Document:

Well Known Seasoned Issuer

    
      

    

     

    Exhibit
      10.27

     

    

       

      

       

       

      EMPLOYMENT
        AGREEMENT 

       

       

              Employment
        Agreement (this "Agreement") dated as of February 1, 2004 (the "Effective
        Date"), by and between Internap Network Services Corporation (the "Company")
        and
        Eric Suddith ("Executive") (collectively the "Parties"). 

       

       

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      1.
        Position
        and Duties.
        Executive shall
        serve as the Vice President, Operations for the Company, with such duties,
        authorities and responsibilities as are commensurate with such position.
        Executive shall report to the Company's Chief Executive Officer (“CEO”) and
        shall work from the Company's offices in Atlanta, Georgia. 

       

       

      2.
        Base
        Salary.
        Executive shall
        receive an annual base salary of $ 160,000.00 ("Base Salary"). Payment of
        Base
        Salary shall be subject to standard payroll tax withholdings and deductions.
        Executive's Base Salary shall be paid semi-monthly in accordance with the
        Company's standard payroll practices. Executive's Base Salary may be increased
        or decreased from time to time by the CEO in consultation with the Company's
        Board of Directors or the Compensation Committee of such Board of Directors
        (in
        either case, the "Board") in their sole discretion.

       

       

              3.    Performance-Based
        Bonus.
        While the Company
        has not decided to implement a bonus plan (“Bonus”) for Executive and other
        senior executive officers at this time, should it do so in the future its
        present intention is that Executive’s Bonus would be from 35% to up to 50% of
        Executive's Base Salary, prorated if less than a full year. Performance metrics
        for the Bonus, if any, for 2004 shall be established by the CEO in consultation
        with the Board and in their sole and reasonable discretion as soon as
        practicable after a determination has been made to implement a Bonus plan
        for
        Executive and other senior executive officers. Performance metrics for and
        target amount of the Bonus for 2005 and each subsequent calendar year shall
        be
        established on or before February 28 of the year to which the Bonus relates.
        The
        CEO, in consultation with the Board and in their sole and reasonable discretion,
        shall determine, on or before February 28 of the year in which the Bonus
        would
        be payable, whether a Bonus is payable and, if so, the amount of such Bonus.
        Unless otherwise determined by the Board, all Bonus payments shall be made
        on
        the Company's first regular payroll date following such determination and
        shall
        be subject to standard payroll tax withholdings and deductions. To be eligible
        for a Bonus, Executive must be continuously employed by the Company through
        the
        date on which the Bonus is paid. Executive recognizes and agrees that: (a)
        the
        Company may in its sole discretion and with reasonable notice to Executive
        determine that any Bonus, if payable, may be paid in whole or in part in
        the
        Company’s common stock or other equity securities, including restricted stock
        and stock options; and (b) the Company may in its sole discretion suspend
        or
        discontinue any bonus program at any time without any liability on the part
        of
        the Company.

       

       

            
        4.    Equity Compensation.
        The Company and
        Executive acknowledge that the Company will issue to Executive one or more
        options to purchase 250,000 shares of the Company’s common stock, subject to the
        terms and conditions of the relevant option plan(s) and related stock option
        agreement(s) (the "Options") no later than March 15, 2004. The Board, upon
        the
        recommendation of the CEO and in their sole discretion, may award additional
        options or equity or other equity-based compensation to Executive

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      on
        terms, in amounts and subject to performance goals as determined by the CEO
        and
        the Board (any such options also being referred to hereinafter as “Options” and
        any such equity or equity-based compensation being referred to herein as
        “Additional Equity Compensation”).

       

       

              5.    Employee
        Benefits. Executive
        shall be
        entitled to participate in all employee benefit, welfare and other plans
        and
        programs generally applicable to employees of the Company. Except as provided
        herein, the Company reserves the right to modify Executive's compensation
        and
        benefits from time to time, as it deems necessary

       

       

      6.
        Vacation.
        Executive shall
        accrue twenty (20) days of combined vacation/sick leave annually. Executive
        also
        shall receive three (3) personal days each year. Executive shall have the
        right to carry over unused vacation from any one-year period to any other
        subsequent one-year period.     

       

       

       7.  Nature
        of Employment.
        Executive's
        employment with the Company shall be at-will. Both Executive and the Company
        shall have the right to terminate the employment relationship at any time,
        with
        or without cause, and with or without advance notice. 

       

       

      8.
        Severance Payments. Upon
        Executive's
        involuntary termination by the Company of employment without Cause (as defined
        below), Executive shall receive a cash severance payment equal to the product
        of
        (x) the number of days that Executive is am employee of the Company, divided
        by
        365 (provided that the foregoing ratio shall never exceed one (1) and (y)
        Executive’s then-current Base Salary. Payment of such severance amounts shall be
        subject to standard payroll tax withholdings and deductions. In
        addition to the
        severance benefits provided above, upon Executive's involuntary termination
        of
        employment without Cause, all of Executive’s unvested Options and Additional
        Equity Compensation shall lapse and expire, and all of Executive’s vested
        Options shall remain exercisable no later than three months after the date
        of
        termination. No payment or acceleration of Options or Additional Equity
        Compensation shall be made pursuant to this Section 8 unless prior to or
        concurrent with such payment a valid release has been executed and delivered
        by
        Executive and becomes effective in accordance with Section 11 hereof.
        Notwithstanding the immediately preceding sentence, Executive shall not be
        entitled to any benefits or rights under this Section 8 if Executive also
        is eligible for payments and/or benefits under Section 9 hereof.

