þ
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Preliminary
Proxy Statement
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¨
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Definitive
Proxy Statement
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¨
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Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
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¨
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Definitive
Additional Materials
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¨
|
Soliciting
Material Pursuant to §240.14a-12
|
þ
|
Fee
not required.
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¨
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
|
Aggregate
number of securities to which transaction
applies:
|
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(3)
|
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was
determined):
|
|
(4)
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Proposed
maximum aggregate value of
transaction:
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(5)
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Total
fee paid:
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¨
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Fee
paid previously with preliminary
materials.
|
¨
|
Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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(1)
|
Amount
previously paid:
|
|
(2)
|
Form,
Schedule or Registration Statement
No.:
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(3)
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Filing
Party:
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(4)
|
Date
Filed:
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Very
truly yours,
|
|
James
P. DeBlasio
President
and Chief Executive Officer
|
1.
|
To
elect three Directors for a term expiring at the 2011 annual meeting and
one Director for a term expiring at the
2010 annual meeting;
|
|
2.
|
To
amend the Certificate of Incorporation;
|
|
3.
|
To
increase the number of shares available for issuance pursuant to the
Amended and Restated Internap Network Services Corporation 2005 Incentive
Stock Plan by four million shares;
|
|
4.
|
To
ratify the appointment of PricewaterhouseCoopers LLP as the independent
registered public accounting firm for
our fiscal year ending December 31, 2008; and
|
|
5.
|
To
transact such other business as may properly come before the annual
meeting or any adjournment or postponement
thereof.
|
By
order of the Board of Directors,
|
|
Richard
Dobb
Corporate
Secretary
|
|
Internap
Network Services Corporation
|
|
Attention:
Corporate Secretary
|
|
250
Williams Street, Suite E-100
|
|
Atlanta,
Georgia 30303
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1.
|
To
elect three Directors for a term expiring at the 2011 annual meeting and
one Director for a term expiring at
the 2010 annual meeting;
|
|
2.
|
To
amend the Certificate of Incorporation;
|
|
3.
|
To
increase the number of shares available for issuance pursuant to the
Amended and Restated Internap Network Services Corporation 2005 Incentive
Stock Plan by four million shares;
|
|
4.
|
To
ratify the appointment of PricewaterhouseCoopers LLP as the independent
registered public accounting firm
for our fiscal year ending December 31, 2008; and
|
|
5.
|
To
transact such other business as may properly come before the annual
meeting or any adjournment or postponement
thereof.
|
•
|
vote
your shares on routine matters; or
|
•
|
leave
your shares unvoted.
|
•
|
For shares
registered in your name —As a stockholder of record, you may go to
www.proxyvote.com to grant
a proxy to vote your shares via the Internet. You will be required to
provide your number and control number
contained on your proxy card. You will then be asked to complete an
electronic proxy card. The votes represented
by such proxy will be generated on the computer screen, and you will be
prompted to submit or revise
them as desired.
|
•
|
For shares
registered in the name of a broker or bank —If you hold your shares
through a broker, bank or other
nominee, that institution will send you separate instructions describing
the procedures for voting your shares.
|
•
|
General
information for all shares voted via the Internet —We must receive
votes submitted via the Internet by
11:59 p.m., Eastern Time, on June 18, 2008. Submitting your proxy via
the Internet will not affect your right to
vote in person should you decide to attend the annual
meeting.
|
1.
|
giving
written notice to the Corporate Secretary, Internap Network Services
Corporation, at 250 Williams Street,
Suite E-100, Atlanta, Georgia
30303;
|
2.
|
executing
and delivering to the Corporate Secretary a proxy card bearing a later
date; or
|
3.
|
voting
in person at the annual meeting.
|
•
|
directly
appointing our independent registered public
accountants;
|
•
|
discussing
with our independent registered public accountants their independence from
management;
|
•
|
reviewing
with our independent registered public accountants the scope and results
of their audit;
|
•
|
approving
all audit services and pre-approving all permissible non-audit services to
be performed by the
independent registered public
accountants;
|
•
|
overseeing
the financial reporting process and discussing with management and our
independent registered public
accountants the interim and annual financial statements that we file with
the SEC; and
|
•
|
reviewing
and monitoring our accounting principles, policies and financial and
accounting controls.
|
•
|
our
Directors and Director nominees;
|
|
•
|
our
principal executive officer, our principal accounting officer, our three
most highly compensated named executive
officers other than the principal executive officer and principal
accounting officer as of December 31,
2007, and one individual who would have been the principal financial
officer had he been an executive officer
as of December 31, 2007;
|
|
•
|
our
Directors, Director nominees and executive officers as a group;
and
|
|
•
|
each
stockholder who holds more than a 5% interest in our outstanding common
stock.
|
|
Common
Stock Beneficially Owned
|
||||
|
Number of Shares
|
|
Percent of Class
|
||
Tamara
Augustyn (1)
|
36,751
|
*
|
|||
David
A. Buckel (2)
|
|
--
|
|
--
|
|
Charles
B. Coe (3)
|
|
53,500
|
|
*
|
|
James
P. DeBlasio (4)
|
|
681,323
|
|
*
|
|
Richard
Dobb (5)
|
66,235
|
*
|
|||
Eugene
Eidenberg (6)
|
|
242,656
|
|
*
|
|
Franklin
Resources, Inc. (7)
|
|
3,696,290
|
|
7.4%
|
|
William
J. Harding (8)
|
|
24,783
|
|
*
|
|
Patricia
L. Higgins (9)
|
|
41,229
|
|
*
|
|
Integral
Capital Management VII, LLC, Integral Capital Management VIII, LLC
and
ICP Absolute Return Management, LLC (10)
|
2,999,000
|
6.0%
|
|||
Phil
Kaplan (11)
|
437,862
|
*
|
|||
Kornitzer
Capital Management, Inc. (12)
|
3,736,800
|
7.4%
|
|||
Vince
Molinaro (13)
|
194,771
|
*
|
|||
Kevin
L. Ober (14)
|
|
23,500
|
|
*
|
|
Gary
Pfeiffer (15)
|
12,500
|
*
|
|||
Daniel
C. Stanzione (16)
|
|
45,500
|
|
*
|
|
All
Directors and executive officers as a group (13 persons)
|
|
1,860,610
|
|
3.7%
|
(1)
|
Consists
of 3,980 shares of restricted common stock awarded on March 20, 2008 that
vest in 16 quarterly installments, 7,500 shares
of restricted common stock awarded on March 15, 2007 that vest in 16
quarterly installments, 10,000 shares of restricted common
stock awarded on February 27, 2006 of which 12.5% vest every six months,
and options to purchase 15,271 shares of common
stock that are vested and exercisable or that will vest within 60
days.
|
(2)
|
Mr.
Buckel resigned his position as Vice President and Chief Financial Officer
on November 19, 2007.
|
Consists
of 15,000 shares of common stock, 2,500 shares of restricted common stock
awarded on June 22, 2007 one-third
of which vest on each of the first, second and third anniversary of the
grant date, provided Mr. Coe is a Director of
the Company on such date, and options to purchase 36,000 shares of
common stock that are vested
and exercisable.
|
|
(4)
|
Consists
of: (i) 5,000 shares purchased in the open market; (ii) 100,000 shares of
restricted stock of which 50,000 vested on September
30, 2006 and 17,325 shares were withheld to cover taxes, 16,667 vested on
September 30, 2007 with 16,667 shares to
vest on September 30, 2008 and 16,666 shares to vest on September 30,
2009, provided that Mr. DeBlasio is employed by the Company on such
vesting dates. Thus far, Mr. DeBlasio has sold 27,000 shares in
accordance with his 10b-5 plan; (iii) 125,000 shares
of restricted stock that vest in a series of 16 quarterly installments at
the end of each calendar quarter beginning with the second
quarter of 2007 provided that Mr. DeBlasio is employed by the Company
at the end of such quarter; (iv) 149,776 shares of restricted common stock
awarded on March 20, 2008, half of which are
time-based and half are performance-based vesting. The
time-based portion vests in 16 equal quarterly installments. The
performance-based portion vests in increments of one-third beginning on
the first anniversary of the grant date if the Company achieves revenue
and EBITDA levels established by the Board.
