NETAPP, INC. EMPLOYEES 401(k) SAVINGS PLAN

Transcription

1 NETAPP, INC. EMPLOYEES 401(k) SAVINGS PLAN Summary Plan Description (Effective January 1, 2015) Plan Highlights NetApp, Inc. (the "Company") maintains the NetApp, Inc. Employees 401(k) Savings Plan (the "Plan") to help you save for retirement. The following information contains highlights of the Plan. Please read the entire Summary Plan Description for more details. Both the Plan Highlights and the Summary Plan Description are effective January 1, Joining the Plan If you are an eligible employee, you may begin participating in the Plan as soon as administratively possible following your date of hire. Saving is Easy Your contributions to the Plan are made through the convenience of automatic payroll deductions. You may contribute from 1% to 50% of your pay per pay period on a pretax basis as pre-tax 401(k) contributions and/or an after tax basis as Roth 401(k) contributions. Contributing to the Plan on a pretax basis with pre-tax 401(k) contributions allows you to reduce the amount of current income taxes you pay each year. Contributing to the Plan on an after-tax basis with Roth 401(k) contributions offers you the opportunity for the earnings on the contributions to be tax-free when distributed (if certain requirements are met). Company Matching Contributions The Company will match a percentage of your pre-tax 401(k) contributions and/or your Roth 401(k) contributions each year. Managing your investments The Plan offers a range of investment options so you can put your money to work in a number of ways. Flexibility You may change the investment of your account balance or the amount you are contributing at any time. You may also stop contributing at any time. Vesting Your pre-tax 401(k), Roth 401(k), catch-up and rollover contributions are always 100% vested. This means you have full ownership of such contributions. Generally any company matching contributions made on your behalf are 100% vested. See the section entitled Company Matching Contributions for more detailed information and Vesting for exceptions. Accessing your Account The Plan allows you to borrow against your vested account balance. In addition, the Plan allows in service withdrawals under certain limited circumstances. Leaving the Company When you leave the Company, your vested account balance will be paid to you or you may elect to have your vested account transferred to an Individual Retirement Account ("IRA") or to another eligible retirement plan. Under certain circumstances, you may also elect to defer distribution of your vested account. Important Note This booklet is called a Summary Plan Description and is intended to provide a brief description of the Plan's features. Complete details of the Plan are contained in the Plan document. If there is a difference between this booklet and the Plan document, the Plan document (available in your Human Resources Department) will govern. The information provided on taxes is general in nature and may not apply to your personal circumstances. You should consult a tax advisor for more information.

2 This Summary Page & Topic 2 Introduction 2 Joining the Plan 3 Pre-Tax and Roth 401(k) Contributions 5 Rollover Contributions 6 Company Matching Contributions 8 Managing Your Investments 10 Access to Your Account During Employment 13 Vesting 15 Leaving the Company 17 Other Important Facts 23 Appendix Matching Contribution Examples INTRODUCTION Chances are, you're hoping for a long and fulfilling retirement. But a significant part of how rewarding your retirement experience will depend on how well you have planned for it. Your Retirement and the Plan It's not easy to save for the future. Planning to save and actually doing it are two different things. Often the "doing" is the most difficult. The Plan offers an easy way to add to your long term retirement savings. You may contribute to the Plan on a pre-tax basis with pre-tax 401(k) contributions or an after-tax basis with Roth 401(k) contributions. The Company will match a percentage of your pre-tax 401(k) contributions and/or Roth 401(k) contributions each year. Your personal financial security is one of life's most important objectives. The Company shares your concern and offers the Plan as one way to help you build a strong financial future. Fidelity Services To help with your retirement planning, many features of the Plan are available to you 24 hours a day, seven days a week, over an automated telephone system -- Fidelity Retirement Benefits Line at (800) You can also access Fidelity NetBenefits online at provided by Fidelity Management Trust Company ("Fidelity"). The Fidelity Retirement Benefits Line also allows you to access a Participant Service Representative if you call between the hours of 8:30 am EST to 8:00 pm in the time zone from which you are calling on any business day that the New York Stock Exchange (NYSE) is open ("NYSE business day"). All Representative-assisted calls will be recorded for your protection. NetBenefits enables you to obtain information about your Plan account, enroll in the Plan, request an account statement and make changes to your contribution percentage and investment elections, as well as apply for a loan or distribution. You should contact your Human Resources Department if you have any questions about using these services. Plan Highlight Immediate Participation If you are an eligible employee, you may begin participating in the Plan as soon as administratively possible following your date of hire. JOINING THE PLAN Each eligible employee (as defined below) of the Company, NetApp Federal Systems, Inc. or other participating employer of the Plan who is paid through a U.S. payroll is eligible to participate in the Plan. As an eligible employee, you may begin to participate in the Plan as soon as administratively possible following your date of hire. Eligible Employee An eligible employee is any employee of the Company or other participating employer of the Plan, other than a leased employee, non-resident alien with no U.S. source income, temporary employee, intern, employee working in Puerto Rico or an -2-

