Document:

Exhibit 10.1

    
      

    

     

    Exhibit
      10.1

     

    

    

    

    

    

    

    

    

    

    

    

    

    

    AMENDED
      AND RESTATED

    

    INTERNAP
      NETWORK SERVICES CORPORATION

    

    2005
      INCENTIVE STOCK PLAN

    

    

    (amended
      and restated as of March 15, 2006)

     

     

     

     

     

     

     

     

     

     

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    TABLE
      OF
      CONTENTS

    

    

    
      	 	
              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

            

    

    

    
      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

    

    

    

    
      	
              §
                4. EFFECTIVE DATE

            	
              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

            

    

    

    
      
        
          
          

        

        
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              16.5

            	
              Other
                Conditions

            	
              34

            
	
              16.6

            	
              Rule
                16b-3

            	
              34

            
	
              16.7

            	
              Coordination
                with Employment Agreements and Other Agreements

            	
              34

            

    

    

    

    

    

     

     

     

     

     

     

     

     

    

    
      
        
          
          

        

        
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    § 1.

    BACKGROUND
      AND PURPOSE

    The
      purpose of this Plan is to promote the interest of the Company by authorizing
      the Committee to grant Options and Stock Appreciation Rights and to make Stock
      Grants and Stock Unit Grants to Eligible Employees and Directors in order
      (1) to attract and retain Eligible Employees and Directors, (2) to
      provide an additional incentive to each Eligible Employee or Director to work
      to
      increase the value of Stock and (3) to provide each Eligible Employee or
      Director with a stake in the future of the Company which corresponds to the
      stake of each of the Company’s shareholders.

    § 2.

    DEFINITIONS

    2.1    Affiliate
      -- means
      any organization (other than a Subsidiary) that would be treated as under common
      control with the Company under § 414(c) of the Code if “50 percent” were
      substituted for “80 percent” in the income tax regulations under § 414(c)
      of the Code.

    2.2    Board
      -- means
      the Board of Directors of the Company.

    2.3    Change
      Effective Date
      -- means
      either the date which includes the “closing” of the transaction which makes a
      Change in Control effective if the Change in Control is made effective through
      a
      transaction which has a “closing” or the date a Change in Control is reported in
      accordance with applicable law as effective to the Securities and Exchange
      Commission if the Change in Control is made effective other than through a
      transaction which has a “closing”.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    2.4     Change
      in Control
      --
means
      the
      happening of any of the following events: 

    
      	 	
              (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”),
                

            

    

    

    
      
        
          
          

        

        
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    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 

            

    

    

    
      
        
          
          

        

        
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    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

     

     

     

    

    
      
        
          
          

        

        
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    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. 

            

    

    

    2.5    Code
      -- means
      the Internal Revenue Code of 1986, as amended.

    2.6    Committee
      --
means
      the
      Compensation Committee of the Board which shall have at least 2 members, each
      of
      whom shall be appointed by and shall serve at the pleasure of the Board and
      shall come within the definition of a “non-employee director” under Rule 16b-3
      and an “outside director” under § 162(m) of the Code.

    

    
      
        
          
          

        

        
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    2.7    Company
      -- means
      Internap Network Services Corporation and any successor to Internap Network
      Services Corporation.

    2.8    Director
      -- means
      any member of the Board who is not an employee of the Company or a Parent or
      Subsidiary or affiliate (as such term is defined in Rule 405 of the 1933 Act)
      of
      the Company.

    2.9    Eligible
      Employee
      -- means
      an employee of the Company or any Subsidiary or Parent or Affiliate to whom
      the
      Committee decides for reasons sufficient to the Committee to make a grant under
      this Plan.