The Company will either meet or not meet both goals in a given year. With
respect to all shares of performance-based restricted stock
that do not vest during any of the three years, 50% of such shares will
vest on the fourth anniversary of the date of
the grant. The vesting of any restricted stock (including both time-based
and performance-based) is subject to Mr. DeBlasio being
an employee in good standing on the date of vesting; (v) 4,372 shares
awarded on March 15, 2008; and (vi) and options to purchase 341,500 shares
of common stock that are vested and exercisable or that will vest within
60 days.
|
(5)
|
Consists
of 30,000 shares of restricted common stock awarded on April 23, 2007 and
25% of the award vests on the anniversary of
grant, provided that Mr. Dobb is employed by the Company on that date,
1,628 shares awarded on March 15, 2008 that are fully
vested, and 34,607 shares of restricted common stock awarded on March 20,
2008, half of which are time-based and half are performance-based vesting.
The time-based portion vests in 16 equal quarterly installments. The
performance-based portion vests in increments of one-third beginning on
the first anniversary of the grant date if the Company achieves revenue
and EBITDA
levels established by the Board. The Company will either meet or not meet
both goals in a given year. With respect to
all shares of performance-based restricted stock that do not
vest during any of the three years, 50% of such shares will vest
on
the fourth anniversary of the date of the grant. The vesting of any
restricted stock (including both time-based and performance-based)
is subject to Mr. Dobb being an employee in good standing on the date of
vesting.
|
(6)
|
Consists
of the 2,500 shares of restricted common stock awarded on June 22, 2007
one-third of which vest on each of the first, second and third anniversary
of the grant date, provided Dr. Eidenberg is a Director of the Company on
such date, 236 shares of common stock held by Mr. Eidenberg,
45,556 shares of common stock held by Mr. Eidenberg, as trustee of the
Eugene Eidenberg Trust dated 9/97, 2,799 shares
of common stock held by Eugene Eidenberg, as trustee of the Anna M. Chavez
Educational Trust, 40,000 shares of common
stock held by the Eugene Eidenberg Grantor Retained Annuity Trust, 8,566
shares held by Anna M. Chavez, and options
to purchase 142,999 shares of common stock that are vested and
exercisable.
|
(7)
|
As
of December 31, 2007. The address of Franklin Resources, Inc. is One
Franklin Parkway, San Mateo, California 94403.
|
(8)
|
Dr.
Harding retired from Morgan Stanley Venture Partners III, LLC and Morgan
Stanley & Co., Inc. in 2007. He assigned all of
his
equity compensation received while serving on our Board of Directors to
Morgan Stanley, which consists of 2,500 shares of restricted
common stock and options to purchase 27,000 shares of common stock that
are vested and exercisable. Dr. Harding disclaims
beneficial ownership in all such shares. Because Dr. Harding has retired
from Morgan Stanley, such shares are
excluded from the table above.
|
(9)
|
Consists
of 4,729 shares of common stock, 2,500 shares of restricted common stock
awarded on June 22, 2007 one-third
of which vest on each of the first, second and third anniversary of the
grant date, provided Ms. Higgins is a Director of
the Company on such date, and options to purchase 34,000 shares of common
stock that are vested and exercisable.
|
(10)
|
As
of January 4, 2008. The address is 3000 Sand Hill Road,
Building 3, Suite 240, Menlo Park, California
94025.
|
(11)
|
Consists
of 329,321 shares owned by Mr. Kaplan’s family trust, options to purchase
74,493 shares of common stock that are vested
and exercisable or that will vest within 60 days and 34,048 shares of
restricted common stock awarded on March 20, 2008,
half of which are time-based and half are performance-based vesting. The
time-based portion vests in 16 equal quarterly installments. The
performance-based portion vests in increments of one-third beginning on
the first anniversary of the grant date
if the Company achieves revenue and EBITDA levels established by the
Board. The Company will either meet or not meet both
goals in a given year. With respect to all shares of performance-based
restricted stock that do not vest during any of the
three
years, 50% of such shares will vest on the fourth anniversary of the date
of the grant. The vesting of any restricted stock
(including both time-based and performance-based) is subject to Mr. Kaplan
being an employee in good standing on the date
of vesting.
|
(12)
|
As
of December 31, 2007. The address is 5420 West 61st Place, Shawnee
Mission, Kansas 66205.
|
(13)
|
Consists
of 125,000 shares of restricted common stock awarded on April 24, 2007 of
which 25% of the award vests on the anniversary
of grant, provided that Mr. Molinaro is employed by the Company on that
date and 69,771 shares of restricted common
stock awarded on March 20, 2008, half of which are time-based and half are
performance-based vesting. The time-based portion vests in 16 equal
quarterly installments. The performance-based portion vests in increments
of one-third beginning on
the first anniversary of the grant date if the Company achieves revenue
and EBITDA levels established by the Board. The Company
will either meet or not meet both goals in a given year. With respect to
all shares of performance-based restricted stock
that do not vest during any of the three years, 50% of such shares will
vest on the fourth anniversary of the date of the grant. The
vesting of any restricted stock (including both time-based and
performance-based) is subject to Mr. Molinaro being an employee
in good standing on the date of vesting. Mr. Molinaro resigned
his position as Chief Operating Officer on April 7, 2008 and plans to
remain an employee through June 30, 2008.
|
(14)
|
Consists
of 2,500 shares of restricted common stock awarded on June 22, 2007
one-third of which vest on each of the first, second
and third anniversary of the grant date, provided Mr. Ober is a Director
of the Company on such date, and options to purchase
21,000 shares of common stock that are vested and
exercisable.
|
(15)
|
Consists
of 12,500 shares of restricted common stock awarded on August 21, 2007
one-third of which vest on each of the first, second
and third anniversary of the grant date, provided Mr. Pfeiffer is a
Director of the Company on such date.
|
(16)
|
Consists
of 9,000 shares purchased in the open market, 2,500 shares of restricted
common stock awarded on June 22, 2007 one-third
of which vest on each of the first, second and third anniversary of the
grant date, provided Dr. Stanzione is a Director
of the Company on such date, and options to purchase 34,000 shares of
common stock that are vested and
exercisable.
|
Name
|
|
Age
|
|
Position
|
James
P. DeBlasio
|
|
52
|
|
President
and Chief Executive Officer
|
Tamara
Augustyn
|
|
38
|
|
Vice
President and Principal Accounting Officer
|
David
A. Buckel
|
|
45
|
|
Vice
President and Chief Financial Officer (1)
|
Richard
Dobb
|
|
53
|
|
Vice
President and General Counsel
|
Phil
Kaplan
|
|
41
|
|
Chief
Strategy Officer
|
Vince
Molinaro
|
|
44
|
|
Chief
Operating Officer (2)
|
(1)
|
Mr.
Buckel resigned his position as Vice President and Chief Financial Officer
on November 19, 2007.
|
(2)
|
Mr.
Molinaro resigned his position as Chief Operating Officer on April 7,
2008.
|
•
|
Base
salary;
|
•
|
Annual
cash incentives; and
|
•
|
Long-term
equity incentives, which consist of stock options and restricted
stock.
|
1.
|
Base
Salary
|
Name
|
|
Base Salary
|
||
James
DeBlasio
|
|
$
|
425,000
|
|
Vincent
Molinaro
|
$
|
350,000
|
||
David
Buckel
|
|
$
|
260,000
|
(1)
|
Richard
Dobb
|
|
$
|
240,000
|
|
Phil
Kaplan
|
|
$
|
235,000
|
|
Tamara
Augustyn
|
|
$
|
175,000
|
(1)
|
Mr. Buckel
resigned his position as Chief Financial Officer in November
2007.
|
2.
|
Annual
Cash Incentives
|
•
|
Focus
participants’ actions on the achievement of annual revenue growth and
profitability goals;
|
•
|
Align
participants’ actions on the accomplishment of key operational and
strategic goals;
|
•
|
Encourage
and reward participants for the achievement of specific objectives;
and
|
•
|
Maintain
a competitive range of incentive compensation
opportunities.
|
1.
|
Achievement
of revenue goals by us, which comprises 25% of the potential
award;
|
2.
|
Achievement
of adjusted EBITDA goals by us, which comprises 50% of the potential
award; and
|
3.
|
Achievement
of individual goals by the named executive officer, which comprises 25% of
the potential award.
|
Name
|
|
Target
|
Maximum
|
|||
James
DeBlasio
|
|
70
|
%
|
140
|
%
|
|
David
Buckel (1)
|
|
50
|
%
|
100
|
%
|
|
Vincent
Molinaro
|
|
50
|
%
|
100
|
%
|
|
Richard
Dobb
|
|
45
|
%
|
90
|
%
|
|
Phil
Kaplan
|
|
37
|
%
|
74
|
%
|
|
Tamara
Augustyn (2)
|
|
--
|
%
|
--
|
%
|
(1)
|
Mr. Buckel
resigned his position as Chief Financial Officer in November
2007.
|
(2)
|
Ms. Augustyn
assumed the role of Principal Accounting Officer following Mr.