3 employee covered by a collective bargaining agreement (unless the terms of the bargaining agreement provides otherwise). In any event, an eligible employee will not include a worker who for any period is classified by the Company as an independent contractor (even if that classification later changes). You should contact your Human Resources Department if you have any questions concerning your eligibility to participate in the Plan. How to Begin Making Contributions When you become eligible to participate in the Plan, enrollment materials will be provided to you. You may enroll in the Plan and begin making contributions under the Plan by contacting Fidelity by phone or via the Internet. You must also complete a Beneficiary Designation Form on Fidelity's NetBenefits website. Plan Highlight Saving is easy, with optional ways to save Your pre-tax 401(k) contributions and/or Roth 401(k) contributions in the Plan are made through the convenience of automatic payroll deductions. You may contribute from 1% to 50% of your pay per pay period in any combination of these contributions. Advantages of pre-tax and aftertax Roth 401(k) savings exist which you should discuss with your financial advisor. PRE-TAX AND ROTH 401(k) CONTRIBUTIONS You may contribute from 1% to 50% of your eligible compensation (as defined below) each pay period in whole percentages in any combination of pre-tax 401(k) contributions and/or Roth 401(k) contributions. Your eligible compensation will be reduced and your pre-tax 401(k) and/or Roth 401(k) contributions will begin according to your election beginning with the first payroll period on or after the date your election is effective. Your pre-tax 401(k) and Roth 401(k) contributions are eligible for company matching contributions. See Company Matching Contributions, below. Your Eligible Compensation Your eligible compensation means your Form W-2 earnings from the Company or other participating employer of the Plan. However, your eligible compensation does not include reimbursements and other expense allowances, fringe benefits (cash and non-cash), moving expenses, deferred compensation, welfare benefits, severance pay, non-qualified stock option exercise income, restricted stock income, qualified stock option income and any recoverable draw payment under a company commissions policy. Your eligible compensation will include any of your pre-tax 401(k) contributions and/or Roth 401(k) contributions made under the Plan, your pre-tax contributions under a Code Section 125 cafeteria plan or Code Section 132(f) qualified transportation fringe benefit plan maintained by the Company or other participating employer of the Plan and any differential pay with respect to your service in uniformed services (as defined in Chapter 43 of Title 38 of the United States Code). Upon your termination of employment, your eligible compensation will not include amounts received by you following such termination, except for amounts paid within 60 days after your termination of employment which (i) would otherwise have been paid to you in the course of your employment as regular compensation, commissions, bonuses or other similar compensation or (ii) are payments for accrued sick, vacation or other leave, but only if you would have been able to use such leave if your employment had continued. Note: Under IRS rules, for 2015, your eligible compensation in excess of $265,000 is not taken into account for Plan contribution purposes. This limit is periodically adjusted thereafter by the IRS. -3-

4 Plan Highlight The Plan provides optional ways to save, with different tax advantages and options By making pre-tax 401(k) contributions, you reduce the amount of current income taxes you pay each year. By making Roth 401(k) contributions, you reduce the amount of taxes that you pay when take a distribution from the Plan. You should discuss your options with your financial advisor. Pre-Tax 401(k) Contributions The Plan allows you to save on a pre-tax basis under the Plan with pre-tax 401(k) contributions. Your pre-tax 401(k) contributions reduce your current federal and most state income taxes and the earnings on the contributions are not currently taxable. However, the contributions are subject to FICA taxes (for Social Security and Medicare benefits) when made to the Plan. Upon distribution, your pre-tax 401(k) contributions and earnings are taxable for federal and most state income taxes. In addition, the distribution generally is subject to an additional 10% federal income tax if you are not at least age 59½. Roth 401(k) Contributions The Plan also allows you to save on an after-tax basis under the Plan with Roth 401(k) contributions. Your Roth 401(k) contributions do not reduce your current federal and most state income taxes, but the earnings on the contributions are not currently taxable. In addition, the contributions are subject to FICA taxes (for Social Security and Medicare benefits) when made to the Plan. Upon distribution, your Roth 401(k) contributions will not be taxable for federal and most state income taxes (having been taxed when made to the Plan), but their earnings when distributed will be taxable for federal and most state income taxes and generally subject to an additional 10% federal income tax if you are not at least age 59½. However, the earnings on your Roth 401(k) contributions will be non-taxable for federal and most state income taxes, if the distribution is made after (i) five tax years beginning with the first tax year of your Roth 401(k) contributions and (ii) your age 59½, death or disability. Plan Highlight The IRS has contribution limit and rules for your contributions IRS Contribution Limits The IRS limits the total amount of your pre-tax 401(k) and Roth 401(k) contributions each year. For 2015, the limit is $18,000. Catch-Up Contributions If you are or will be at least age 50 as of the end of a calendar year, you may elect to make "catch-up contributions for the year of pre-tax 401(k) contributions and/or Roth 401(k) contributions. The IRS limits the total amount of your catch up pre-tax 401(k) and Roth 401(k) contributions each year. For 2015, the limit is $6,000. Also, the 50% limit for your contributions noted above does not apply to catch up contributions. Your catch-up contributions are not eligible for company matching contributions. See Company Matching Contributions, below. Return of Excess Contributions If your pre-tax 401(k) contributions and/or Roth 401(k) contributions under the Plan exceed the IRS $18,000 and $6,000 limits above, the excess and any earnings will be returned to you. Also, if in any year you participated in another employer's 401(k) plan and your total pre-tax 401(k) contributions and Roth 401(k) contributions to both plans exceed $18,000-4-