    2.10        
      Fair
      Market Value
      -- means
      either (a) the closing price on any date for a share of Stock as reported
      by The
      Wall Street Journal
      or, if
The
      Wall Street Journal
      no
      longer reports such closing price, such closing price as reported by a newspaper
      or trade journal selected by the Committee or, if no such closing price is
      available on such date, (b) such closing price as so reported in accordance
      with § 2.10(a) for the immediately preceding business day, or, if no
      newspaper or trade journal reports such closing price or if no such price
      quotation is available, (c) the price which the Committee acting in good
      faith determines through any reasonable valuation method that a share of Stock
      might change hands between a willing buyer and a willing seller, neither being
      under any compulsion to buy or to sell and both having reasonable knowledge
      of
      the relevant facts or, (d) in the discretion of the Committee, any stock
      valuation method which complies with the requirements of Section 409A or Section
      422 of the Code, as applicable, based on the provisions of such statutory
      provision and any formal guidance issued by the Internal Revenue
      Service.

    

    
      
        
          
          

        

        
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    2.11    ISO
      -- means
      an option granted under this Plan to purchase Stock which is intended to satisfy
      the requirements of § 422 of the Code.

    2.12    1933
      Act --
      means
      the Securities Act of 1933, as amended.

    2.13    1934
      Act
      -- means
      the Securities Exchange Act of 1934, as amended.

    2.14    Non-ISO
      -- means
      an option granted under this Plan to purchase Stock which is intended to fail
      to
      satisfy the requirements of § 422 of the Code.

    2.15    Option
      -- means
      an ISO or a Non-ISO which is granted under § 7.

    2.16    Option
      Certificate
      -- means
      the certificate (whether in electronic or written form) which sets forth the
      terms and conditions of an Option granted under this Plan.

    2.17    Option
      Price
      -- means
      the price which shall be paid to purchase one share of Stock upon the exercise
      of an Option granted under this Plan.

    2.18    Parent
      -- means
      any corporation which is a parent corporation (within the meaning of
§ 424(e) of the Code) of the Company.

    2.19    Plan
      -- means
      this Internap Network Services Corporation 2005 Incentive Stock Plan as
      effective as of the date approved by the shareholders of the Company and as
      amended from time to time thereafter.

    2.20    Preexisting
      Plan
      -- means
      each of the following plans, as each such plan has been amended from time to
      time up to the date this Plan is effective (a) Switchsoft Systems, Inc.
      Founders 1996 Stock Option Plan, (b) Internap Network Services Corporation
      2002
      Stock Compensation Plan, (c) Amended 1999 Equity 

    

    
      
        
          
          

        

        
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    Incentive
      Plan, (d) 1999 Stock Incentive Plan for Non-Officers, (e) Amended and Restated
      1998 Stock Option/Stock Issuance Plan, and (f) the Switchsoft Systems, Inc.
      1997
      Stock Option Plan.

    2.21    Rule
      16b-3
      -- means
      the exemption under Rule 16b-3 to Section 16(b) of the 1934 Act or any
      successor to such rule.

    2.22    SAR
      Value
      -- means
      the value assigned by the Committee to a share of Stock in connection with
      the
      grant of a Stock Appreciation Right under § 8.

    2.23    Stock
      -- means
      the common stock of the Company.

    2.24    Stock
      Appreciation Right
      -- means
      a right which is granted under § 8 to receive the appreciation in a share of
      Stock.

    2.25    Stock
      Appreciation Right Certificate
      -- means
      the certificate (whether in electronic or written form) which sets forth the
      terms and conditions of a Stock Appreciation Right which is not granted as
      part
      of an Option.

    2.26    Stock
      Grant
      -- means
      a grant under § 9 which is designed to result in the issuance of the number
      of shares of Stock described in such grant rather than a payment in cash based
      on the Fair Market Value of such shares of Stock.

    2.27    Stock
      Grant Certificate
      -- means
      the certificate (whether in electronic or written form) which sets forth the
      terms and conditions of a Stock Grant or a Stock Unit Grant.

    2.28    Stock
      Unit Grant
      -- means
      a grant under § 9 which is designed to result in the payment of cash based
      on the Fair Market Value of the number of shares of

    

    
      
        
          
          

        

        
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    Stock
      described in such grant rather than the issuance of the number of shares of
      Stock described in such grant.