Buckel’s resignation in November 2007 and was not a participant in the
Plan when the Board established these
percentages.
|
|
Weight
|
Threshold
|
Target
|
Above
|
Maximum
|
||||||||||||||
Annual
Revenue Bonus Payout
|
|
25
|
%
|
95
|
%
|
100
|
%
|
105
|
%
|
110
|
%
|
||||||||
|
$
|
10,800
|
$
|
27,000
|
$
|
35,100
|
$
|
54,000
|
|||||||||||
Annual
Adjusted EBITDA Bonus Payout
|
|
50
|
%
|
90
|
%
|
100
|
%
|
110
|
%
|
120
|
%
|
||||||||
|
$
|
21,600
|
$
|
54,000
|
$
|
70,200
|
$
|
108,000
|
|||||||||||
Individual
Goals Bonus Payout
|
|
25
|
%
|
NI
|
ME
|
OE
|
EE
|
||||||||||||
|
$
|
0
|
$
|
27,000
|
$
|
35,100
|
$
|
54,000
|
Name:
|
Total
Bonus Amount
|
Cash
Portion
|
Stock
Portion
|
|||||||||
James
DeBlasio
|
$ | 337,663 | $ | 297,500 | $ |
40,163,
or 6,638 shares
|
||||||
David
Buckel (1)
|
-- | -- | -- | |||||||||
Vincent
Molinaro
|
$ | 75,000 | $ | 75,000 | $ | 0 | ||||||
Richard
Dobb
|
$ | 122,580 | $ | 108,000 | $ | 14,580, or 2,409 shares | ||||||
Phil
Kaplan
|
$ | 98,688 | $ | 87,000 | $ | 11,688, or 1,931 shares | ||||||
Tamara
Augustyn (2)
|
$ | 90,000 | $ | 90,000 | $ | 0 |
(1)
|
Mr. Buckel
resigned his position as Chief Financial Officer in November 2007 and
thus, was not eligible for an award pursuant to the
Plan.
|
(2)
|
Ms.
Augustyn assumed the role of Principal Accounting Officer following
Mr. Buckel’s resignation in November
2007.
|
Name
|
|
Target
|
Maximum
|
|||
James
DeBlasio
|
|
70
|
%
|
140
|
%
|
|
David
Buckel (1)
|
|
--
|
%
|
--
|
%
|
|
Vice
President and Chief Financial Officer
|
50
|
%
|
100
|
%
|
||
Vincent
Molinaro (2)
|
|
50
|
%
|
100
|
%
|
|
Richard
Dobb
|
|
45
|
%
|
90
|
%
|
|
Phil
Kaplan
|
|
45
|
%
|
90
|
%
|
|
Tamara
Augustyn (3)
|
|
--
|
%
|
--
|
%
|
(1)
|
Mr. Buckel
resigned his position as Vice President and Chief Financial Officer on
November 18, 2007.
|
(2)
|
Mr.
Molinaro resigned his position as Chief Operating Officer on April 7,
2008.
|
(3)
|
Ms.
Augustyn will not be a participant in the Plan for
2008.
|
3.
|
Long-Term
Equity Incentives
|
Name
|
|
Multiple
|
James
DeBlasio
|
|
6.0
|
David
Buckel (1)
|
|
--
|
Vince
Molinaro
|
|
5
|
Richard
Dobb
|
|
4
|
Phil
Kaplan
|
|
4
|
Tamara
Augustyn
|
|
1.5
|
(1)
|
Mr. Buckel
resigned his position as Vice President and Chief Financial Officer on
November 18, 2007 prior to the Board’s determination of awards and
thus, was not eligible for an award pursuant to the Stock
Plan.
|
Name
|
|
Total
Number of Shares
|
Time-Based
|
Performance-Based
|
James
DeBlasio
|
|
149,776
|
74,888
|
74,888
|
David
Buckel (1)
|
|
--
|
--
|
--
|
Vincent
Molinaro
|
|
69,771
|
34,886
|
34,886
|
Richard
Dobb
|
|
34,607
|
17,303
|
17,303
|
Phil
Kaplan
|
|
34,048
|
17,024
|
17,024
|
Tamara
Augustyn
|
|
3,980
|
3,980
|
--
|
(1)
|
Mr. Buckel
resigned his position as Vice President and Chief Financial Officer on
November 18, 2007 prior to the Board’s determination of awards and
thus, was not eligible for an award pursuant to the Stock
Plan.
|
Position
|
Retention
Ratio
|
Time
to Retain
|
||
Chief
Executive Officer
|
50.0%
|
5
Years from date of
acquisition
|
||
Chief
Operating Officer
|
33.3%
|
4
Years from date of
acquisition
|
||
Chief
Financial Officer
|
33.3%
|
4
Years from date of
acquisition
|
||
Chief
Technology Officer
|
25.0%
|
3
Years from date of
acquisition
|
||
Chief
Strategy Officer
|
25.0%
|
3
Years from date of
acquisition
|
||
Vice
President, Human Resources
|
25.0%
|
3
Years from date of
acquisition
|
||
Vice
President and General Counsel
|
25.0%
|
3
Years from date of
acquisition
|
||
Vice
President, Sales
|
25.0%
|
3
Years from date of
acquisition
|
•
|
Health
and dental insurance;
|
•
|
Basic
life insurance;
|
•
|
Long-term
disability insurance; and
|
•
|
Participation
in our 401(k) plan, including matching
contributions.
|
Name
and Principal
Position
|
Year
|
Salary
$(1)
|
Bonus
$
|
Stock
Awards
$(2)
|
Option
Awards
$ (2)
|
Non-Equity
Incentive Plan
Compensation(3)
$
|
Change
in
Pension
Value
&
Non-Qualified
Deferred
Compensation
Earnings
$
|
All
Other
Compensation
$
|
Total
$
|
|||||||||||||||||
James
DeBlasio
Chief
Executive Officer
|
2007
|
425,000
|
—
|
524,831
|
435,452
|
337,663
|
—
|
27,462
|
1,750,408
|
|||||||||||||||||
2006
|
350,000
|
—
|
119,918
|
435,452
|
—
|
—
|
47,599
|
952,969
|
||||||||||||||||||
David
Buckel (4)
Chief
Financial Officer
|
2007
|
240,333
|
—
|
222,204
|
287,711
|
—
|
—
|
—
|
750,248
|
|||||||||||||||||
2006
|
235,385
|
—
|
70,097
|
390,611
|
100,000
|
—
|
—
|
796,093
|
||||||||||||||||||
Vincent
Molinaro
Chief
Operating Officer
|
2007
|
247,917
|
13,333
|
325,086
|
—
|
75,000
|
—
|
—
|
661,336
|
|||||||||||||||||
2006
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Richard
Dobb
Vice
President and
General
Counsel
|
2007
|
180,000
|
—
|
78,783
|
—
|
122,580
|
—
|
—
|
381,363
|
|||||||||||||||||
2006
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Philip
Kaplan
Chief
Strategy Officer
|
2007
|
230,808
|
—
|
—
|
396,641
|
98,688
|
—
|
—
|
726,137
|
|||||||||||||||||
2006
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Tamara
Augustyn
Vice
President and Principal
Accounting
Officer
|
2007
|
172,500
|
—
|
42,987
|
41,941
|
90,000
|
—
|
—
|
347,428
|
|||||||||||||||||
2006
|
152,274
|
—
|
14,902
|
41,227
|
50,000
|
—
|
—
|
202,274
|
(1)
|
The
salary of each of Mr. Buckel, Mr. Molinaro, Mr. Dobb, and Mr.