       

       

      9.
        Change
        in Control Payments and Acceleration.
        Upon Executive's
        involuntary termination of employment without Cause (as defined below) or
        voluntary termination of employment for Good Reason, in either case within
        12
        months after
        a Change in
        Control, (i) the Company shall pay Executive a cash severance payment equal
        to
        two time the sum of Executive's then-current Base Salary and maximum target
        Bonus and (ii) all of Executive’s unvested Options and Additional Equity
        Compensation shall become vested, free of restrictions and immediately
        exercisable for the remaining term of the relevant grant or award.

       

       

      Payment
        of such
        severance payments shall be subject to standard payroll tax withholdings
        and
        deductions. 

       

      
        
           

        

        
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      No
        payment or acceleration of Options or Additional Equity Compensation shall
        be
        made unless prior to or concurrent with such payment a valid release has
        been
        executed and delivered by Executive and becomes effective in accordance with
        Section 11 hereof. 

       

       

      Executive
        will
        continue to receive the healthcare and life insurance coverages in effect
        on his
        date of termination for twenty-four (24) months after the date of termination
        pursuant to this Section 9 just as if he had remained an active employee
        of the
        Company, subject to Executive paying the customary employee portion of such
        coverages, provided that if the Company cannot continue to cover Executive
        under
        its plans, the Company will separately provide Executive with comparable
        coverages or pay Executive in a lump sum the costs of such
        coverages.

       

      For
        purposes of
        this Agreement, "Change in Control” shall mean the happening of any of the
        following events:

      

      (i)
        An acquisition
        by any individual, entity or group (within the meaning of Section 13 (d)
        (3) or
        14 (d) (2) of the Exchange Act) (an "Entity") of beneficial ownership (within
        the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more
        of
        either (A) the then outstanding shares of common stock of the Company (the
        "Outstanding Company Common Stock") or (B) the combined voting power of the
        then
        outstanding voting securities of the Company entitled to vote generally in
        the
        election of directors (the "Outstanding Company Voting Securities"); excluding,
        however, the following: (1) 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,
        (2) any acquisition by the Company, (3) any acquisition by any employee benefit
        plan (or related trust) sponsored or maintained by the Company or any
        corporation controlled by the Company, or (4) any acquisition by any corporation
        pursuant to a transaction which complies with clauses (A), (B) and (C) of
        subsection (iii) of this Section; (ii) A change in the composition of the
        Board
        such that the individuals who, as of the Effective Date, constitute the Board
        (such Board shall be hereinafter referred to as the "Incumbent Board"),
        excluding the current members of the Board (“Series A Directors”) who have been
        elected pursuant to the terms of the Company’s Series A Convertible Preferred
        Stock (“Series A Stock”), 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 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), excluding the Series A Directors, 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 Exchange 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;

      

      (iii)
        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
        

      
        
           

        

        
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      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 (A) all or substantially all of the individuals
        and entities who are the beneficial owners, respectively, of the Outstanding
        Company Common Stock and Outstanding Company 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
        corporation or other Person which as a result of such transaction owns the
        Company or all or substantially all of the Company's assets either directly
        or
        through one or more subsidiaries (a "Parent Company")) in substantially the
        same
        proportions as their ownership, immediately prior to such Corporate Transaction,
        of the Outstanding Company Common Stock and Outstanding Company Voting
        Securities, as the case may be, (B) 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 Company for purposes of determining whether clause
        (A)
        above is satisfied in connection with the applicable Corporate Transaction,
        such
        Parent Company) 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 (C)
        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 Company for purposes of determining whether clause (A) above is satisfied
        in connection with the applicable Corporate Transaction, of the Parent Company);
        or 

      

      (iv)
        The approval
        by the stockholders of the Company of a complete liquidation
        or
        dissolution of the Company.

      

      For
        purposes of
        this Agreement, “Cause” shall mean:

      

      (i)
        Executive's
        conviction (including a plea of guilty or nolo contendere) of a crime involving
        theft, fraud, dishonesty or moral turpitude;

      

      (ii)
        violation by
        Executive of the Company's Code of Conduct or other material
        policies;

      

      (iii)
        gross
        omission or gross dereliction of any statutory, common law or other duty
        of
        loyalty to the company or any of its affiliates; or

      

      (iv)
        repeated
        failure to carry out the duties of Executive's position despite specific
        instructions to do so.

      
        
           

        

        
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      Executive
        shall not
        be deemed to have been terminated for “Cause” until there shall have been
        delivered to him written notice, not less than ten (10) days prior to the
        proposed termination date, specifying the basis for such
        termination.

      

       

      For
        purposes of
        this Agreement, Good Reason shall mean any one of the following events which
        occurs without Executive's written consent: (i) any significant diminution
        in Executive's title, authority or responsibility, including any change in
        the
        reporting relationship between Executive and the CEO; (ii) any significant
        reduction in Executive's then current total compensation from that compensation
        paid in the prior fiscal year or calendar year; or (iii) a change of more
        than fifty (50) miles from Executive's permanent workplace without
        Executive's consent. 