    2.29    Subsidiary
      -- means
      a corporation which is a subsidiary corporation (within the meaning of
§ 424(f) of the Code) of the Company.

    2.30    Ten
      Percent Shareholder
      -- means
      a person who owns (after taking into account the attribution rules of
§ 424(d) of the Code) more than ten percent of the total combined voting
      power of all classes of stock of either the Company, a Subsidiary or
      Parent.

    § 3.
      

    SHARES
      AND GRANT LIMITS

    3.1    Shares
      Reserved.
      There
      shall (subject to § 13) be reserved for issuance under this Plan (a)
      20,000,000 shares of Stock plus (b) the number of shares of Stock which remained
      available for issuance under each Preexisting Plan (including any shares with
      respect to which options or other awards have been granted if the shares
      underlying such options or other awards have not been issued as of the effective
      date of this Plan); provided, however, (c) no more than the number of shares
      of
      Stock described in § 3.1(a) shall be issued in connection with the exercise
      of ISOs.

    3.2    Source
      of Shares.
      The
      shares of Stock described in § 3.1 shall be reserved to the extent that the
      Company deems appropriate from authorized but unissued shares of Stock and
      from
      shares of Stock which have been reacquired by the Company. All shares of Stock
      described in § 3.1 shall remain available for issuance under this Plan
      until issued pursuant to the exercise of an Option or a Stock 

    

    
      
        
          
          

        

        
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    Appreciation
      Right or issued pursuant to a Stock Grant, and any such shares of stock which
      are issued pursuant to an Option, a Stock Appreciation Right or a Stock Grant
      which are forfeited thereafter shall again become available for issuance under
      this Plan. Finally, if the Option Price under an Option is paid in whole or
      in
      part in shares of Stock or if shares of Stock are tendered to the Company in
      satisfaction of any condition to a Stock Grant, such shares thereafter shall
      become available for issuance under this Plan and shall be treated the same
      as
      any other shares available for issuance under this Plan. 

    3.3    Use
      of
      Proceeds.
      The
      proceeds which the Company receives from the sale of any shares of Stock under
      this Plan shall be used for general corporate purposes and shall be added to
      the
      general funds of the Company.

    3.4    Grant
      Limits.
      No
      Eligible Employee or Director in any calendar year shall be granted an Option
      to
      purchase (subject to § 13) more than 1,400,000 shares of Stock or a Stock
      Appreciation Right based on the appreciation with respect to (subject to
§ 13) more than 1,400,000 shares of Stock, and no Stock Grant or Stock Unit
      Grant shall be made to any Eligible Employee or Director in any calendar year
      where the Fair Market Value of the Stock subject to such grant on the date
      of
      the grant exceeds $3,000,000. No more than 700,000 non-forfeitable shares of
      Stock shall (subject to § 13) be issued pursuant to Stock Grants under
§ 9.

    3.5    Preexisting
      Plan.
      No
      grants shall be made under any Preexisting Plan on or after the date this Plan
      becomes effective, but the terms of any grant made under a Preexisting Plan
      prior to the date this Plan becomes effective shall be 

    

    
      
        
          
          

        

        
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    interpreted
      under the terms of the Preexisting Plan under which such grant was made and
      not
      under this Plan. Each Preexisting Plan is hereby made a part of this Plan so
      that the shares available for issuance under this Plan may be issued in
      connection with grants made under any Preexisting Plan.

    § 4.
      

    EFFECTIVE
      DATE

    The
      effective date of this Plan shall be the date the shareholders of the Company
      (acting at a duly called meeting of such shareholders) approve the adoption
      of
      this Plan. 

    § 5.