Kaplan is prorated for the portion of the year he was employed by the
Company.
|
|||||||||||||||||||||||||||
(2)
|
Represents
the proportionate amount of the total fair value of stock and option
awards recognized by the Company as an expense in 2007 and 2006 for
inancial
accounting purposes, excluding forfeitures related to service-based
vesting conditions. The fair values of these awards and the amounts
expensed were
determined in accordance with FAS 123R. The awards for which expense is
shown in this table include the awards described in the Grants of
Plan-Based Awards
table of this Proxy Statement, as well as awards granted in prior years
for which the Company continued to recognize expense in 2007 and 2006.
The
assumptions used in determining the grant date fair values of these awards
are set forth in the notes to the Company’s consolidated financial
statements, which
are included in our Annual Report on Form 10-K for the year ended
December 31, 2007.
|
|||||||||||||||||||||||||||
(3)
|
As
provided in the Plan, the Committee determined and approved bonus payments
in 2008 in excess of the targets established in the Plan
for each named executive officer, other than the Chief Executive Officer,
and the Board determined the bonus payment for the Chief
Executive Officer, and paid such excess in shares of common stock on
March 15, 2008. Mr. DeBlasio’s bonus consisted of $297,500 paid in
cash
and $40,163 paid in shares of common stock. Mr. Dobb’s bonus
consisted of $108,000 paid in cash and $14,180 paid in shares of common
stock. Mr. Kaplan’s
bonus consisted of $87,000 paid in cash and $11,688 paid in shares of
common stock. The amounts reported in this column include the value of
such shares. The
value of these shares is not, however, reflected in column
(e).
|
|||||||||||||||||||||||||||
(4)
|
Mr.
Buckel resigned as Chief Financial Officer in November of 2007. As a
result, he forfeited 9,375 options that were a part of a grant made on May
12, 2004, 1,597 options
that were part of a grant made on September 28, 2006, 1,298 options that
were part of a second grant made on September 28, 2006, 5,090 options that
were part of
a third grant made on September 28, 2006, as well as 30,934 shares of
restricted common stock that were part of an award made on January 18,
2006 and 65,625 shares of
restricted common stock that were part of an award made on March 15,
2007. The aggregate amount of this forfeiture is $249,525.60
based on the assumptions delineated
in footnote (2) above.
|
Name
and Principal Position
|
|
Perquisites
and
Other
Personal
Benefits
$
|
Tax
Reimburse-
ments
$
|
|
Dividend
Equivalents
$
|
|
Payments/
Accruals
on
Termination
Plans
$
|
|
Registrant
Contributions
to
Defined
Contribution
Plans
$
|
|
Insurance
Premiums
$
|
|
Other
$
|
|||||||||||||||||||||||||
James
DeBlasio
Chief
Executive Officer
|
|
27,462
|
(1)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
||||||||||||||||||||||||
David
Buckel
Chief
Financial Officer
|
|
—
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|||||||||||||||||||||||||
Vincent
Molinaro
Chief
Operating Officer
|
|
—
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|||||||||||||||||||||||||
Richard
Dobb
Vice
President and General Counsel
|
|
—
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|||||||||||||||||||||||||
Philip
Kaplan
Chief
Strategy Officer
|
|
—
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|||||||||||||||||||||||||
Tamara
Augustyn
Vice
President and Principal
Accounting
Officer
|
|
—
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
(1)
|
The
amounts shown for fiscal 2007 include personal use of corporate housing of
$18,900 and car service of $8,562.
|
Grant
Date
|
Estimated
Future Payouts
Under
Non-Equity Incentive
Plan
Awards
|
Estimated
Future Payouts
Under
Equity Incentive Plan
Awards
|
All
Other
Stock
Awards:
Number
of
Shares
of
Stock
or
Units
#
|
All
Other
Stock
Awards:
Number
of
Securities
Underlying
Options
#
|
Exercise
or
Base
Price
of
Option
Awards
$/Sh
|
Grant
Date
Fair
Value
of
Stock
and
Option
Awards
|
||||||||||||||||||||||
Name
and Principal
Position
|
Threshold
$
|
Target
$
|
Maximum
$
|
Threshold
#
|
Target
#
|
Maximum
#
|
||||||||||||||||||||||
James
DeBlasio
Chief
Executive Officer
|
3/15/2007
|
|
—
|
—
|
|
—
|
—
|
—
|
—
|
125,000
|
—
|
|
—
|
$
|
2,082,500
|
|||||||||||||
3/15/2008
|
(1)
|
—
|
—
|
—
|
6,638
|
40,160
|
||||||||||||||||||||||
David
Buckel
Chief
Financial Officer
|
3/15/2007
|
—
|
—
|
—
|
—
|
—
|
—
|
75,000
|
—
|
—
|
1,249,500
|
|||||||||||||||||
Vincent
Molinaro
Chief
Operating Officer
|
4/24/2007
|
—
|
—
|
—
|
—
|
—
|
—
|
125,000
|
—
|
—
|
2,005,000
|
|||||||||||||||||
Richard Dobb | 4/23/2007 | — | — |
—
|
— | — | — | 30,000 |
—
|
— | 474,600 | |||||||||||||||||
Vice
President and
General
Counsel
|
3/15/2008
|
(1)
|
—
|
—
|
—
|
—
—
|
—
—
|
—
—
|
2,409
|
—
|
—
|
14,574
|
||||||||||||||||
Philip
Kaplan
|
6/22/2007
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
30,000
|
13.64
|
409,200
|
|||||||||||||||||
Chief
Strategy Officer
|
3/15/2008
|
(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
1,931
|
—
|
—
|
11,683
|
Tamara
Augustyn
Vice
President and Principal Accounting Officer
|
03/15/07
12/19/2007
|
—
|
—
—
|
—
—
|
—
—
|
—
—
|
—
—
|
7,500
—
|
—
10,000
|
—
9.15
|
124,950
91,500
|
Option
Awards
|
Stock
Awards
|
|||||||||||||||||||||||
Name
and Principal
Position
|
Number
of
Securities
Underlying
Unexercised
Options
#
Exercisable
|
Number
of
Securities
Underlying
Unexercised
Options
#
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
#
|
Option
Exercise
Price
$
|
Option
Expiration
Date
|
Number
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
#
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have
Not
Vested (1)
$
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or
Other
Rights
That
Have
Not
Vested
#
|
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value
of
Unearned
Shares,
Units
or
Other
Rights
That
Have
Not
Vested
$
|
|||||||||||||||
James
DeBlasio
Chief
Executive Officer
|
8,000
17,000
2,000
2,000
312,5000
|
(2)
|
—
—
—
—
—
|
—
—
—
—
—
|
|
13.50
13.50
14.90
4.60
4.80
|
9/16/2013
9/16/2013
5/27/2014
6/23/2015
9/30/2015
|
33,330
101,562
—
—
—
|
(3)
(4)
|
|
277,639
846,011
—
—
—
|
—
—
—
—
—
|
—
—
—
—
—
|
|||||||||||
David
Buckel
Chief
Financial Officer
|
15,000
65,625
903
734
2,877
|
(5)
|
—
—
—
—
—
|
—
—
—
—
—
|
11.10
14.30
14.46
14.46
14.46
|
10/31/2013
5/12/2014
9/28/2016
9/28/2016
9/28/2016
|
—
—
—
—
—
|
—
—
—
—
—
|
—
—
—
—
—
|
—
—
—
—
—
|
||||||||||||||
Vincent
Molinaro
Chief
Operating Officer
|
—
|
—
|
—
|
—
|
—
|
125,000
|
(6)
|
1,041,250
|
—
|
—
|
||||||||||||||
Richard
Dobb
Vice
President and
General
Counsel
|
—
|
—
|
—
|
—
|
—
|
30,000
|
(7)
|
249,900
|
—
|
—
|
||||||||||||||
Philip
Kaplan
Chief
Strategy Officer
|
25,569
13,471
24,056
|
(8)
|
—
13,471
52,924
|
—
—
—
|
4.06
10.53
17.31
|
12/2/2014
12/16/2015
07/13/2016
|
—
—
—
|
—
—
—
|
—
—
—
|
—
—
—
|
||||||||||||||
30,000 |
(9)
|
—
|
13.64
|
6/22/2017
|
—
|
—
|
—
|
—
|
||||||||||||||||
Tamara
Augustyn
Vice
President and Principal
|
13,125
479
|
1,875
521
|
(10)
|
—
—
|
12.10
5.30
|
6/30/2014
1/18/2016
|
6,250
6,094
|
(11)
(12)
|
52,063
50,763
|
—
—
|
—
—
|
|||||||||||||
Accounting
Officer
|
—
|
10,000
|
—
|
9.15
|
12/19/2017
|
—
|
—
|
—
|
—
|
(1)
|
The
fair market value of a share of Internap stock on the last day of the 2007
fiscal year was $8.33.
|
(2)
|
Mr.
