SETTLEMENT AGREEMENT

Exhibit 10.68

SETTLEMENT AGREEMENT

I. PARTIES

     This Settlement Agreement (“Agreement”) is entered into among the United States of America, acting through the United States Department of Justice and on behalf of the General Services Administration (hereafter “GSA”) (collectively the “United States”), NetApp, Inc. (formerly known as “Network Appliance, Inc.”) and NetApp U.S. Public Sector, Inc. (formerly known as “Network Appliance Federal Systems, Inc.”) (hereafter collectively “NetApp”), and Igor Kapuscinski (hereafter referred to as “the Parties”), through their authorized representatives.

II. PREAMBLE

          As a preamble to this Agreement, the Parties agree to the following:

          A. NetApp is a company headquartered in Sunnyvale, California that manufactures, sells and distributes enterprise network storage and data management solutions, including hardware, software and storage management services for open network environments.

          B. Kapuscinski (“Relator”) is an individual resident of Maryland. On April 13, 2006, Relator filed a qui tam action in the United States District Court for the District of Columbia captioned United States ex rel. Kapuscinski v. Network Appliance, Inc. and Network Appliance Federal Systems, Inc. , Civ. No. 06-00675 (RMU) (hereafter “the Civil Action”). Relator was formerly employed at NetApp in the positions of Systems Engineer, Manager of Administration and Procurement, and Federal Operations Manager/Director. The United States will intervene in the Civil Action promptly upon the execution of this Settlement Agreement.

          C. The United States contends that it has certain civil claims, as specified in Paragraph 2, below; against NetApp for engaging in the following conduct during the period

from August 1, 1997 to February 12, 2005: In connection with Contracts GS-35F-0176D and GS-35F-5183H (“the Contracts”), NetApp: 1) made false disclosures and false statements to GSA as to the discounts it was providing to its other customers and as to its compliance with the Contracts’ price reduction clause; 2) violated the price reduction terms of the Contracts by failing to extend proper discounts to government customers purchasing under the Contracts; and 3) as a consequence, presented and/or caused others to present claims to the United States under the Contracts that were inflated because they were not discounted as highly as they should have been. For purposes of this Agreement, the conduct described above is known as “the Covered Conduct.”

          D. Net App denies the contentions of the United States set forth in Paragraph C and the claims and allegations made by the Relator in the Civil Action. This Agreement represents a compromise to avoid continued litigation and associated risks and is neither an admission of liability by NetApp nor a concession by the United States or Relator that their claims are not well founded.

          E. To avoid the delay, uncertainty, inconvenience, and expense of protracted litigation of the above claims, the Parties reach a full and final settlement pursuant to the Terms and Conditions below.

III. TERMS AND CONDITIONS

          1. NetApp agrees to pay to the United States $128,000,000, plus interest accruing at the rate of 3 percent per annum from February 18, 2009 until the date of payment (“the Settlement Amount”). NetApp further agrees to pay Relator $75,000 for expenses and attorney’s fees and costs. The foregoing payments shall be made as follows:

               a. NetApp agrees to pay the full Settlement Amount to the United States by electronic funds transfer pursuant to written instructions to be provided by the United States Attorney’s Office for the District of Columbia. NetApp agrees to make this electronic funds transfer no later than April 27, 2009.

               b. Contingent upon the United States receiving the Settlement Amount from NetApp and as soon as feasible after receipt, the United States agrees to pay $19,200,000, plus 15% of the interest paid by NetApp, to Relator by electronic funds transfer pursuant to written instructions to be provided by H. Vincent McKnight.

               c. NetApp agrees to pay $75,000 by electronic funds transfer pursuant to written instructions to be provided by Vincent McKnight. NetApp agrees to make this electronic funds transfer no later than April 27, 2009.

          2. Subject to the exceptions in Paragraph 4 (concerning excluded claims), below, in consideration of the obligations of NetApp in this Agreement, conditioned upon NetApp’s full payment of the Settlement Amount, the United States (on behalf of itself, its officers, agents, agencies, and departments) agrees to release NetApp together with its current and former parent corporations; direct and indirect subsidiaries; brother or sister corporations; divisions; shareholders; officers, directors, employees and affiliates; and the successors and assigns of any of them from, any civil or administrative monetary claim the United States has or may have for the Covered Conduct under the False Claims Act, 31 U.S.C. §§ 3729-3733; the Program Fraud Civil Remedies Act, 31 U.S.C. §§ 3801-3812; the Contract Disputes Act, 41 U.S.C. § 601 et seq. or the common law theories of breach of contract, payment by mistake, unjust enrichment, and fraud.

          3. Subject to the exceptions in Paragraph 4 (concerning excluded claims), below, in consideration of the obligations of NetApp in this Agreement, conditioned upon NetApp’s full payment of the Settlement Amount, Relator, for himself and for his heirs, successors, attorneys, agents, and assigns, agrees to release NetApp from any civil monetary claim the United States has or may have for the Covered Conduct under the False Claims Act, 31 U.S.C. §§ 3729-3733.

          4. Notwithstanding any term of this Agreement, specifically reserved and excluded from the scope and terms of this Agreement as to any entity or person (including NetApp and Relator) are the following claims of the United States:

               a. Any civil, criminal, or administrative liability arising under Title 26, U.S. Code (Internal Revenue Code);

               b. Any criminal liability;

               c. Except as explicitly stated in this Agreement, any administrative liability including the suspension and debarment rights of any federal agency;

               d. Any liability to the United States (or its agencies) for any conduct other than the Covered Conduct;

               e. Any liability based upon such obligations as are created by this Agreement;

               f. Any liability for express or implied warranty claims or other claims for defective or deficient products or services, including quality of goods and services;

               g. Any liability for failure to deliver goods or services due.

          5. Relator and his heirs, successors, attorneys, agents, and assigns agree not to object to this Agreement and agree and confirm that this Agreement is fair, adequate, and reasonable under all the circumstances, pursuant to 31 U.S.C. § 3730(c)(2)(B) and, conditioned upon receipt of Relator’s share, Relator, for himself individually, and for his heirs, successors, agents, and assigns, fully and finally releases, waives, and forever discharges the United States, its officers, agents, and employees, from any claims arising from or. relating to 31 U.S.C. § 3730; from any claims arising from the filing of the Civil Action; and from any other claims for a share of the Settlement Amount; and in full settlement of any claims Relator may have under this Agreement