       

      

              10.  Parachute
        Payments.
        If any cash
        compensation payment, employee benefits or acceleration of vesting of stock
        options or other stock awards Executive would receive in connection with
        a
        Change in Control ("Payment") would (i) constitute a "parachute payment"
        within the meaning of Section 280G of the Internal Revenue Code of 1986, as
        amended (the "Code"), and (ii) but for this sentence, be subject to the
        excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then
        such Payment shall be equal to the Reduced Amount. The "Reduced Amount" shall
        be
        either (x) the largest portion of the Payment that would result in no
        portion of the Payment being subject to the Excise Tax or (y) the largest
        portion, up to and including the total, of the Payment, whichever amount,
        after
        taking into account all applicable federal, state and local employment taxes,
        income taxes, and the Excise Tax (all computed at the highest applicable
        marginal rate), results in Executive's receipt, on an after-tax basis, of
        the
        greater amount of the Payment notwithstanding that all or some portion of
        the
        Payment may be subject to the Excise Tax. If a reduction in payments or benefits
        constituting "parachute payments" is necessary so that the Payment equals
        the
        Reduced Amount, reduction shall occur in the following order unless Executive
        elects in writing a different order: reduction of cash payments; reduction
        of
        employee benefits; and cancellation of accelerated vesting of stock awards.
        In
        the event that acceleration of vesting of stock award compensation is to
        be
        reduced, such acceleration of vesting shall be cancelled in the reverse order
        of
        the date of grant of Executive's stock awards unless Executive elects in
        writing
        a different order for cancellation. The accounting firm engaged by the Company
        for general audit purposes as of the day prior to the effective date of the
        Change in Control shall perform the foregoing calculations. If the accounting
        firm so engaged by the Company is serving as accountant or auditor for the
        individual, entity or group effecting the Change in Control, the Company
        shall
        appoint a nationally recognized accounting firm to make the determinations
        required hereunder. The Company shall bear all expenses with respect to the
        determinations by such accounting firm required to be made hereunder. The
        accounting firm engaged to make the determinations hereunder shall provide
        its
        calculations, together with detailed supporting documentation, to the Company
        and Executive within fifteen (15) calendar days after the date on which
        Executive's right to a Payment arises (if requested at that time by the Company
        or Executive) or at such other time as requested by the Company or Executive.
        If
        the accounting firm determines that no Excise Tax is payable with respect
        to a
        Payment, either before or after the application of the Reduced Amount, it
        shall
        furnish the Company and Executive with an opinion reasonably acceptable to
        Executive that no Excise Tax will be imposed with respect to such Payment.
        Any
        good faith determination of the accounting firm made hereunder shall be final,
        binding and conclusive upon the Company and Executive. 

      
        
           

        

        
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      11.
        Release.
        Upon termination
        of Executive's employment, unless Executive shall have executed and provided
        the
        Company with an effective release in a form reasonably satisfactory to the
        Company, Executive shall not receive any severance payments or benefits provided
        under this Agreement. 

      

      12.
        Confidentiality.  Executive
        agrees
        that information not generally known to the public to which he will be exposed
        as a result of his employment by the Company is confidential information
        that belongs to the Company. This includes information developed by Executive,
        alone or with others, or entrusted to the Company by its customers or others.
        The Company’s confidential information includes, without limitation, information
        relating to the Company’s trade secrets, research and development, inventions,
        know-how, software, procedures, accounting, marketing, sales, creative and
        marketing strategies, employee salaries and compensation, and the identities
        of
        customers and active prospects to the extent not publicly disclosed
        (collectively, "Confidential Information"). Executive will hold the Company’s
        Confidential Information in strict confidence, and not disclose or use it
        except
        as authorized by the Company and for the Company’s benefit.

      

      Executive
        further
        acknowledges and agrees that in order to enable the Company to perform services
        for its customers or clients, such customers or clients may furnish to the
        Company certain Confidential Information, that the goodwill afforded to the
        Company depends upon the Company and its employees preserving the
        confidentiality of such information, and that such information shall be treated
        as Confidential Information of the Company for all purposes under this
        Agreement.

       

      13.
        Non-Competition. Executive
        recognizes and agrees that Internap has many substantial, legitimate business
        interests that can be protected only by his agreement not to compete with
        Internap under certain circumstances. These interests include, without
        limitation and on a national basis, Internap's contacts and relationships
        with
        its clients and active prospects, Internap's reputation and goodwill in the
        industry, and Internap's rights in its Confidential Information. Therefore,
        Executive agrees that during the term of his employment with Internap and
        for a
        period of one (1) year after his employment ends for any reason whatsoever
        and
        except as provided in the paragraph immediately following, he shall not,
        voluntarily or involuntarily, directly or indirectly, on his own behalf or
        on
        the behalf of another, whether as an employee, contractor, consultant, director
        or agent or in another capacity, engage in the businesses of (i) managed
        high
        performance Internet connectivity, (ii) hosting or collocation services,
        (iii)
        virtual private network services (iv) content distribution network services
        or
        (v) any other line of business in which the company is then engaged for (x)
        any
        account that is a customer of Internap or its affiliates unless he is providing
        substantially different services to any such customer from the services he
        provided to Internap or (y) any competitor of Internap or its
        affiliates. 