DeBlasio was granted 500,000 options on September 30, 2005. 25% vested
immediately, but were not exercisable until September 30, 2006 with the
remaining shares
vesting annually over a four-year period beginning September 30, 2005, and
the other options were granted for Mr. DeBlasio’s service as a
Director.
|
(3)
|
Mr. DeBlasio
was awarded restricted shares on September 30, 2005. 50% of those
shares vested on September 30, 2006, with the remaining shares
vesting annually over
a three-year period beginning September 30,
2006.
|
(4)
|
Mr.
DeBlasio was granted 125,000 shares of restricted stock on March 15, 2007
that vest in a series of 16 quarterly installments at
the end of each calendar quarter beginning with the second quarter of
2007.
|
(5)
|
Mr.
Buckel was granted options on October 31, 2003, May 12,
2004, January 18, 2006, and three separate grants on
September 29, 2006. The options vest over a four-year
period with the exception of options granted on September 28, 2006.
The options vest monthly over a three-year period.
|
(6)
|
Mr.
Molinaro was granted 125,000 shares of restricted common stock on April
24, 2007 of which 25% of the award vests on the
anniversary of grant.
|
(7)
|
Mr.
Dobb was granted 30,000 shares of restricted common stock on April 23,
2007 and 25% of the award vests on the anniversary
of grant.
|
(8)
|
Mr.
Kaplan was granted options on December 2, 2004, December 16, 2005 and July
13, 2006. One-fourth of the number of shares vested
on the anniversary of the grant date and then vest quarterly over the next
three years.
|
(9)
|
Mr.
Kaplan was granted 30,000 options on June 22, 2007. One-fourth
of the number of shares vest on each of the first, second, third,
and fourth anniversary of the grant date.
|
(10)
|
Ms.
Augustyn was granted options on June 30, 2004, January 18, 2006 and
December 19, 2007. One-fourth of the number
of shares
vest on the anniversary of the grant date and 1/48 of the
number of shares vest per month thereafter.
|
(11)
|
Ms.
Augustyn was granted 10,000 shares of restricted common stock on February
27, 2006. One-eighth of the number of shares vest
every six months after the grant date.
|
(12)
|
Ms.
Augustyn was granted 7,500 shares of restricted common stock on March 15,
2007 that vest in a series of 16 quarterly installments
at the end of each calendar quarter beginning with the second quarter of
2007.
|
|
Option
Awards
|
|
Stock
Awards
|
|||||||||||||||||||
Name
and Principal Position
|
|
Number of Shares
Acquired
on
Exercise
#
|
|
Value Realized
Upon
Exercise
$
|
|
Number of Shares
Acquired
on
Vesting
#
|
Value Realized
On
Vesting
$
|
|||||||||||||||
|
|
|
||||||||||||||||||||
James
DeBlasio
Chief
Executive Officer
|
|
—
|
|
—
|
|
40,108
|
535,124
|
|||||||||||||||
David
Buckel
Chief
Financial Officer
|
|
—
|
|
—
|
|
19,689
|
288,753
|
|||||||||||||||
Vincent
Molinaro
Chief
Operating Officer
|
|
—
|
|
—
|
|
—
|
—
|
|||||||||||||||
Richard
Dobb
Vice
President and General Counsel
|
|
—
|
|
—
|
|
—
|
—
|
|||||||||||||||
Philip
Kaplan
Chief
Strategy Officer
|
|
—
|
|
—
|
|
—
|
—
|
|||||||||||||||
Tamara
Augustyn
Vice
President and Principal Accounting Officer
|
|
—
|
|
—
|
|
3,906
|
59,222
|
Termination
Benefit
|
Change
in Control Benefit
|
|||||||||||||||||||||||||||
Name
and Principal
Position
|
Estimate
of
Total
Severance
Value
$
|
Termination
Reason
|
Cash
Severance
Multiple
|
Equity
Treatment (3)
|
Benefit
Continu-
ation
|
Retirement
Continu-
ation
|
Other
|
Estimate
of Total
Change
in
Control
Value
$
|
Protection
Period
|
Cash
Severance
Multiple
|
Equity
Award
Treatment
|
Benefit
Continu-
ation
|
Retirement
Continu-
ation
|
|||||||||||||||
James
DeBlasio
Chief
Executive Officer
|
|
637,500
|
Involuntary
Termination Without cause
|
1.5x
Base Salary
|
No accelerated
vesting - Executive has 90 days to exercise vested options
|
18
months
|
—
|
—
|
|
2,332,400
|
24
months
|
2x(Base
Salary + Maximum Target Bonus)
|
100% vesting
of restricted stock and options
|
18
months
|
—
|
|||||||||||||
David
Buckel (1)
Chief
Financial Officer
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Vincent
Molinaro
Chief
Operating Officer
|
525,000
|
Involuntary
Termination Without cause
|
1.5x
Base Salary
|
No accelerated
vesting - Executive has 90 days to exercise vested
options
|
18
months
|
—
|
—
|
2,091,250
|
24
months
|
2x(Base
Salary + Maximum Target Bonus)
|
100% vesting
of restricted stock and options
|
18
months
|
—
|
|||||||||||||||
Richard
Dobb
Vice
President and General Counsel
|
240,000
|
Involuntary
Termination Without cause
|
1x
Base Salary
|
No accelerated
vesting - Executive has 90 days to exercise vested
options
|
18
months
|
—
|
—
|
924,900
|
24
months
|
2x(Base
Salary + Maximum Target Bonus)
|
100% vesting
of restricted stock and options
|
18
months
|
—
|
|||||||||||||||
Philip
Kaplan
Chief
Strategy Officer
|
235,000
|
Involuntary
Termination Without cause
|
1x
Base Salary
|
No accelerated
vesting - Executive has 90 days to exercise vested
options
|
18
months
|
—
|
—
|
643,900
|
24
months
|
2x(Base
Salary + Maximum Target Bonus)
|
100% vesting
of restricted stock and options
|
18
months
|
—
|
|||||||||||||||
Tamara
Augustyn
Vice
President and Principal Accounting Officer
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(1)
|
Mr.
