Network Appliance Receives State Grant to Expand in RTP

Research Triangle Park, North Carolina - July 27, 2004 -- Network Appliance, Inc. (NASDAQ: NTAP), the leader in advanced networked storage solutions for today's data-intensive enterprise, today announced that it has received a Job Development Investment Grant (JDIG) from the state of North Carolina. At a press conference at the state capital in Raleigh, North Carolina, today, Governor Mike Easley and Network Appliance president Tom Mendoza announced the joint agreement before an audience of local and state officials, business leaders, members of the Economic Investment Committee, and the media.

"We are delighted that the Economic Investment Committee of North Carolina has chosen us for the JDIG grant," said Mendoza. "Our company has been in the RTP area since 1999, and this grant will enable us to continue to build and develop strong local ties with our business partners and customers and reap the benefits of a highly talented workforce in North Carolina."

"As a result of targeted, performance-based initiatives such as JDIG, North Carolina is leading the nation in job growth," said Easley. "Companies such as Network Appliance are choosing to locate and expand in North Carolina because our of business-friendly climate, low tax burden as well as our superior educational system and infrastructure."

Under the terms of the agreement, authorized unanimously this morning by the state Economic Investment Committee, chaired by Commerce Secretary Jim Fain, a 10-year grant will be established. Over the life of the grant, the North Carolina Department of Commerce estimates the project will:

  • Generate a cumulative gross state product value of about $2.5 billion.
  • Produce a positive cumulative net state revenue impact of $99 million.
  • Contribute nearly $3 million to the state's Industrial Development Fund for infrastructure improvements in rural North Carolina. This contribution is required of grant recipients that locate in a tier 5 urban county.

For each year Network Appliance meets the required performance targets, the state will provide a grant equal to 65% of the state personal income withholding taxes derived from the creation of new jobs. If Network Appliance creates the jobs called for under the agreement and sustains them for 10 years, the agreement could yield maximum benefits to the company of as much as $8.9 million over the life of the grant.

As part of the grant, Network Appliance will be investing $59 million over five years in people, land, buildings, and capital equipment.

As part of the company's expansion effort, Network Appliance will be purchasing three buildings from Cisco Systems, Inc. in RTP, located at 7301 Kit Creek Road. The space is 520,000 square feet and could eventually accommodate more than 2,000 employees.

About Network Appliance

Network Appliance is a world leader in unified storage solutions for today's data-intensive enterprise. Since its inception in 1992, Network Appliance has delivered technology, product, and partner firsts that continue to drive "The evolution of storage.™" Information about Network Appliance™ solutions and services is available at www.netapp.com.

"Safe Harbor" Statement under U.S. Private Securities Litigation Reform Act of 1995 Statements regarding performance targets, five-year investment targets, and building expansion purchases contain forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, and actual results could vary. Factors that could impact our ability to achieve our goals include: general economic and industry conditions, including expenditure trends for storage related products; our ability to deliver new product architectures and products which meet market acceptance; our ability to design products which compete effectively from a price and performance perspective and other important factors as described in Network Appliance, Inc.'s reports and documents filed from time to time with the Securities and Exchange Commission, including our most recently submitted Form 10-K and any subsequent Forms 10-Q or 8-K.


Contacts

Jodi Baumann
Network Appliance, Inc.
415.407.0013
jodi@netapp.com

Amy Wall
Voce Communications
650.322.2616
awall@vocecomm.com