      

      If,
        within one year
        after commencement of Executive’s employment with the Company, Executive
        voluntarily terminates such employment or such employment is terminated for
        any
        reason by the Company, the non-compete period shall be equal to the number
        of
        days that Executive was an employee of the Company prior to such termination.
        

      

      Executive
        also
        agrees that during the term of his employment with Internap and for a period
        of
        one (1) years after such employment ends for any reason whatsoever, he shall
        

      
        
           

        

        
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      not
        directly or
        indirectly employ or seek to employ any person employed by Internap nor directly
        or indirectly solicit or induce any such person to leave Internap. 

       

      Executive
        acknowledges that the breach or threatened breach of the above noncompetition
        and/or nondisclosure provisions would cause irreparable injury to Internap
        that
        could not be adequately compensated by money damages. Internap may obtain
        a
        restraining order and/or injunction prohibiting my breach or threatened breach
        of the noncompetition and/or nondisclosure provisions, in addition to any
        other
        legal or equitable remedies that may be available. Executive agrees that
        the
        above noncompetition provision, including its duration, scope and geographic
        extent, is fair and reasonably necessary to protect Internap's client
        relationships, goodwill, Confidential Information and other protectable
        interests.  

      

      Provided
        that
        Executive has been employed with the Company for at least one year, if Executive
        wishes to compete with the Company during the one-year period after his
        termination of employment, Executive will submit a bona fide written offer
        of
        employment he has received from a prospective employer to the Company’s Chief
        Executive Officer and General Counsel, who will analyze such proposed employment
        in light of the then current facts and circumstances. The Chief Executive
        Officer may, in his sole and reasonable discretion, provide a written waiver
        of
        all or a portion of the non-compete limitations imposed on Executive. If
        such
        written waiver is unreasonably withheld, Executive shall remain subject to
        the
        non-compete limitations. The non-solicitation obligations set forth above
        are
        not subject to the potential waiver described in the preceding sentence and
        will
        remain in full force and effect pursuant to its terms. Executive will fully
        defend, indemnify and hold harmless the Company for any claims brought against
        it by Executive or third parties as a result of any decision the Company
        makes
        not to waive Executive's non-compete obligations. 

      

      14.
        No
        Restrictions.
        No Restrictions.
        Executive represents to the Company that he has not executed or is not bound
        by
        any non-competition covenant or non-solicitation covenant or any other
        undertaking similar to either of the foregoing that would prevent him from
        performing the duties and responsibilities of the position set forth in Section
        1 of this Agreement.

      

      15.
        General
        Provisions. This
        Agreement is
        intended to bind and inure to the benefit of and be enforceable by Executive,
        the Company and their respective successors, assigns, heirs, executors,
        administrators, except that Executive may not assign any of his duties hereunder
        and Executive may not assign any of his rights hereunder without the written
        consent of the Company, which shall not be withheld unreasonably. 

      

      This
        Agreement,
        together with the Exhibits, constitutes the complete, final and exclusive
        embodiment of the entire agreement between the Parties with regard to the
        subject matter hereof. It is entered into without reliance on any promise
        or
        representation, written or oral, other than those expressly contained herein,
        and it supersedes any other such promises or representations. 

      

      This
        Agreement
        shall be governed by and construed in accordance with the laws of the State
        of
        Delaware, without reference to principles of conflict of laws. The captions
        of
        this Agreement are not part of the provisions hereof and shall have no force
        or
        effect. This Agreement may not be amended or modified otherwise than by a
        written agreement 

      
        
           

        

        
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      executed
        by the
        Parties hereto or their respective successors and legal representatives.
        The
        invalidity or unenforceability of any provision of this Agreement shall not
        affect the validity or enforceability of any other provision of this Agreement.
        Any invalid or unenforceable provision shall be modified so as to be rendered
        valid and enforceable in a manner consistent with the intent of the Parties
        insofar as possible. 

      

      A
        failure of Executive or the Company to insist upon strict compliance with
        any
        provision of this Agreement or the failure to assert any right Executive
        or the
        Company may have hereunder shall not be deemed to be a waiver of such provision
        or right or any other provision or right of this Agreement. 

      

      From
        and after the
        Effective Date, this Agreement shall supersede any employment, severance,
        change
        of control or other agreement, whether oral or written, between the Parties
        with
        respect to the subject matter hereof (other than arrangements effected under
        compensation plans generally applicable to other senior executive officers
        of
        the Company). 

      

      This
        Agreement may
        be executed in several counterparts, each of which shall be deemed to be
        an
        original but all of which together will constitute one and the same instrument.
        

              

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      IN
        WITNESS WHEREOF, the Parties have executed this Agreement effective as of
        the
        day and year first above written. 

      

      

      
        	
                INTERNAP
                  NETWORK SERVICES CORPORATION

              	
                Eric
                  Suddith

              
	 	 
	
                By
                  /s/
                  Gregory A. Peters

              	
                /s/
                  Eric
                  Suddith

              
	
                Name:
                  Gregory
                  A. Peters

              	 
	
                Title:
                  President and CEO

              	 

      

      
 

       

       

       

       

      8Exhibit 10.28

    
      

    

     

    Exhibit
      10.28

     

    

       

      

       

       

      EMPLOYMENT
        AGREEMENT 

       

       

              Employment
        Agreement (this "Agreement") dated as of May 2, 2005 (the "Effective Date"),
        by
        and between Internap Network Services Corporation (the "Company") and Robert
        P.
        Smith II ("Executive") (collectively the "Parties"). 