    COMMITTEE

    This
      Plan
      shall be administered by the Committee. The Committee acting in its absolute
      discretion shall exercise such powers and take such action as expressly called
      for under this Plan and, further, the Committee shall have the power to
      interpret this Plan and (subject to § 14 and § 15 and Rule 16b-3) to
      take such other action in the administration and operation of this Plan as
      the
      Committee deems equitable under the circumstances, which action shall be binding
      on the Company, on each affected Eligible Employee or Director and on each
      other
      person directly or indirectly affected by such action. Furthermore, the
      Committee as a condition to making any grant under this Plan to any Eligible
      Employee or Director shall have the right to require him or her to execute
      an
      agreement which makes the Eligible Employee or Director subject to
      non-

    

    
      
        
          
          

        

        
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    competition
      provisions and other restrictive covenants which run in favor of the
      Company.

    § 6.

    ELIGIBILITY

    Only
      Eligible Employees who are employed by the Company or a Subsidiary or Parent
      shall be eligible for the grant of ISOs under this Plan. All Eligible Employees
      and all Directors shall be eligible for the grant of Non-ISOs and Stock
      Appreciation Rights and for Stock Grants and Stock Unit Grants under this Plan.
      

    § 7.

    OPTIONS

    7.1    Committee
      Action.
      The
      Committee acting in its absolute discretion shall have the right to grant
      Options to Eligible Employees and to Directors under this Plan from time to
      time
      to purchase shares of Stock, but the Committee shall not (subject to § 13)
      take any action, whether through amendment, cancellation, replacement grants,
      or
      any other means, to reduce the Option Price of any outstanding Options absent
      the approval of the Company’s shareholders. The Committee may appoint a delegate
      and authorize such delegate to make grants of Options to Eligible Employees
      who
      are not “insiders” within the meaning of rule 16b-3 or “covered employees” under
§ 162(m) of the Code. Each grant of an Option to an Eligible Employee or
      Director shall be evidenced by an Option Certificate, and each Option
      Certificate shall set forth whether the Option is an ISO or a Non-ISO and shall
      set forth such other terms and conditions of such grant as the Committee acting
      in its absolute discretion deems consistent with the 

    

    
      
        
          
          

        

        
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    terms
      of
      this Plan; however, (a) if the Committee grants an ISO and a Non-ISO to an
      Eligible Employee on the same date, the right of the Eligible Employee to
      exercise the ISO shall not be conditioned on his or her failure to exercise
      the
      Non-ISO
      and (b)
      if the only condition to exercise of the Option 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 Option is granted unless the Committee
      determines that a shorter period of service (or no period of service) better
      serves the Company’s interest.

    7.2    $100,000
      Limit.
      No
      Option shall be treated as an ISO to the extent that the aggregate Fair Market
      Value of the Stock subject to the Option which would first become exercisable
      in
      any calendar year exceeds $100,000. Any such excess shall instead automatically
      be treated as a Non-ISO. The Committee shall interpret and administer the ISO
      limitation set forth in this § 7.2 in accordance with § 422(d) of the
      Code, and the Committee shall treat this § 7.2 as in effect only for those
      periods for which § 422(d) of the Code is in effect.

    7.3    Option
      Price.
      The
      Option Price for each share of Stock subject to an Option shall be no less
      than
      the Fair Market Value of a share of Stock on the date the Option is granted;
      provided, however, if the Option is an ISO granted to an Eligible Employee
      who
      is a Ten Percent Shareholder, the Option Price for each share of Stock subject
      to such ISO shall be no less than 110% of the Fair Market Value of a share
      of
      Stock on the date such ISO is granted.

    7.4    Payment.
      The
      Option Price shall be payable in full upon the exercise of any Option and,
      at
      the discretion of the Committee, an Option Certificate can 

    

    
      
        
          
          

        

        
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    provide
      for the payment of the Option Price either in cash, by check or in Stock which
      has been held for at least 6 months and which is acceptable to the Committee,
      or
      through any cashless exercise procedure which is effected by an unrelated broker
      through a sale of Stock in the open market and which is acceptable to the
      Committee, or in any combination of such forms of payment. Any payment made
      in
      Stock shall be treated as equal to the Fair Market Value of such Stock on the
      date the certificate for such Stock (or proper evidence of such certificate)
      is
      presented to the Committee or its delegate in such form as acceptable to the
      Committee.

