Offer Letter

Employment Security Plan

 

 

EX-10.1 2 ex10-1.htm EXHIBIT 10.1


Exhibit 10.1

 

Internap Network Services Corporation

250 Williams Street

Atlanta, GA  30303

 

January 16, 2009

 

 

 

Eric Cooney

4535 E Conway Dr NW

Atlanta, GA 30327

 

Dear Eric:

 

On behalf of Internap Network Services Corporation, subject to satisfactory completion of reference checks and the RRA assessment process, I am pleased to offer you the position of President and Chief Executive Officer.  Additionally, you would be appointed as a director of Internap.  This letter outlines the terms of this offer, which assumes that you would commence work on February 1, 2009.

 

Your annual base salary would be $600,000, payable in accordance with Internap’s payroll practices, and would be reviewed annually for possible increases.  Your annual target bonus would be 100% of your annual base salary, commencing your start date.  The performance criteria underlying the bonus for 2009 would be established by Internap’s Board of Directors no later than March 31, 2009.  Your bonus would be structured so that the maximum bonus opportunity is twice the target bonus.

 

You would receive a cash signing bonus of $300,000, payable upon your commencement of work.  However, if your employment terminates on or prior to March 1, 2011, under the circumstances described in Section 1.3 of the Employment Security Plan, which is discussed below, you will be obligated to reimburse Internap for 50% of the signing bonus.  All compensation is subject to customary withholdings and practices of Internap.

 

Upon commencement of your work, you will be granted an option to purchase 600,000 shares of Internap common stock at an exercise price equal to the closing price on the day of commencement.  The vesting schedule for these options will be 25% on the first anniversary of the grant date and in 36 equal monthly installments thereafter.

 

You will also receive a new hire grant of 300,000 shares of restricted stock. These restricted shares will vest in four equal annual increments. Additionally, on the first anniversary of your commencement date, you will receive a grant of 200,000 shares of restricted stock that will vest in four equal annual increments from the date of grant.  Finally, on the second anniversary of your commencement date, you will be granted an additional 200,000 shares of restricted stock that will vest in four annual increments from the date of grant.   Vesting of restricted stock is subject to the surrender of shares for the payment of applicable taxes.

 

You would accrue 20 days of vacation/sick leave annually as well as three personal days each year.  You would have the right to carry over any unused vacation subject to the maximum accrual under the Company policy.  In addition, you would be eligible to participate in the health, welfare and other benefit plans made available to Internap’s executive officers.

 

 

 

 


 

 

 

Page 2

 

 

You would receive the benefit of Internap’s Employment Security Plan, which has been provided to you.  Your “Joinder Agreement” to the Employment Security Plan would provide for an “Applicable Multiple” equal to “one” in the event of a “Qualifying Termination” other than during a “Protected Period,” and “2.5” in the event of a “Qualifying Termination” during a “Protected Period” (essentially, in the event of a change-in-control related termination).  The Employment Security Plan covers all of our other executive officers and, we believe, provides eminently fair and market-based benefits in the event of a termination.  The Employment Security Plan is the exclusive source of your rights in the event that your employment is terminated.

 

You will be subject to Internap’s stock retention guidelines, which generally require that you hold 50% of the shares that you receive from Internap, net after taxes and transaction costs, for five years from the date of their acquisition.

 

Your continued status as a director of Internap is subject to periodic stockholder approval and such other limitations as might apply to directors generally.

 

Lastly, your employment by Internap will be “at will.”  Both you and Internap will have the right to terminate the employment relationship at any time with or without cause, and with or without advance notice.  In the event that your employment with the company is terminated for any reason, you agree to immediately resign as a director of the Company upon request.  We are excited about the future of Internap and are confident in your ability to lead Internap to the next level of its development.  We hope that you will accept this offer and look forward to a long and prosperous relationship with you.

 

This offer is made on the basis of your starting your employment on February 1, 2009, or in consideration of your transition from your current employer, a date mutually agreed upon by February 1, 2009.  If this offer is acceptable to you, please indicate your acceptance by signing a copy of this letter and returning it to me.