Buckel resigned in November of
2007.
|
•
|
The
cash fee for Directors for attendance at a Board meeting in person is
$1,500 and by telephone is $750 per meeting;
|
|
•
|
The
cash fee for Directors for attendance at a Committee meeting in person is
$1,000 and by telephone is $750 per meeting;
|
|
•
|
The
annual retainer paid to each Director is $20,000.
|
|
|
•
|
An
annual stock option grant to each Director of 5,000 shares of the
Company’s common stock. The options have an exercise price equal to 100%
of the fair market value of our common stock on the date of grant and are
fully vested and exercisable as of the date of
grant;
|
•
|
An
annual grant of 2,500 restricted stock units, which vests ratably over a
three-year period, subject to the terms in the stock grant agreement and
Stock Plan under which the restricted stock units are
granted;
|
•
|
The
Chair of the Compensation Committee of the Board of Directors receives an
annual retainer of $7,500;
|
•
|
Other
members of the Compensation Committee receive an annual retainer of
$2,500;
|
•
|
Members
of the Audit Committee, other than the Chair, receive an annual retainer
of $5,000. The Audit Committee Chair’s retainer is
$10,000.
|
|
•
|
The
Chair of the Nominations and Governance Committee of the Board of
Directors receives an annual retainer of
$5,000.
|
•
|
The
Chairman of the Board of Directors receives an annual retainer of
$40,000.
|
•
|
New
non-employee Directors receive a grant of 12,500 restricted stock units,
which vests ratably over a three-year period, subject to the terms of the
stock grant agreement and Stock Plan under which the restricted stock
units are granted.
|
Name
|
|
Fees
Earned or
Paid
in
Cash
$
|
|
Stock
Awards
$(1)
|
Option
Awards
$(1)
|
|
Non-Equity
Incentive
Plan
Compensation
$
|
|
Change
in
Pension Value and
Non-Qualified
Deferred
Compensation
Earnings
$
|
|
All
Other
Compensation
(2)
$
|
|
Total
$
|
|||||
Eidenberg,
Eugene
|
|
42,000
|
|
4,779
|
57,631
|
|
—
|
|
—
|
|
9,879
|
|
114,289
|
|||||
Higgins,
Patricia
|
|
45,250
|
|
4,779
|
57,631
|
|
—
|
|
—
|
|
—
|
|
107,659
|
|||||
Coe,
Charles
|
|
35,875
|
|
4,779
|
57,631
|
|
—
|
|
—
|
|
2,113
|
|
100,397
|
|||||
Harding,
William
|
|
10,250
|
|
4,779
|
57,631
|
|
—
|
|
—
|
|
1,497
|
|
74,157
|
|||||
Harman,
Frederick (3)
|
9,000
|
—
|
—
|
—
|
—
|
2,399
|
11,399
|
|||||||||||
Ober,
Kevin
|
|
33,000
|
|
4,779
|
57,631
|
|
—
|
|
—
|
|
8,347
|
|
103,757
|
|||||
Pfeiffer,
Gary
|
|
10,250
|
|
17,813
|
—
|
|
—
|
|
—
|
|
3,069
|
|
31,132
|
|||||
Stanzione,
Daniel
|
|
36,000
|
|
4,779
|
57,631
|
|
—
|
|
—
|
|
124
|
|
98,533
|
(1)
|
Based
on the grant date fair value of outstanding awards that vested in 2007
computed in accordance with FAS
123R.
|
(2)
|
Includes
consulting fees and reimbursement for expenses.
|
(3)
|
Mr.
Harman resigned on March 15, 2007.
|
Name
|
|
Options
|
|
Shares
of
Restricted
Stock
|
||
Eidenberg,
Eugene
|
|
142,999
|
2,500
|
|||
Higgins,
Patricia
|
|
34,000
|
|
2,500
|
||
Coe,
Charles
|
|
36,000
|
|
2,500
|
||
Harding,
William (1)
|
|
—
|
|
—
|
||
Harman,
Frederick (2)
|
—
|
—
|
||||
Ober,
Kevin
|
|
21,000
|
|
2,500
|
||
Pfeiffer,
Gary
|
|
—
|
|
12,500
|
||
Stanzione,
Daniel
|
|
34,000
|
|
2,500
|
||
(1)
|
Dr.
Harding retired from Morgan Stanley Venture Partners III, LLC and Morgan
Stanley & Co., Inc. in October of 2007. He assigned all of
his equity compensation received while serving on our Board of Directors
to Morgan Stanley, which consists of 2,500 shares of restricted common
stock and options to purchase 27,000 shares of common stock that are
vested and exercisable. Dr. Harding disclaims beneficial
ownership in all such shares. Because Dr. Harding has retired from Morgan
Stanley, such shares are excluded from the table
above.
|
(2)
|
Mr.
Harman resigned on March 15,
2007.
|
|
The
Compensation Committee
|
|
Charles
B. Coe
|
|
Patricia
L. Higgins
|
|
Gary
Pfeiffer
|
|
Daniel
Stanzione
|
|
Audit
Committee
|
|
Patricia
L. Higgins
|
|
William
J. Harding
|
|
Kevin
L. Ober
|
|
Gary
Pfeiffer
|
Name
and Position
|
Dollar
Value ($)
|
Number
of Units
|
||||||
James
DeBlasio
Chief
Executive Officer
|
$ | 0 | 0 | |||||
David
Buckel (1)
Chief
Financial Officer
|
$ | 0 | 0 | |||||
Vincent
Molinaro
Chief
Operating Officer
|
$ | 0 | 0 | |||||
Richard
Dobb
Vice
President and General Counsel
|
$ | 0 | 0 | |||||
Philip
Kaplan
Chief
Strategy Officer
|
$ | 0 | 0 | |||||
Tamara
Augustyn
Vice
President and Principal Accounting Officer
|
$ | 0 | 0 | |||||
Executive
Group
|
$ | 0 | 0 | |||||
Non-Executive
Director Group
|
$ | 0 | 0 | |||||
Non-Executive
Officer Employee Group
|
$ | 0 | 0 |
|
2007
|
|
2006
|
|||
Audit
Fees (1)
|
|
$
|
1,988,994
|
|
$
|
1,298,297
|
Audit-Related
Fees (2)
|
|
325,694
|
|
399,966
|
||
Tax
Fees (3)
|
|
78,530
|
|
52,768
|
||
All
Other Fees (4)
|
|
1,500
|
|
142,804
|
||
Total
|
|
$
|
2,394,718
|
|
$
|
1,893,835
|
(1)
|
Fees
related to the audit of Internap’s annual financial statements, including
the audit of the effectiveness of internal control over financial
reporting and the reviews of the quarterly financial statements filed on
Forms 10-Q, and, for 2006, included the audit of management’s assessment
of internal control over financial reporting.
|
||||||||
(2)
|
Fees
primarily related to international statutory filings and, in 2006, also
included registration statements.
|
||||||||
(3)
|
Fees
primarily related to tax compliance, advice and
planning.
|
||||||||
(4)
|
Fees
related to services performed in conjunction with other professional
services.
|
|
Internap
Network Services Corporation
|
|
250
Williams Street, Suite E-100
|
|
Atlanta,
Georgia 30303
|
|
Attention:
Corporate Secretary
|
Page
|
||
§
1. BACKGROUND AND PURPOSE
|
1
|
|
§
2. DEFINITIONS
|
1
|
|
2.1
|
Affiliate
|
1
|
2.2
|
Board
|
1
|
2.3
|
Change
Effective Date
|
1
|
2.4
|
Change
in Control
|
2
|
2.5
|
Code
|
5
|
2.6
|
Committee
|
5
|
2.7
|
Company
|
6
|
2.8
|
Director
|
6
|
2.9
|
Eligible
Employee
|
6
|
2.10
|
Fair
Market Value
|
6
|
2.11
|
ISO
|
7
|
2.12
|
1933
Act
|
7
|
2.13
|
1934
Act
|
7
|
2.14
|
Non-ISO
|
7
|
2.15
|
Option
|
7
|
2.16
|
Option
Certificate
|
7
|
2.17
|
Option
Price
|
7
|
2.18
|
Parent
|
7
|
2.19
|
Plan
|
7
|
2.20
|
Preexisting
Plan
|
7
|
2.21
|
Rule
16b-3
|
8
|
2.22
|
SAR
Value
|
8
|
2.23
|
Stock
|
8
|
2.24
|
Stock
Appreciation Right
|
8
|
2.25
|
Stock
Appreciation Right Certificate
|
8
|
2.26
|
Stock
Grant
|
8
|
2.27
|
Stock
Grant Certificate
|
8
|
2.28
|
Stock
Unit Grant
|
8
|
2.29
|
Subsidiary
|
9
|
2.30
|
Ten
Percent Shareholder
|
9
|
§
3. SHARES AND GRANT LIMITS
|
9
|
|
3.1
|
Shares
Reserved
|
9
|
3.2
|
Source
of Shares
|
9
|
3.3
|
Use
of Proceeds
|
10
|
3.4
|
Grant
Limits
|
10
|
3.5
|
Preexisting
Plan
|
10
|
11
|
||
§
5. COMMITTEE
|
11
|
|
§
6. ELIGIBILITY
|
12
|
|
§
7. OPTIONS
|
12
|
|
7.1
|
Committee
Action
|
12
|
7.2
|
$100,000
Limit
|
13
|
7.3
|
Option
Price
|
13
|
7.4
|
Payment
|
13
|
7.5
|
Exercise
|
14
|
§
8. STOCK APPRECIATION RIGHTS
|
15
|
|
8.1
|
Committee
Action
|
15
|
8.2
|
Terms
and Conditions
|
15
|
8.3
|
Exercise
|
17
|
§
9. STOCK GRANTS
|
18
|
|
9.1
|
Committee
Action
|
18
|
9.2
|
Conditions
|
18
|
9.3
|
Dividends,
Voting Rights and Creditor Status
|
21
|
9.4
|
Satisfaction
of Forfeiture Conditions.