       

       

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      1.
        Position
        and Duties.
        Effective May 17,
        2005, Executive shall serve as the Chief Marketing Officer and Vice President
        of
        Marketing for the Company, with such duties, authorities and responsibilities
        as
        are commensurate with such position. Executive shall report to the Company's
        Chief Executive Officer (“CEO”) and shall work from the Company's offices in
        Atlanta, Georgia. 

       

       

      2.
        Base
        Salary.
        Executive shall
        receive an annual base salary of $ 200,000 ("Base Salary"). Payment of Base
        Salary shall be subject to standard payroll tax withholdings and deductions.
        Executive's Base Salary shall be paid semi-monthly in accordance with the
        Company's standard payroll practices. Executive's Base Salary may be increased
        or decreased from time to time by the CEO in consultation with the Company's
        Board of Directors or the Compensation Committee of such Board of Directors
        (in
        either case, the "Board") in their sole discretion.

       

       

              3.    Performance-Based
        Bonus.

       

       

      (i)
        Executive shall
        be eligible to receive a performance bonus (“Performance Bonus”) for achieving
        key marketing objectives during the third and fourth quarters of 2005. The
        Executive’s Performance Bonus target for each quarter shall be $20,000 and
        objectives established on or before the start of each quarter. The CEO, in
        his
        sole and reasonable discretion, shall determine, whether a Performance Bonus
        is
        payable and, if so, the amount of such Bonus.

       

       

      (ii)
        Executive
        shall participate in the Company’s Annual Incentive Plan (“Bonus”) for Executive
        and other senior executive officers. The Executive’s Bonus target for 2005 shall
        be 50% of Executive's Base Salary, prorated if less than a full year, depending
        on individual and Company performance metrics. Performance metrics for and
        target amount of the Bonus for 2006 and each subsequent calendar year shall
        be
        established on or before March 31 of the year to which the Bonus relates.
        The
        CEO, in consultation with the Board and in their sole and reasonable discretion,
        shall determine, on or before March 31 of the year in which the Bonus would
        be
        payable, whether a Bonus is payable and, if so, the amount of such Bonus.
        Unless
        otherwise determined by the Board, all Bonus payments shall be made on the
        Company's first regular payroll date following such determination and shall
        be
        subject to standard payroll tax withholdings and deductions. To be eligible
        for
        a Bonus, Executive must be continuously employed by the Company through the
        date
        on which the Bonus is paid. Executive recognizes and agrees that: (a) the
        Company may in its sole discretion and with reasonable notice to Executive
        determine that any Bonus, if payable, may be paid in whole or in part in
        the
        Company’s common stock or other equity securities, including restricted stock
        and stock options; and (b) the Company may in its sole discretion suspend
        or
        discontinue any bonus program at any time without any liability on the part
        of
        the Company.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

            
        4.    Equity Compensation.
        The Company and
        Executive acknowledge that the Company will issue to Executive an option
        to
        purchase 500,000 shares of the Company’s common stock, subject to the terms and
        conditions of the relevant option plan(s) and related stock option agreement(s)
        (the "Options") no later than May 31, 2005. The Board, upon the recommendation
        of the CEO and in their sole discretion, may award additional options or
        equity
        or other equity-based compensation to Executive on terms, in amounts and
        subject
        to performance goals as determined by the CEO and the Board (any such options
        also being referred to hereinafter as “Options” and any such equity or
        equity-based compensation being referred to herein as “Additional Equity
        Compensation”).

       

       

              5.    Employee
        Benefits. Executive
        shall be
        entitled to participate in all employee benefit, welfare and other plans
        and
        programs generally applicable to employees of the Company. Except as provided
        herein, the Company reserves the right to modify Executive's compensation
        and
        benefits from time to time, as it deems necessary

       

       

      6.  
        Vacation.
        Executive shall
        accrue twenty (20) days of combined vacation/sick leave annually. Executive
        also
        shall receive three (3) personal days each year. Executive shall have the
        right to carry over unused vacation from any one-year period to any other
        subsequent one-year period.   

       

       

      7. 
        Nature of
        Employment.
        Executive's
        employment with the Company shall be at-will. Both Executive and the Company
        shall have the right to terminate the employment relationship at any time,
        with
        or without cause, and with or without advance notice. 

       

       

      8.  
        Severance Payments. Upon
        Executive's
        involuntary termination by the Company of employment without Cause (as defined
        below), Executive shall receive a cash severance payment equal to the product
        of
        (x) the number of days that Executive is an employee of the Company, divided
        by
        365 (provided that the foregoing ratio shall never exceed one (1) and (y)
        Executive’s then-current Base Salary. Payment of such severance amounts shall be
        subject to standard payroll tax withholdings and deductions. In
        addition to the
        severance benefits provided above, upon Executive's involuntary termination
        of
        employment without Cause, all of Executive’s unvested Options and Additional
        Equity Compensation shall lapse and expire, and all of Executive’s vested
        Options shall remain exercisable no later than three months after the date
        of
        termination. No payment or acceleration of Options or Additional Equity
        Compensation shall be made pursuant to this Section 8 unless prior to or
        concurrent with such payment a valid release has been executed and delivered
        by
        Executive and becomes effective in accordance with Section 11 hereof.
        Notwithstanding the immediately preceding sentence, Executive shall not be
        entitled to any benefits or rights under this Section 8 if Executive also
        is eligible for payments and/or benefits under Section 9 hereof.