 

                        Sincerely yours,

 

                        /s/ Charlie Coe

 

                        Charlie Coe

                        On behalf of the Board of Directors

 

Accepted:

 

/s/ J. Eric Cooney                             

 

 

 

 

EX-10.2 3 ex10-2.htm EXHIBIT 10.2


Exhibit 10.2

 

Joinder Agreement

For

Eric Cooney

 

The undersigned hereby agrees to be bound by the terms and conditions of the Employment Security Plan of Internap Network Services, Inc., dated as of November 14, 2007, as if he initially had executed such Plan as a party thereto, and, without by implication limiting the foregoing, agrees to each acknowledgment, covenant and other agreement contained therein.

 

The provisions below shall apply notwithstanding Section 1.2(f) of the Plan.

 

(a) In the event that it shall be determined that any Payment would constitute an “excess parachute payment” within the meaning of Section 280G of the Code, then the Company shall pay the Executive an additional amount (the “Gross-Up Payment”) such that the net amount retained by the Executive after deduction of any excise tax imposed under Section 4999 of the Code, and any federal, state and local income tax, employment tax, excise tax and other tax imposed upon the Gross-Up Payment, shall be equal to the Payment.  For purposes of this provision, “Payment” means any payment or distribution or provision of benefits by the Company to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any reductions required by this provision.

 

(b) Except as set forth in the next sentence, all determinations to be made under this provision shall be made by the nationally recognized independent public accounting firm used by the Company immediately prior to the Change of Control (“Accounting Firm”), which Accounting Firm shall provide its determinations and any supporting calculations to the Company and Executive within ten days of Executive’s Termination Date. If determined by the Accounting Firm to be excludible from parachute payments under Section 280G of the Code, the value of the Executive’s non-competition covenant under Section 2.3 of the Plan shall be determined by independent appraisal by a nationally-recognized business valuation firm acceptable to both the Executive and the Company, and a portion of the Payment shall, to the extent of that appraised value, be specifically allocated as reasonable compensation for such non-competition covenant and shall not be treated as a parachute payment. Any such determination by the Accounting Firm shall be binding upon the Company and Executive.

 

(c) It is possible that amounts will have been paid or distributed by the Company to or for the benefit of Executive pursuant to this provision that should not have been so paid or distributed (“Overpayment”) or that additional amounts which will have not been paid or distributed by the Company to or for the benefit of Executive pursuant to this Agreement could have been so paid or distributed (“Underpayment”).  In the event that the Accounting Firm, based either upon the assertion of a deficiency by the Internal Revenue Service against the Company or Executive that the Accounting Firm believes has a high probability of success determines that an Overpayment has been made, any such Overpayment paid or distributed by the Company to or for the benefit of Executive shall be treated for all purposes as a loan to Executive that Executive shall repay to the Company together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code; provided, however, that no such loan shall be deemed to have been made and no amount shall be payable by Executive to the Company if and to the extent such deemed loan and payment would not either reduce the amount on which Executive is subject to tax under Sections 1 and 4999 of the Code or generate a refund of such taxes. In the event that the Accounting Firm, based upon controlling precedent or substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code.

 

 

 


 

 

(d) All of the fees and expenses of the Accounting Firm in performing the determinations referred to in this provision shall be borne solely by the Company.

 

(e) All payments to be made under this provision (other than the Underpayment described in  paragraph (c) must be made by the end of the Executive’s taxable year next following the Company’s taxable year in which the Company remits the related taxes.  Any right to reimbursement incurred due to a tax audit or litigation addressing the existence or amount of a tax liability must be made by the end of the Executive’s taxable year following the Executive’s taxable year in which the taxes that are the subject of the audit or litigation are remitted to the taxing authorities or, where no such taxes are remitted, the end of the Executive’s taxable year following the year in which the audit is completed or there is a final and non-appealable settlement or the resolution of the litigation.

 

Notwithstanding the provisions of the Plan, Section 5.13(b)(ii)(A) shall be deemed modified with respect to Employee so as to delete the words “, other than due solely to the fact that Company no longer is a publicly traded company,”.

 

Notwithstanding the provisions of the Plan, (i) Schedule A shall be deemed to contain the title “Chief Executive Officer;” and (ii) Schedule B shall be deemed to contain an entry for “Chief Executive Officer” and correspondingly in the first column shall be deemed to contain the number “1” and the second column shall be deemed to contain the number “2.5”.

 

 

 

/s/ J. Eric Cooney

 

 

 

Employee

 

 

 

 

 

 

 

January 28, 2009

 

 

 

Date

 

 

 

 

/s/ Richard P. Dobb

 

Chief Administrative Officer

 

 

 

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