5 and $6,000 limits in 2015, you may request that the excess and any earnings be returned to you from the Plan, provided you make the request no later than the March 1st following the year of the excess contributions. IRS Nondiscrimination Tests Certain annual IRS nondiscrimination tests may require the reduction of the contribution percentage of pre-tax 401(k) and Roth 401(k) contributions of certain higher-paid employees. In addition, these tests may result in refunds of the contributions after the end of the year. You will be informed if you are affected by these tests. Plan Highlight Example To illustrate the difference in spendable income, the example compares saving outside the Plan to saving under the Plan. Retirement Savings Potential Many people save on an after-tax basis outside of retirement plans and IRAs. This means that any money they save has already been taxed and the earnings on the savings are taxable as they are earned. Under the Plan, however, you have the option to save on a pre-tax basis with pre-tax 401(k) contributions or an after-tax basis with Roth 401(k) contributions. See Your Pre- Tax 401(k) Contributions and Roth 401(k) Contributions, above. The following example illustrates the difference in spendable income between pre-tax 401(k) contributions and Roth 401(k) contributions, assuming you earn $100,000 a year, save 10% of your eligible compensation and have a combined 20% federal and state income tax rate: Pre-Tax 401(k) Roth 401(k) Eligible compensation $100,000 $100,000 Pre-tax 401(k) savings (10,000) (0) Adjusted gross pay 90, ,000 Federal & State taxes (18,000) (20,000) Social Security Taxes (7,650) (7,650) Net pay 64,350 72,350 Roth 401(k) savings (0) (10,000) Spendable income $64,350 $62,350 Difference in spendable income +$2,000 However, significant tax differences exist between pre-tax 401(k) contributions and Roth 401(k) contributions. See Your Pre-Tax 401(k) Contributions and Roth 401(k) Contributions, above, regarding the tax differences of these contributions, both when made to and distributed from the Plan. Vesting You are at all times fully and immediately vested in your pre-tax 401(k) and Roth 401(k) contributions and all earnings on such contributions. Plan Highlight You can consolidate your retirement savings with the Plan. ROLLOVER CONTRIBUTIONS The Plan offers you the opportunity to consolidate your retirement savings. You can make a rollover contribution to the Plan of the following amounts from a previous employer s 401(k) plan, other eligible employer retirement plan or your Individual -5-

6 Retirement Account (IRA): Retirement Plan. The pre-tax amounts from your former employer's 401(k) plan or other eligible retirement plan. You may not include any after-tax amounts. IRA. The pre-tax amounts from your IRA. (By law, after-tax amounts from your IRA cannot be rolled over to the Plan and the Plan does not otherwise permit their rollover.) Roth 401(k) Account. Your Roth 401(k) account balance from a former employer's 401(k) plan or other eligible retirement plan, but only if directly transferred from the plan to the Plan. (By law, you are not permitted to roll over a Roth IRA to the Plan.) Also, a rollover of Roth contributions from a Section 403(b) plan are not permitted to the Plan. You can make a rollover contribution either in a direct transfer from the retirement plan or IRA or from you after distribution from the plan or IRA. All rollover contributions must be made in cash and, therefore, cannot include a plan loan or existing securities or other investments in the plan or IRA. Note that any distribution of pre-tax amounts you receive from the plan or IRA must be rolled over to the Plan within 60 days after your receipt of the distribution. You are permitted to roll over to the Plan an equivalent cash amount of any federal 20% withholding amount on the distribution from the plan. Please contact Fidelity if you are interested in making a rollover contribution. Vesting You are at all times fully and immediately vested in your rollover contributions and all earnings on such contributions. Plan Highlight Company Matching Contributions Company matching contributions help your Plan account grow even faster. COMPANY MATCHING CONTRIBUTIONS When you make pre-tax 401(k) and/or Roth 401(k) contributions to the Plan, the Company makes a matching contribution for you under the Plan. The Company believes it is important to provide you an incentive to make contributions from your compensation to the Plan, and to otherwise increase your retirement savings under the Plan, for your future retirement security. Matching Formula Effective January 1, 2015, the Company will match 100% of the first 2% of your eligible compensation you contribute to the Plan as regular pre-tax 401(k) contributions and/or Roth 401(k) contributions for the year, plus 50% of the next 4% of your eligible compensation you contribute to the Plan as regular pre-tax 401(k) contributions and/or Roth 401(k) contributions for the year. However, under the Plan, your maximum matching contribution is $6,000 per year. The Plan matches only your regular pre-tax 401(k) contributions and/or Roth 401(k) contributions to the Plan (i.e., up to $18,000 for 2015). The Plan, therefore, does not match your catch-up pre-tax 401(k) contributions and/or Roth 401(k) contributions to the Plan applicable if you are at least age 50 (i.e., up to $6,000 for 2015). Based on the Plan s matching formula, the Company provides you with a net 4% matching contribution per year (of your eligible compensation), provided you contribute at -6-