       

       

      9.  
        Change in Control Payments and Acceleration.
        Upon Executive's
        involuntary termination of employment without Cause (as defined below) or
        voluntary termination of employment for Good Reason, in either case within
        12
        months after
        a Change in
        Control, (i) the Company shall pay Executive a cash severance payment equal
        to
        two time the sum of Executive's then-current Base Salary and maximum target
        Bonus and (ii) all of Executive’s unvested Options and Additional Equity
        Compensation shall become vested, free of restrictions and immediately
        exercisable for the remaining term of the relevant grant or award.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      Payment
        of such
        severance payments shall be subject to standard payroll tax withholdings
        and
        deductions. 

       

       

      No
        payment or acceleration of Options or Additional Equity Compensation shall
        be
        made unless prior to or concurrent with such payment a valid release has
        been
        executed and delivered by Executive and becomes effective in accordance with
        Section 11 hereof. 

       

       

      Executive
        will
        continue to receive the healthcare and life insurance coverages in effect
        on his
        date of termination for twenty-four (24) months after the date of termination
        pursuant to this Section 9 just as if he had remained an active employee
        of the
        Company, subject to Executive paying the customary employee portion of such
        coverages, provided that if the Company cannot continue to cover Executive
        under
        its plans, the Company will separately provide Executive with comparable
        coverages or pay Executive in a lump sum the costs of such
        coverages.

       

      For
        purposes of
        this Agreement, "Change in Control” shall mean the happening of any of the
        following events:

      

      (i) 
        An acquisition by
        any individual, entity or group (within the meaning of Section 13 (d) (3)
        or 14
        (d) (2) of the Exchange Act) (an "Entity") of beneficial ownership (within
        the
        meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more
        of
        either (A) the then outstanding shares of common stock of the Company (the
        "Outstanding Company Common Stock") or (B) the combined voting power of the
        then
        outstanding voting securities of the Company entitled to vote generally in
        the
        election of directors (the "Outstanding Company Voting Securities"); excluding,
        however, the following: (1) 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,
        (2) any acquisition by the Company, (3) any acquisition by any employee benefit
        plan (or related trust) sponsored or maintained by the Company or any
        corporation controlled by the Company, or (4) any acquisition by any corporation
        pursuant to a transaction which complies with clauses (A), (B) and (C) of
        subsection (iii) of this Section; 

      

      (ii)
        A change in
        the composition of the Board such that the individuals who, as of the Effective
        Date, constitute the Board (such Board shall be hereinafter referred to as
        the
        "Incumbent Board"), excluding the current members of the Board (“Series A
        Directors”) who have been elected pursuant to the terms of the Company’s Series
        A Convertible Preferred Stock (“Series A Stock”), 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 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), excluding
        the
        Series A Directors, 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 Exchange 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;

      

      (iii)
        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 (A) all or substantially all of the
        individuals and entities who are the beneficial owners, respectively, of
        the
        Outstanding Company Common Stock and Outstanding Company 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 corporation or other Person which as a result of such transaction
        owns the Company or all or substantially all of the Company's assets either
        directly or through one or more subsidiaries (a "Parent Company")) in
        substantially the same proportions as their ownership, immediately prior
        to such
        Corporate Transaction, of the Outstanding Company Common Stock and Outstanding
        Company Voting Securities, as the case may be, (B) 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 Company for purposes of determining whether
        clause (A) above is satisfied in connection with the applicable Corporate
        Transaction, such Parent Company) 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 (C) 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 Company for purposes of determining whether clause (A) above
        is
        satisfied in connection with the applicable Corporate Transaction, of the
        Parent
        Company); or 

      

      (iv)
        The approval
        by the stockholders of the Company of a complete liquidation or dissolution
        of
        the Company.

      

      For
        purposes of
        this Agreement, “Cause” shall mean:

      

      (i)
        Executive's
        conviction (including a plea of guilty or nolo contendere) of a crime involving
        theft, fraud, dishonesty or moral turpitude;

      

      (ii)
        violation by
        Executive of the Company's Code of Conduct or other material written
        policies;

      

      (iii)
        gross
        omission or gross dereliction of any statutory, common law or other duty
        of
        loyalty to the company or any of its affiliates; or

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      

      (iv)
        repeated
        failure to carry out the duties of Executive's position despite specific
        instructions to do so.

      

      Executive
        shall not
        be deemed to have been terminated for “Cause” until there shall have been
        delivered to him written notice, not less than ten (10) days prior to the
        proposed termination date, specifying the basis for such
        termination.

      

       

      For
        purposes of
        this Agreement, Good Reason shall mean any one of the following events which
        occurs without Executive's written consent: (i) any significant diminution
        in Executive's title, authority or responsibility, including any change in
        the
        reporting relationship between Executive and the CEO; (ii) any significant
        reduction in Executive's then current total compensation from that compensation
        paid in the prior fiscal year or calendar year; or (iii) a change of more
        than fifty (50) miles from Executive's permanent workplace without
        Executive's consent. 

