participation in the Plan. However, liability for U.S. taxes may occur if an employee is otherwise subject to U.S. taxes. In addition, any dividends paid to employees will be subject to U.S. tax.
\nThe above is an indication only of the likely U.S. taxation consequences for Australian Employees who participate in the Plan. Employees should seek their own advice as to the U.S. taxation consequences of participation.
\n 
\nWe urge you to carefully review the information contained in this Offer Document and the Additional Documents.
\n 
\n 
\nYours sincerely
\n 
\nNetApp, Inc.
\n 
\n 
\n 
\n* * *
\n44
\n4834-0987-2372.2
\n\n