7 least 6% of your eligible compensation to the Plan as regular pre-tax 401(k) contributions and/or Roth 401(k) contributions for the year. However, the maximum matching contribution is $6,000 a year. Payroll Period Contribution The Company calculates and makes the company matching contribution to the Plan each payroll period during the year, using the matching formula above, based on your pre-tax 401(k) and Roth 401(k) contributions for that payroll period. Additional True Up Matching Contribution In addition, the Company will make an additional or true up matching contribution to the Plan each payroll period, if necessary for you to receive the full matching contribution based on all your pre-tax 401(k) and Roth 401(k) contributions for the year. This additional contribution will allow you to make up previously lost matching contributions if, for example, you made contributions during part of the year at only 4% (less than the 6% threshold for the full match) and then later at 8% of your eligible compensation (less than the 6% threshold). The true up contribution for a payroll period will equal (i) the full matching contribution for the current year under the matching formula above, based on all of your pre-tax 401(k) and Roth 401(k) contributions and compensation for the year, less (ii) the total matching contributions actually made for all payroll periods of the year. With this true up matching contribution, if your pre-tax 401(k) and Roth 401(k) contributions reach the IRS maximum limit before the end of the year ($18,000 for 2015), your contributions will stop but the company matching contribution will continue based on the true up matching calculation above, until you reach (if applicable to you) the $6,000 annual maximum matching contribution. For an example of the true matching contribution, see the attached Appendix which contains examples of the company matching contribution and true up matching contribution. IRS Nondiscrimination Tests Certain annual IRS nondiscrimination tests may require the reduction of company matching contributions of certain higher-paid employees. You will be notified if these tests apply to you. The Match and Your Retirement Savings What does this company matching contribution mean to you? Go back to the $100,000 a year example. Your pre-tax 401(k) contributions and/or Roth 401(k) contributions of $10,000 is 10% of your eligible compensation. In this example, with company matching contributions, an additional $4,000 (100% of $2,000 and 50% of the next $4,000) will be allocated to your account each year, in addition to your $10,000 of contributions, for a total retirement savings of $14,000 for the year. More on Matching Contributions Your company matching contributions are not subject to federal and state income taxes and the earnings on the contributions are not currently taxable. In addition, as employer contributions, the contributions are subject to FICA taxes (for Social Security and Medicare benefits) when made to the Plan. Upon distribution, your company matching contributions and earnings are taxable for federal and most state income taxes. In addition, the distribution generally is subject to an -7-

8 additional 10% federal income tax if you are not at least age 59½. distribution is not subject to FICA taxes. However, the While the Company intends to make matching contributions each year, the Company reserves the right to reduce or eliminate matching contributions for any year. Matching Contribution Examples The attached Appendix contains examples which illustrate the company matching contribution and true up matching contribution. Vesting Effective on and after October 24, 2014, your vested interest in your company matching contributions attributable to your employment on and after October 24, 2014 will be at all times 100%. Your vested interest in your company matching contributions attributable to your employment prior to October 24, 2014 also will be 100%, if you were employed by the Company, a participating employer of the Plan or other related employer on October 24, If you were not so employed on or after October 24, 2014, please refer to the section entitled Vesting below for information regarding your vesting in company matching contributions. Plan Highlight You manage your investments The Plan offers a range of investment options so you can put your money to work in a number of ways. MANAGING YOUR INVESTMENTS You work hard for your money. One of the advantages of the Plan is that it lets your money work for you. The Plan provides you with a range of investment options. The Plan permits you to invest in the individual investment options available under the Plan. You can invest in any of the Plan's individual investment options in increments of 1%. Different investment options may be offered from time to time and you will be informed in advance of any changes. Information regarding the investment options is contained in separate investment materials available from Fidelity Investments. Prospectuses for any mutual fund options are available from Fidelity. You should review this information before investing under the Plan. ERISA Section 404(c) Plan The Plan is intended to constitute a Plan described in Section 404(c) of the Employee Retirement Income Security Act of 1974 (ERISA). Section 404(c) is a provision of ERISA providing special rules for participant-directed plans, like ours, which permit participants to exercise control over the assets in their accounts. If a Plan complies with Section 404(c), the Plan's fiduciaries will not be liable for the investment performance or losses resulting directly from participant-directed investment decisions. This means that you or your beneficiary(ies), if applicable, are responsible for investment decisions you or your beneficiary(ies) make under the Plan and any resulting investment activity. Upon your request, the Administrator will furnish you with any available financial reports or statements, the most current prospectus of each investment fund and the investment -8-