       

      

              10.  Parachute
        Payments.
        If any cash
        compensation payment, employee benefits or acceleration of vesting of stock
        options or other stock awards Executive would receive in connection with
        a
        Change in Control ("Payment") would (i) constitute a "parachute payment"
        within the meaning of Section 280G of the Internal Revenue Code of 1986, as
        amended (the "Code"), and (ii) but for this sentence, be subject to the
        excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then
        such Payment shall be equal to the Reduced Amount. The "Reduced Amount" shall
        be
        either (x) the largest portion of the Payment that would result in no
        portion of the Payment being subject to the Excise Tax or (y) the largest
        portion, up to and including the total, of the Payment, whichever amount,
        after
        taking into account all applicable federal, state and local employment taxes,
        income taxes, and the Excise Tax (all computed at the highest applicable
        marginal rate), results in Executive's receipt, on an after-tax basis, of
        the
        greater amount of the Payment notwithstanding that all or some portion of
        the
        Payment may be subject to the Excise Tax. If a reduction in payments or benefits
        constituting "parachute payments" is necessary so that the Payment equals
        the
        Reduced Amount, reduction shall occur in the following order unless Executive
        elects in writing a different order: reduction of cash payments; reduction
        of
        employee benefits; and cancellation of accelerated vesting of stock awards.
        In
        the event that acceleration of vesting of stock award compensation is to
        be
        reduced, such acceleration of vesting shall be cancelled in the reverse order
        of
        the date of grant of Executive's stock awards unless Executive elects in
        writing
        a different order for cancellation. The accounting firm engaged by the Company
        for general audit purposes as of the day prior to the effective date of the
        Change in Control shall perform the foregoing calculations. If the accounting
        firm so engaged by the Company is serving as accountant or auditor for the
        individual, entity or group effecting the Change in Control, the Company
        shall
        appoint a nationally recognized accounting firm to make the determinations
        required hereunder. The Company shall bear all expenses with respect to the
        determinations by such accounting firm required to be made hereunder. The
        accounting firm engaged to make the determinations hereunder shall provide
        its
        calculations, together with detailed supporting documentation, to the Company
        and Executive within fifteen (15) calendar days after the date on which
        Executive's right to a Payment arises (if requested at that time by the Company
        or Executive) or at such other time as requested by the Company or Executive.
        If
        the accounting firm determines that no Excise Tax is payable with respect
        to a
        Payment, either before or after the application of the Reduced Amount, it
        shall

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      furnish
        the Company
        and Executive with an opinion reasonably acceptable to Executive that no
        Excise
        Tax will be imposed with respect to such Payment. Any good faith determination
        of the accounting firm made hereunder shall be final, binding and conclusive
        upon the Company and Executive. 

      

      11.  
        Release.
        Upon termination
        of Executive's employment, unless Executive shall have executed and provided
        the
        Company with an effective release in a form reasonably satisfactory to the
        Company, Executive shall not receive any severance payments or benefits provided
        under this Agreement. 

      

      12.  
        Confidentiality.  Executive
        agrees
        that information not generally known to the public to which he will be exposed
        as a result of his employment by the Company is confidential information
        that
        belongs to the Company. This includes information developed by Executive,
        alone
        or with others, or entrusted to the Company by its customers or others. The
        Company’s confidential information includes, without limitation, information
        relating to the Company’s trade secrets, research and development, inventions,
        know-how, software, procedures, accounting, marketing, sales, creative and
        marketing strategies, employee salaries and compensation, and the identities
        of
        customers and active prospects to the extent not publicly disclosed
        (collectively, "Confidential Information"). Executive will hold the Company’s
        Confidential Information in strict confidence, and not disclose or use it
        except
        as authorized by the Company and for the Company’s benefit.

      

      Executive
        further
        acknowledges and agrees that in order to enable the Company to perform services
        for its customers or clients, such customers or clients may furnish to the
        Company certain Confidential Information, that the goodwill afforded to the
        Company depends upon the Company and its employees preserving the
        confidentiality of such information, and that such information shall be treated
        as Confidential Information of the Company for all purposes under this
        Agreement.

       

      13.
        Non-Competition. Executive
        recognizes and agrees that Internap has many substantial, legitimate business
        interests that can be protected only by his agreement not to compete with
        Internap under certain circumstances. These interests include, without
        limitation and on a national basis, Internap's contacts and relationships
        with
        its clients and active prospects, Internap's reputation and goodwill in the
        industry, and Internap's rights in its Confidential Information. Therefore,
        Executive agrees that during the term of his employment with Internap and
        for a
        period of one (1) year after his employment ends for any reason whatsoever
        and
        except as provided in the paragraph immediately following, he shall not,
        voluntarily or involuntarily, directly or indirectly, on his own behalf or
        on
        the behalf of another, whether as an employee, contractor, consultant, director
        or agent or in another capacity, engage in the businesses of (i) managed
        high
        performance Internet connectivity, (ii) hosting or collocation services,
        (iii)
        virtual private network services (iv) content distribution network services
        or
        (v) any other line of business in which the company is then engaged for (x)
        any
        account that is a customer of Internap or its affiliates unless he is providing
        substantially different services to any such customer from the services he
        provided to Internap or (y) any competitor of Internap or its
        affiliates. 