|
22
|
9.5
|
Income
Tax Deduction
|
22
|
§
10. NON-TRANSFERABILITY
|
25
|
|
§
11. SECURITIES REGISTRATION
|
26
|
|
§
12. LIFE OF PLAN
|
27
|
|
§
13. ADJUSTMENT
|
27
|
|
13.1
|
Capital
Structure
|
27
|
13.2
|
Available
Shares
|
28
|
13.3
|
Transactions
Described in § 424 of the Code
|
29
|
13.4
|
Fractional
Shares
|
30
|
§
14. CHANGE IN CONTROL
|
30
|
|
§
15. AMENDMENT OR TERMINATION
|
32
|
|
§
16. MISCELLANEOUS
|
32
|
|
16.1
|
Shareholder
Rights
|
32
|
16.2
|
No
Contract of Employment
|
33
|
16.3
|
Withholding
|
33
|
16.4
|
Construction
|
33
|
Other
Conditions
|
34
|
|
16.6
|
Rule
16b-3
|
34
|
16.7
|
Coordination
with Employment Agreements and Other Agreements
|
34
|
(a)
|
An
acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the 1934 Act) (an “Entity”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the 1934
Act) of 30% or more of either (i) the then outstanding shares of Stock
(the “Outstanding Stock”) or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Voting Securities”);
excluding, however, the following: (A) any acquisition directly from the
Company, other than an acquisition by virtue of the exercise of a
conversion privilege unless the security being so converted was itself
acquired directly from the Company, (B) any acquisition by the Company,
(C) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by
the Company, or (D) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of subsection
(c) of this Section;
|
(b)
|
A
change in the composition of the Board such that the individuals who, as
of the Change Effective Date, constitute the Board (such Board shall be
hereinafter referred to as the “Incumbent
Board”),
|
|
cease
for any reason to constitute at least a majority of the Board; provided,
however, that for purposes of this definition, any individual who becomes
a member of the Board subsequent to the Change Effective Date, whose
election, or nomination for election, by the Company’s stockholders was
approved by a vote of at least a majority of those individuals who are
members of the Board and who were also members of the Incumbent Board (or
deemed to be such pursuant to this proviso), shall be considered as though
such individual were a member of the Incumbent Board; and provided,
further however, that any such individual whose initial assumption of
office occurs as a result of or in connection with either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the 1934 Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of an
Entity other than the Board shall not be so considered as a member of the
Incumbent Board;
|
(c)
|
The
approval by the stockholders of the Company of a merger, reorganization or
consolidation or sale or other disposition of all or substantially all of
the assets of the Company (each, a “Corporate Transaction”) or, if
consummation of such Corporate Transaction is subject, at the time of such
approval by stockholders, to the consent of any government or governmental
agency, the obtaining
|
|
of
such consent either explicitly or implicitly by consummation); excluding
however, such a Corporate Transaction pursuant to which (i) all or
substantially all of the individuals and entities who are the beneficial
owners, respectively, of the Outstanding Stock and Outstanding Voting
Securities immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 60% of, respectively,
the outstanding shares of common stock, and the combined voting power of
the then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting
from such Corporate Transaction (including, without limitation, a Parent)
in substantially the same proportions as their ownership, immediately
prior to such Corporate Transaction, of the Outstanding Stock and
Outstanding Voting Securities, as the case may be, (ii) no Entity (other
than the Company, any employee benefit plan (or related trust) of the
Company, such corporation resulting from such Corporate Transaction or, if
reference was made to equity ownership of any Parent for purposes of
determining whether clause (i) above is satisfied in connection with the
applicable Corporate Transaction, such Parent) will beneficially own,
directly or indirectly, 50% or more of, respectively, the outstanding
shares of common stock of the corporation
resulting
|
|
from
such Corporate Transaction or the combined voting power of the outstanding
voting securities of such corporation entitled to vote generally in the
election of directors unless such ownership resulted solely from ownership
of securities of the Company prior to the Corporate Transaction, and (iii)
individuals who were members of the Incumbent Board will immediately after
the consummation of the Corporate Transaction constitute at least a
majority of the members of the board of directors of the corporation
resulting from such Corporate Transaction (or, if reference was made to
equity ownership of any Parent for purposes of determining whether clause
(i) above is satisfied in connection with the applicable Corporate
Transaction, of the Parent); or
|
(d)
|
The
approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.
|
(a)
|
Exercise
Period. Each Option granted under this Plan shall be
exercisable in whole or in part at such time or times as set forth in the
related Option Certificate, but no Option Certificate shall make an Option
exercisable on or after the earlier of
|
|||
(1)
|
the
date which is the fifth anniversary of the date the Option is granted, if
the Option is an ISO and the Eligible Employee is a Ten Percent
Shareholder on the date the Option is granted, or
|
|||
(2)
|
the
date which is the tenth anniversary of the date the Option is granted, if
the Option is (a) a Non-ISO or (b) an ISO which is granted to
an
|
(b)
|
Termination of Status
as Eligible Employee or Director. Subject to § 7.5(a),
an Option Certificate may provide for the exercise of an Option after an
Eligible Employee’s or a Director’s status as such has terminated for any
reason whatsoever, including death or
disability.
|
(a)
|
Stock Appreciation
Right Certificate. If a Stock Appreciation Right is granted
independent of an Option, such Stock Appreciation Right shall be evidenced
by a Stock Appreciation Right Certificate,
and
|
(b)
|
Option
Certificate. If a Stock Appreciation Right is granted
together with an Option, such Stock Appreciation Right shall be evidenced
by an Option Certificate, the number of shares of Stock on which the
Eligible Employee’s or Director’s right to appreciation shall be based
shall be the same as the number of shares of Stock subject to the related
Option, and the SAR Value for each such share of Stock shall be no less
than the Option Price under the related Option. Each such Option
Certificate shall provide that the exercise of the Stock Appreciation
Right with respect to any share of Stock shall cancel the Eligible
Employee’s or Director’s right to
exercise
|
(c)
|
Minimum Period of
Service. If the only condition to exercise of a Stock
Appreciation Right is the completion of a period of service, such period
of service shall be no less than the one (1) year period which starts on
the date as of which the Stock Appreciation Right is granted unless the
Committee determines that a shorter period of service (or no period of
service) better serves the Company’s
interest.
|
(a)
|
Conditions to Issuance
of Stock. The Committee acting in its absolute discretion
may make the issuance of Stock under a Stock Grant subject to the
satisfaction of one, or more than one, condition which the Committee deems
appropriate under the
|
(b)
|
Conditions on
Forfeiture of Stock or Cash Payment. The Committee acting in
its absolute discretion may make any cash payment due under a Stock Unit
Grant or Stock issued in the name of an Eligible Employee or Director
under a Stock Grant non-forfeitable subject to the satisfaction of one, or
more than one, objective employment, performance or other condition that
the Committee acting in its absolute discretion deems appropriate under
the circumstances for Eligible Employees or Directors generally or for an
Eligible Employee or a Director in particular, and the related Stock Grant
Certificate shall set forth each such condition, if any, and the deadline,
if any, for satisfying each such condition. An Eligible Employee’s or a
Director’s non-forfeitable interest in the shares of Stock underlying a
Stock Grant or the
|
(c)
|
Minimum Period of
Service. If the only condition to the forfeiture of a Stock
Grant or a Stock Unit Grant is the completion of a period of service, such
period of service shall be no less than the three (3) year period which
starts on the date as of which the Stock Grant or Stock Unit Grant is made
unless the Committee determines that a shorter period of service (or no
period of service) better serves the Company’s
interest.
|
(a)
|
Cash
Dividends. Except as otherwise set forth in a Stock Grant
Certificate, if a dividend is paid in cash on a share of Stock after such
Stock has been issued under a Stock Grant but before the first date that
an Eligible Employee’s or a Director’s interest in such Stock (1) is
forfeited completely or (2) becomes completely non-forfeitable, the
Company shall pay such cash dividend directly to such Eligible Employee or
Director.
|
|
(b)
|
Stock
Dividends. If a dividend is paid on a share of Stock in
Stock after such Stock has been issued under a Stock Grant but before the
first date that an Eligible Employee’s or a Director’s interest in such
Stock (1) is forfeited completely or (2) becomes completely
non-forfeitable, the Company shall hold such dividend Stock subject to the
same conditions under § 9.2(b) as the related Stock
Grant.
|
|
(c)
|
Other.