9 performance of each fund determined net of expenses. Information that can be found in a prospectus includes a description of the annual operating expenses of the fund and the aggregate amount of such expenses expressed as a percentage of average net assets of the designated investment alternative, a list of the assets comprising the fund along with the value of each asset, the name of any issuer of any fixed rate investment contract issued by a bank, savings and loan association or insurance company and the term of the contract and rate of return and information concerning the value of shares or units in the fund. Current investment fund information is also available by calling Fidelity or accessing Fidelity NetBenefits at Plan Highlight You have flexibility You can change your Plan contributions, and may even elect to stop contributing, at any time. In addition, you can change the way your Plan account balance is invested at any time. Changing Contributions and Investments Nearly everyone's personal financial situation is likely to change over the years. Because of this, the Plan offers you the flexibility to change the amount of your contributions or to stop your contributions entirely. In addition, the Plan permits you to change your investment elections Contributions You may elect to change how much of your pay you contribute as pre-tax and/or Roth 401(k) contributions, from 1% to 50% per pay period, through Fidelity's telephone system or Internet website. Your contribution change will be effective as soon as administratively possible thereafter. Of course, you may also elect to stop contributing at any time. If you elect to stop contributing, your contributions will cease as soon as administratively possible following your election. If you do choose to stop contributing, you may begin making contributions again as of any following payroll period, or as soon as administratively possible thereafter, through Fidelity's automated telephone system or Internet website. If you do not direct how the contributions to your Plan account are to be invested, the contributions will be invested in the Plan's default fund, which is currently the Vanguard Target Retirement Trust II fund with the target retirement date closest to the year you might retire, based on your current age and assuming a retirement age of 65. Investments You may change your investment election through Fidelity's automated telephone system or Internet website. Investment election changes made and confirmed before 1:00 pm PT on any NYSE business day will generally be effective as of the close of that day. A change confirmed on or after 1:00 pm PT, or on weekends or holidays, will generally be effective as of the close of the next NYSE business day. In the event the NYSE closes prior to 1:00 pm PT on any NYSE business day, a change made and confirmed before the time the NYSE closes will generally be effective as of the close of that day. A change made or confirmed on or after such closing time will generally be effective as of the close of the next NYSE business day. In the event an investment option does not have sufficient liquidity to meet same day redemption requests, your change will be effective as soon as administratively possible thereafter. A written confirmation statement will be sent to you after your transaction depending on the U.S. Postal Service. If you change your investment election with respect to both future contributions and your existing account balance among the individual investment -9-

10 option, you may receive separate confirmation(s). You should expect to receive the confirmation within five to seven business days, depending on the U.S. Postal Service. If you fail to receive a confirmation within seven business days, please call Fidelity and speak with a Participant Service Representative. Plan Highlight You have access to your account The Plan includes provisions for loans and in-service withdrawals under certain circumstances. Plan Highlight The Plan allows you to borrow against the value of your vested account balance. It's a way for you to borrow your own money. ACCESS TO YOUR ACCOUNT DURING EMPLOYMENT One of the most commonly asked questions about the Plan is "Can I get my money out of the Plan?" Since the primary purpose of the Plan is to encourage long-term retirement savings, distribution of your vested account normally cannot be made before your retirement or other termination of employment. However, you may borrow from your vested account and withdraw money, if necessary, under certain circumstances. Please note that loans and in-service withdrawals under the Plan may be subject to limitations, in addition to those described below, established by the Plan Administrator in order to anticipate changes in the value of your account due to market fluctuations. Loans The Plan allows you to borrow from your vested account balance under the Plan. The interest you pay on your loan goes back into your own Plan account. You can model your repayment schedule and apply for a loan through Fidelity's automated telephone system or Internet website. A loan fee will be deducted from your account. Please contact Fidelity or the Plan Administrator for details. You may borrow up to the lesser of (i) 50% of your vested account or (ii) $50,000 (reduced by the amount of your highest outstanding loan balance for the previous 12- month period). You may only have one loan outstanding at any time. Once you repay an existing loan, you must wait fifteen (15) days before you can request another loan. The interest rate is fixed and will be equal to the Prime Rate in effect at the time of application plus 1%. The minimum amount you can borrow is $1,000. The maximum loan amount available to you will be determined by your vested account balance. You may borrow up to the lesser of (i) 50% of your vested accounted balance or (ii) $50,000. This $50,000 maximum is reduced, however, by the amount of your highest outstanding loan balance for the previous 12-month period. Loans must normally be repaid through payroll deductions over a period of not more than five years. However, if you are using the loan to purchase your principal residence, the loan can be repaid over a period of not more than ten years. Loans may be prepaid in full or, with partial payments, at any time without penalty. Failure to repay a loan in accordance with its terms will constitute default. If you are on an authorized leave of absence without pay or with a rate of pay that (after tax withholding) is less than your required loan repayment amount, your loan repayment may be suspended for a period equal to the lesser of one year or the duration of the leave of absence. Interest will continue to accrue during the period of the leave of absence. Upon resumption, the payment amount must not be less than the original payment amount. Further, the loan nevertheless must be paid off no later than the maximum permitted five years (or 10 years for the purchase of a principal residence). If you are absent from employment for a period during which you perform services in the uniformed services (as defined in chapter 45 of title 38 of the United States Code), -10-

