Item 2.05 Costs Associated with Exit or Disposal Activities.
On December 9, 2008, NetApp Inc. (the "Company") decided to cease development and availability of its SnapMirrorŪ for Open Systems (SMOS) product line. The Company originally acquired the product through its acquisition of Topio, Inc. in December 2006. The Company's facility in Haifa, Israel, currently employs 51 people and will be closed as of January 15, 2009. The Company has not made final employment decisions regarding its employees in Haifa. In connection with the decision to terminate further development and availability of the product line, the Company expects to incur charges of approximately $12 million to $14 million attributable primarily to the impairment of certain intangible assets from its acquisition of Topio, and approximately $5 million to $7 million related to the closure of the Haifa facility (of which up to $5 million may result in future cash expenditures, including lease termination payments and potential one-time severance and termination payments pending the outcome of employment decisions). Substantially all of these charges will be expensed in the third and fourth quarters of the Company's fiscal year ending April 24, 2009.
The Company's decision to terminate SMOS product availability and development was based on customer priorities and actual purchase histories. The market for replication products for disaster recovery purposes is dominated by homogeneous, rather than multivendor, solutions. The Company's "any-to-any" solution with SMOS was never adopted by customers in the way the Company anticipated. Item 2.06. Material Impairments
The information called for by this item is contained in Item 2.05, which is incorporated herein by reference.

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