If a dividend (other than a dividend described in § 9.3(a) or
§ 9.3(b)) is paid with respect to a share of Stock after such Stock
has been issued under a Stock Grant but before the first date that an
Eligible Employee’s or a Director’s interest in such Stock (1) is
forfeited completely or (2) becomes completely non-forfeitable,
the
|
|
Company
shall distribute or hold such dividend in accordance with such rules as
the Committee shall adopt with respect to each such
dividend.
|
(d)
|
Voting.
Except as otherwise set forth in a Stock Grant Certificate, an Eligible
Employee or a Director shall have the right to vote the Stock issued under
his or her Stock Grant during the period which comes after such Stock has
been issued under a Stock Grant but before the first date that an Eligible
Employee’s or Director’s interest in such Stock (1) is forfeited
completely or (2) becomes completely non-forfeitable.
|
|
(e)
|
General Creditor
Status. Each Eligible Employee and each Director to whom a
Stock Unit grant is made shall be no more than a general and unsecured
creditor of the Company with respect to any cash payable under such Stock
Unit Grant.
|
(a)
|
General.
The Committee shall (where the Committee under the circumstances deems in
the Company’s best interest) either (1) make Stock Grants and Stock Unit
Grants to Eligible Employees
|
(b)
|
Performance
Goals. A performance goal is described in this § 9.5(b)
if such goal relates to (1) the Company’s return over capital costs or
increases in return over capital costs, (2) the Company’s total earnings
or the growth in such earnings, (3) the Company’s consolidated earnings or
the growth in such earnings, (4) the Company’s earnings per share or the
growth in such earnings, (5) the Company’s net earnings or the growth in
such earnings, (6) the Company’s earnings before interest expense, taxes,
depreciation, amortization and one-time charges or the growth in such
earnings, (7) the Company’s earnings before interest and taxes or the
growth
|
(c)
|
Adjustments.
When the Committee determines whether a performance goal has been
satisfied for any period, the Committee where the Committee deems
appropriate may make such determination using calculations which
alternatively include and exclude one, or more than one, “extraordinary
items” as determined under U.S. generally accepted accounting principles,
and the Committee may determine whether a performance goal has been
satisfied for any period taking into account the alternative which the
Committee deems appropriate under the circumstances. The Committee also
may take into account any other unusual or
non-
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(1)
|
the
tenth anniversary of the effective date of this Plan (as determined under
§ 4), in which event this Plan otherwise thereafter shall continue in
effect until all outstanding Options and Stock Appreciation Rights have
been exercised in full or no longer are exercisable and all Stock issued
under any Stock Grants under this Plan have been forfeited or have become
non-forfeitable, or
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(2)
|
the
date on which all of the Stock reserved under § 3 has (as a result of
the exercise of Options or Stock Appreciation Rights granted under this
Plan or the satisfaction of the forfeiture conditions, if any, on Stock
Grants) been issued or no longer is available for use under this Plan, in
which event this Plan also shall terminate on such
date.
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(a)
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any
equity restructuring or change in the capitalization of the Company,
including, but not limited to, spin offs, stock dividends, large
non-reoccurring dividends, rights offerings or stock splits,
or
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(b)
|
any
other transaction described in § 424(a) of the Code which does not
constitute a Change in Control of the
Company
|
INTERNAP
NETWORK SERVICES CORPORATION
By:__________________________________
Date:______________________
|
C/O
American Stock Transfer
59
Maiden Lane
New
York, NY 10038
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VOTE
BY INTERNET - www.proxyvote.com
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Use
the Internet to transmit your voting instructions and for electronic
delivery
of
information up until 11:59 P.M. Eastern Time the day before the
cut-off
date
or meeting date. Have your proxy card in hand when you access the
web
site
and follow the instructions to obtain your records and to create an
electronic voting instruction form.
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ELECTRONIC
DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS
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If
you would like to reduce the costs incurred by Internap Network Services
Corporation in mailing proxy materials, you can consent to receiving all
future proxy statements, proxy cards and annual reports electronically via
e-mail or
the
Internet. To sign up for electronic delivery, please follow the
instructions
above
to vote using the Internet and, when prompted, indicate that you agree to
receive or access stockholder communications electronically in future
years.
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VOTE
BY PHONE - 1-800-690-6903
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Use
any touch-tone telephone to transmit your voting instructions up
until
11:59
P.M. Eastern Time the day before the cut-off date or meeting
date.
Have
your proxy card in hand when you call and then follow the
instructions.
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VOTE
BY MAIL
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Mark,
sign, and date your proxy card and return it in the postage-paid
envelope
we
have provided or return it to Internap Network Services Corporation, c/o
Broadridge, 51 Mercedes Way, Edgewood, NY
11717.
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TO
VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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INSC01
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KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
|
INTERNAP
NETWORK SERVICES CORPORATION
|
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE
|
“FOR”
EACH OF THE BELOW-LISTED PROPOSALS.
|
Vote On
Directors
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(1)
|
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To
elect three Directors to serve until the 2011 annual meeting and one
Director to serve until the 2010 annual meeting and until their successors
are elected and qualified, or until such Director’s earlier death,
resignation or removal (except as indicated to the contrary on the
right).
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For
All
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Withhold
All
|
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For All
Except
|
|
To
withhold authority to vote for any
individual
nominee(s), mark “For All Except” and write the number(s) of the
nominee(s)
on
the line below.
|
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¨
|
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¨
|
|
¨
|
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01)
Eugene Eidenberg
for a term to expire at the 2011 annual meeting
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02)
William Harding
for a term to expire at the 2011 annual meeting
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03)
Daniel Stanzione
for a term to expire at the 2011 annual meeting
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04)
Gary Pfeiffer for
a term to expire at the 2010 annual
meeting
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For
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Against
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Abstain
|
|||
Vote On Proposal |
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||||
(2) |
To
amend the Certificate of Incorporation;
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¨
|
¨
|
¨
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|||
(3) |
To
increase the number of shares available for issuance pursuant to the
Amended and Restated Internap Network Services Corporation 2005 Incentive
Stock Plan by four million shares;
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¨
|
¨
|
¨
|
|||
(4) |
To
ratify the appointment of PricewaterhouseCoopers LLP as the independent
registered public accounting firm of the Company for the fiscal year
ending December 31, 2008.
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¨
|
|
¨
|
|
¨
|
In
their discretion, the proxies are authorized to vote upon such other
business as properly may come before the annual meeting and any and all
adjournments thereof.
|
|
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|
|||
This
Proxy will be voted in the manner directed by the undersigned stockholder.
If this Proxy is returned and no direction is provided by the undersigned
stockholder, this Proxy will be voted FOR ALL NOMINEES in Proposal 1 and
FOR Proposals 2, 3 and 4.
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|
Please
indicate if you plan to attend the annual meeting
|
|
¨
|
|
¨
|
|
|
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Yes
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No
|
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|||||||
Signature
[PLEASE SIGN WITHIN BOX]
|
Date
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Signature
(Joint Owners)
|
|
Date
|
Revocable
Proxy
|
|
COMMON
STOCK
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