11 whether or not such services constitute qualified military service, your loan payments may be suspended during such military service. Interest will continue to accrue during the period of such military service. Upon resumption, the payment amount must not be less than the original payment amount. Further, the loan nevertheless must be paid off no later than the maximum permitted five years (or 10 years for the purchase of a principal residence), extended by the period of such military service. If you stop working for the Company before your loan is repaid, your outstanding loan balance will become due and payable, subject to the grace period set forth in your loan agreement and promissory note. You will have the opportunity to repay your loan during the grace period, but if you fail to do so the outstanding loan balance will automatically be deducted from your vested account balance and treated as taxable income to you. In addition, if you are under age 59½, an additional 10% penalty tax may apply. If you default on your Plan loan, and you do not pay the defaulted amount within 90 days following the payment due date, then under the federal tax laws, it will be considered to be a taxable receipt of your unpaid loan balance. As a result, you will have to pay income taxes on the amount of your unpaid loan and, if you are under age 59½, an additional 10% penalty tax may apply. In addition, interest will generally continue to accrue (for purposes of determining your eligibility for any subsequent loan) until the loan is repaid or you separate from service. You should contact your Human Resources Department for additional information regarding the treatment of loans in default. If you request a distribution from the Plan prior to the end of the grace period and prior to repaying your loan, your outstanding balance will be deducted from your account before it is distributed to you. Once again, that outstanding loan balance will be treated as a taxable distribution to you. You may not roll over the loan to an IRA or other eligible retirement plan. Please Note: The amount distributed to you as a Plan loan will no longer be invested in regular Plan investments until repaid. Earnings on these monies during the loan term will be limited to the interest you pay on the loan. This may reduce the amount of funds available to you when you retire. Plan Highlight Your account is available for certain financial emergencies Hardship Withdrawals Under the Plan, you are permitted to withdraw a portion of your vested account if you experience one of the following financial hardships: Payment of unreimbursed medical expenses incurred by you, your spouse or tax dependents, or to permit you, your spouse or your dependents to obtain medical care which is deductible under federal tax laws (without regard to income limits). Payment of tuition, related educational fees and room and board expenses for the next 12 months of post-secondary education (for example, college, graduate school and/or equivalent courses) for you, your spouse, your children or tax dependents; Payment to prevent eviction from your principal residence or foreclosure on the mortgage of your principal residence; or Payment of funeral or burial expenses for your parent, spouse, child or tax dependent. Costs directly related to the purchase (excluding mortgage payments) of your principal residence. Repair of damage to your principal residence that would qualify for a casualty loss -11-

12 deduction under federal tax laws (determined without regard to whether the loss exceeds any applicable income limit). You may only withdraw the amount of your pre-tax 401(k) contributions and Roth 401(k) contributions, including catch-up contributions (but not including any investment earnings on any such contributions received after December 31, 1988). You may withdraw only the amount needed to meet your hardship. However, the amount of a hardship withdrawal may include any amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution. The withdrawal must be in cash. Also, the withdrawal cannot be rolled over to an IRA or other eligible employer retirement plan. To qualify for a hardship, you must have obtained all distributions, other than hardship distributions, and all non-taxable loans currently available under the Plan and all plans maintained by the Company or a related employer. In addition, your pre-tax 401(k) and Roth 401(k) contributions, and any elective contributions and employee contributions as defined under IRS regulations under all other qualified and non-qualified deferred compensation plans maintained by the Company or a related employer must be suspended for at least 6 months after your receipt of the hardship withdrawal. The amount you withdraw for financial hardship will be subject to the optional federal income tax withholding. If you are under age 59½, an additional 10% penalty tax may apply. The amount you request may be adjusted to pay any applicable Federal, State and local income taxes and penalties. You may obtain a hardship withdrawal through Fidelity's NetBenefits website. You should, however, consult with your tax advisor before exercising this option. Also, you will not be able to make pre-tax contributions to your account for at least six (6) months after a hardship withdrawal. Your hardship withdrawal will be made from your contribution sub-accounts in the following order: (i) your pre-tax 401(k) contributions sub-account; (ii) your catch up pre-tax 401(k) contributions sub-account; (iii) your Roth 401(k) contributions subaccount; and (iv) your catch up Roth 401(k) contributions sub-account. Age 59½ Withdrawals If you have attained age 59½, you may elect to withdraw all or any portion of your vested account balance, from all of your subaccounts under the Plan on a pro-rata basis, subject to rules and procedures as may be established by the Plan Administrator. The withdrawal must be in cash. The money you withdraw may be subject to mandatory 20% federal income tax withholding and state tax withholding, if applicable. It will not, however, be subject to the 10% penalty tax. You should, however, consult with your tax advisor before exercising this option. Withdrawals of Rollover Contributions You may withdraw all or any portion of your account attributable to any rollover contributions you may have made to the Plan, subject to rules and procedures as may be established by the Plan Administrator. The withdrawal must be in cash. The money you withdraw may also be subject to mandatory 20% federal tax withholding and state tax withholding, if applicable. If you are under age 59½, an additional 10% penalty tax may also apply. You should, however, consult with your tax advisor before exercising this option. -12-