      

      If,
        within one year
        after commencement of Executive’s employment with the Company, Executive
        voluntarily terminates such employment or such employment is terminated for
        any
        reason by the Company, the non-compete period shall be equal to the number
        of
        days that Executive was an employee of the Company prior to such termination.
        

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      

      

      Executive
        also
        agrees that during the term of his employment with Internap and for a period
        of
        one (1) years after such employment ends for any reason whatsoever, he shall
        not
        directly or indirectly employ or seek to employ any person employed by Internap
        nor directly or indirectly solicit or induce any such person to leave Internap.
        

       

      Executive
        acknowledges that the breach or threatened breach of the above noncompetition
        and/or nondisclosure provisions would cause irreparable injury to Internap
        that
        could not be adequately compensated by money damages. Internap may obtain
        a
        restraining order and/or injunction prohibiting my breach or threatened breach
        of the noncompetition and/or nondisclosure provisions, in addition to any
        other
        legal or equitable remedies that may be available. Executive agrees that
        the
        above noncompetition provision, including its duration, scope and geographic
        extent, is fair and reasonably necessary to protect Internap's client
        relationships, goodwill, Confidential Information and other protectable
        interests.  

      

      Provided
        that
        Executive has been employed with the Company for at least one year, if Executive
        wishes to compete with the Company during the one-year period after his
        termination of employment, Executive will submit a bona fide written offer
        of
        employment he has received from a prospective employer to the Company’s Chief
        Executive Officer and General Counsel, who will analyze such proposed employment
        in light of the then current facts and circumstances. The Chief Executive
        Officer may, in his sole and reasonable discretion, provide a written waiver
        of
        all or a portion of the non-compete limitations imposed on Executive. If
        such
        written waiver is unreasonably withheld, Executive shall remain subject to
        the
        non-compete limitations. The non-solicitation obligations set forth above
        are
        not subject to the potential waiver described in the preceding sentence and
        will
        remain in full force and effect pursuant to its terms. Executive will fully
        defend, indemnify and hold harmless the Company for any claims brought against
        it by Executive or third parties as a result of any decision the Company
        makes
        not to waive Executive's non-compete obligations. 

      

      14.
        No
        Restrictions.
        No Restrictions.
        Executive represents to the Company that he has not executed or is not bound
        by
        any non-competition covenant or non-solicitation covenant or any other
        undertaking similar to either of the foregoing that would prevent him from
        performing the duties and responsibilities of the position set forth in Section
        1 of this Agreement.

      

      15.
        General
        Provisions. This
        Agreement is
        intended to bind and inure to the benefit of and be enforceable by Executive,
        the Company and their respective successors, assigns, heirs, executors,
        administrators, except that Executive may not assign any of his duties hereunder
        and Executive may not assign any of his rights hereunder without the written
        consent of the Company, which shall not be withheld unreasonably. 

      

      This
        Agreement,
        together with the Exhibits, constitutes the complete, final and exclusive
        embodiment of the entire agreement between the Parties with regard to the
        subject matter hereof. It is entered into without reliance on any promise
        or
        representation, written or oral, other than those expressly contained herein,
        and it supersedes any other such promises or representations. 

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      

      This
        Agreement
        shall be governed by and construed in accordance with the laws of the State
        of
        Delaware, without reference to principles of conflict of laws. The captions
        of
        this Agreement are not part of the provisions hereof and shall have no force
        or
        effect. This Agreement may not be amended or modified otherwise than by a
        written agreement executed by the Parties hereto or their respective successors
        and legal representatives. The invalidity or unenforceability of any provision
        of this Agreement shall not affect the validity or enforceability of any
        other
        provision of this Agreement. Any invalid or unenforceable provision shall
        be
        modified so as to be rendered valid and enforceable in a manner consistent
        with
        the intent of the Parties insofar as possible. 

      

      A
        failure of Executive or the Company to insist upon strict compliance with
        any
        provision of this Agreement or the failure to assert any right Executive
        or the
        Company may have hereunder shall not be deemed to be a waiver of such provision
        or right or any other provision or right of this Agreement. 

      

      From
        and after the
        Effective Date, this Agreement shall supersede any employment, severance,
        change
        of control or other agreement, whether oral or written, between the Parties
        with
        respect to the subject matter hereof (other than arrangements effected under
        compensation plans generally applicable to other senior executive officers
        of
        the Company). 

      

      This
        Agreement may
        be executed in several counterparts, each of which shall be deemed to be
        an
        original but all of which together will constitute one and the same instrument.
        

              

      -
        - - - - - - - - -
        - - - - - - - - - - - - -

      

      IN
        WITNESS WHEREOF, the Parties have executed this Agreement effective as of
        the
        day and year first above written. 

      

      

      
        	
                INTERNAP
                  NETWORK SERVICES CORPORATION

              	
                ROBERT
                  P. SMITH II

              
	 	 
	
                By
                  /s/ David
                  H. King

              	
                /s/
                  Robert
                  Smith 

              
	 	 
	
                David
                  H.
                  King

              	 
	
                Sr.
                  Director
                  Human Resources

              	 

      

       

       

       

       

       

      7

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