13 Plan Highlight Ownership of your account You always have 100% ownership of your own contributions. Your vested interest in your company matching contributions will depend on whether you were employed on October 24, VESTING Vesting means ownership. You are always 100% vested (in other words, you have complete ownership) in your own pre-tax 401(k) contributions, Roth 401(k) contributions, catch-up contributions and any rollover contributions to the Plan and any earnings on such contributions. Effective October 24, 2014 Effective on and after October 24, 2014, your vested interest in your company matching contributions attributable to your employment on and after October 24, 2014 will be at all times 100%. Your vested interest in your company matching contributions attributable to your employment prior to October 24, 2014 also will be 100%, if you (i) were employed by the Company, a participating employer of the Plan or other related employer on October 24, 2014 or (ii) are credited with an hour of service after October 24, 2014 and before you incur five consecutive breaks in service (as defined below). Previous Vesting Schedule If you do not satisfy the requirements above to be fully vested as of October 24, 2014, your vested interest in your company matching contributions attributable to your employment prior to October 24, 2014 will continue to be determined in accordance with the following schedule: Years of Service Percent Vested less than 1 year 0% 1 year but less than 2 years 33-1/3% 2 years but less than 3 years 66-2/3% 3 years or more 100% However, you will be 100% vested in any company matching contributions allocated to your account regardless of your years of service under the Plan, if you terminate employment with the Company on or after your normal retirement date (your 65th birthday) or as a result of your death or disability (as defined below). In addition, you will be 100% vested if you are absent from employment with the Company because of military service and die after December 31, 2006 while performing qualified military service as described in the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). Years of Service A year of service is each plan year during which you complete at least 1,000 hours of service (as defined below). By law, you also will receive credit for years of service while employed by an affiliate of the Company or for service while employed by the Company at a location outside the United States and did not receive United States source income. If you were employed by WebManage Technologies, Inc., Network Appliance Federal Systems, Inc. (which was renamed NetApp Federal Systems, Inc.), Spinnaker Networks LLC, Spinnaker Networks, Inc., Alacritus, Inc., Decru, Inc., Akorri Networks, Inc., Engenio or Cache IQ, Inc. on the date of its acquisition by the Company, then your prior service with these acquired entities was taken into account in determining years of service under the Plan. Also, if you had worked for one of these acquired entities for less than a full calendar year at the time of its acquisition by the Company, you will receive credit -13-

14 under the Plan for a full year of service for that period. If you terminate your employment and are later reemployed by the Company, your previous service may not be counted in determining your years of service. You should contact your Human Resources Department if you have any questions concerning the calculation of your years of service under the Plan. Hours of Service Your hours of service include each hour for which you are directly or indirectly paid or entitled to payment by the Company or an affiliated employer for the performance of duties. Hours of service also include each hour for which you are directly or indirectly paid or entitled to payment by the Company or an affiliated employer for reasons other than the performance of duties (irrespective of whether your employment relationship has terminated with the Company), such as periods of vacation, holiday, illness, incapacity, disability, layoff, jury duty, military duty or leave of absence. However, no more than 501 Hours of Service are credited on account of any single continuous period during which you perform no duties (whether or not such period occurs in a single plan year), unless no duties are performed due to service with the armed forces of the United States for which you retain reemployment rights by law. Further, payment will not be deemed to be made by the Company or an affiliated employer if the payment is (i) made or due under a plan maintained solely for the purpose of complying with applicable workmen's compensation, unemployment compensation or disability insurance laws or (ii) solely in the nature of reimbursement to you for medical or medically-related expenses. Also, if you are sick or disabled and receiving sick or disability pay, your Hours of Service in this case may be subject to special rules under ERISA regulations. Hours of service also include each hour for which he would have been scheduled to work for the Company or a related employer during the period that you are absent from work because of service with the armed forces of the United States, provided you are eligible for reemployment rights under USERRA and returns to work with the Company or a related employer within the period during which you retain such reemployment rights. Finally, hours of service include each hour for which back pay, irrespective of mitigation of damages, has been either awarded or agreed to by the Company or an affiliated employer. If the Company does not maintain records that accurately reflect your actual hours of service, you will be credited with 45 hours of service for each week in which you perform an hour of service. Break in Service You will be considered to have incurred a break in service for each plan year during which you do not complete at least 501 hours of service. However, you will not incur a break in service solely by reason of a temporary absence from work not exceeding 12 months resulting from illness, layoff or other cause if authorized in advance by the Company pursuant to its uniform leave policy, if your employment is not otherwise be terminated during the period of such absence. Also, you will not incur a break in service as a result of certain maternity or paternity absences or a FMLA leave under the Family and Medical Leave Act of 1993, provided you return to employment from the FMLA leave. Please contact your Human Resources Department for more details. -14-

15 Disabled You are disabled if you can no longer continue in the service of your employer because of a mental or physical condition that is likely to result in death or is expected to continue for a period of at least twelve months. You will be considered disabled only if you (i) are eligible to receive a disability benefit under the terms of the Social Security Act or (ii) the Plan Administrator determines you are disabled based on a written certificate of a physician acceptable to it. Plan Highlight Distribution of your account When you leave the Company, you can receive your vested account balance or transfer it directly to an IRA or other eligible retirement plan. You also may elect to defer distribution of your vested account balance, if it exceeds $5,000. LEAVING THE COMPANY Distributions and Taxation Following your retirement or other termination of employment, distribution of your vested account balance will be made as soon as administratively possible following your distribution election in the form of a single-sum payment. However, if your vested account balance (including any portion of your account attributable to any rollover contributions) totals $1,000 or less, distribution will automatically be made, in the form of a single-sum payment, as soon as administratively possible following your retirement or other termination. If your vested account balance (including your Rollover Contributions account) is more than $1,000 but not more than $5,000, and you do not make an election to receive a distribution within the period prescribed by the Plan Administrator, your distribution will be automatically rolled over to an IRA in your name with an IRA provider selected by the Plan Administrator. Your automatic rollover will be invested in a product designed to preserve principal and provide a reasonable rate of return and liquidity. The fees and expenses for the IRA will be paid directly from the IRA, but will not exceed those that would be charged for automatic non-rollover IRAs. If your vested account balance (including any portion of your account attributable to rollover contributions) totals more than $5,000, distribution of your vested account balance may not be made prior to your normal retirement date (your 65th birthday) without your written consent. The foregoing automatic rollover requirements do not apply to a surviving spouse or alternate payee under a qualified domestic relations order, nor to a plan loan offset amount included in your distribution. Please note, however, that distributions cannot be processed prior to the 30th day following the date of your retirement or other termination of employment. If you continue your employment after your normal retirement date (your 65th birthday), you may elect to receive a partial distribution of any portion of your account at any time. NOTE: If you separated from service prior to April 1, 2002, and you elected to receive distribution in monthly, quarterly or annual installments over a period as limited under the Plan, you will continue to receive distribution in installments. NOTE ALSO: Under federal law, distribution of your vested account must be made or begin with annual distributions from your account no later than April 1 following the year you attain age 70½ or, if later, following the year you terminate employment. However, if you are a 5% owner of the Company, your distribution must be made or begin with annual distributions from your account by April 1 following the year you attain age 70½, regardless of whether you have terminated employment at that time. Whenever you receive your distribution from the Plan, it will normally be subject to income taxes, except for any Roth contributions in your Plan account. To provide for the -15-

16 resulting taxes, your distribution may be subject to mandatory 20% federal income tax withholding and may also be subject to any applicable state income tax withholding. However, you may be able to defer income taxes on your distribution by electing to transfer your distribution directly to an IRA or to another eligible retirement plan. If you are younger than age 59½ when you receive your distribution, any amount you receive may be subject to a 10% federal excise tax (penalty tax) in addition to any applicable federal and state income taxes. However, the 10% excise tax will not apply (i) if you separate from service on or after age 55, (ii) on account of a "permanent and total disability," (iii) to distributions made to your beneficiary in the event of your death or (iv) if you transfer your distribution directly to an IRA or to another eligible retirement plan. You should contact a tax advisor to determine which option is best for you. You will be provided with more information concerning your distribution options when you apply for benefits under the Plan. Death Benefit If you die while employed by the Company, your beneficiary will be entitled to receive the full value of your account. If you die after terminating employment, but before distribution of your vested account has been made, the vested balance of your account will be paid to your beneficiary. You may choose anyone to be your beneficiary under the Plan. You make your designation by completing a Beneficiary Designation Form on Fidelity's NetBenefits website. However, under federal law, if you are married and wish to name someone other than your spouse as your beneficiary, you may do so only with your spouse's written and notarized consent. If you fail to designate a beneficiary, or if your designated beneficiary dies before you do, the Plan provides that your beneficiary will automatically be your surviving spouse or, if none, your surviving children (including adopted children), in equal shares, or if none, your estate. If you have questions, you should contact Fidelity or your Human Resources Department. If a beneficiary dies after becoming entitled to receive a distribution under the Plan but before distribution is made to the beneficiary in full, and if you have not designated another beneficiary to receive the balance of the distribution in that event, the estate of the deceased Beneficiary will be the beneficiary as to the balance of the distribution. Your Spouse For purposes of the Plan, your spouse means the person to whom you are legally married under the laws of the state or country in which the marriage originated, which would include a same sex spouse. Military Service If you leave employment for certain periods of military service and are reemployed, you will be eligible to receive service credit, make contributions and receive Company matching contributions for those periods of qualified military service in accordance with the rules under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). You should contact your Human Resources Department if you have any questions regarding this provision. Effect on Other Benefits -16-