    7.5    Exercise.
      

    
      	 	
              (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
                

            

    

    

    
      
        
          
          

        

        
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    Eligible
      Employee who is not a Ten Percent Shareholder on the date the Option is granted.
      

    
      	 	
              (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.

            

    

    § 8.

    STOCK
      APPRECIATION RIGHTS

    8.1    Committee
      Action.
      The
      Committee acting in its absolute discretion shall have the right to grant Stock
      Appreciation Rights to Eligible Employees and to Directors under this Plan
      from
      time to time. The Committee may appoint a delegate and authorize such delegate
      to make grants of Stock Appreciation Rights to Eligible Employees who are not
      “insiders” within the meaning of rule 16b-3 or “covered employees” under
§ 162(m) of the Code. Each Stock Appreciation Right grant shall be
      evidenced by a Stock Appreciation Right Certificate or, if such Stock
      Appreciation Right is granted as part of an Option, shall be evidenced by the
      Option Certificate for the related Option.

    8.2    Terms
      and Conditions. 

    
      	 	
              (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 

            

    

    

    
      
        
          
          

        

        
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    such
      certificate shall set forth the number of shares of Stock on which the Eligible
      Employee’s or Director’s right to appreciation shall be based and the SAR Value
      of each share of Stock. Such SAR Value shall be no less than the Fair Market
      Value of a share of Stock on the date that the Stock Appreciation Right is
      granted. The Stock Appreciation Right Certificate shall set forth such other
      terms and conditions for the exercise of the Stock Appreciation Right as the
      Committee deems appropriate under the circumstances, but no Stock Appreciation
      Right Certificate shall make a Stock Appreciation Right exercisable on or after
      the date which is the tenth anniversary of the date such Stock Appreciation
      Right is granted.

    
      	 	
              (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
                

            

    

    

    
      
        
          
          

        

        
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    his
      or
      her Option with respect to such share and, conversely, that the exercise of
      the
      Option with respect to any share of Stock shall cancel the Eligible Employee’s
      or Director’s right to exercise his or her Stock Appreciation Right with respect
      to such share. A Stock Appreciation Right which is granted as part of an Option
      shall be exercisable only while the related Option is exercisable. The Option
      Certificate shall set forth such other terms and conditions for the exercise
      of
      the Stock Appreciation Right as the Committee deems appropriate under the
      circumstances.

    
      	 	
              (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.

            

    

    8.3    Exercise.
      A Stock
      Appreciation Right shall be exercisable only when the Fair Market Value of
      a
      share of Stock on which the right to appreciation is based exceeds the SAR
      Value
      for such share, and the payment due on exercise shall be based on such excess
      with respect to the number of shares of Stock to which the exercise relates.
      An
      Eligible Employee or Director upon the exercise of his or her Stock Appreciation
      Right shall receive a payment from the Company in cash or in Stock 

    

    
      
        
          
          

        

        
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    issued
      under this Plan, or in a combination of cash and Stock, and the number of shares
      of Stock issued shall be based on the Fair Market Value of a share of Stock
      on
      the date the Stock Appreciation Right is exercised. The Committee acting in
      its
      absolute discretion shall have the right to determine the form and time of
      any
      payment under this § 8.3.

    § 9.

    STOCK
      GRANTS

    9.1    Committee
      Action.
      The
      Committee acting in its absolute discretion shall have the right to make Stock
      Grants and Stock Unit Grants to Eligible Employees and to Directors.
      The
      Committee may appoint a delegate and authorize such delegate to make Stock
      Grants and Stock Unit Grants to Eligible Employees who are not “insiders” within
      the meaning of rule 16b-3 or “covered employees” under § 162(m) of the
      Code. Each Stock Grant and each Stock Unit Grant shall be evidenced by a Stock
      Grant Certificate, and each Stock Grant Certificate shall set forth the
      conditions, if any, under which Stock will be issued under the Stock Grant
      or
      cash will be paid under the Stock Unit Grant and the conditions under which
      the
      Eligible Employee’s or Director’s interest in any Stock which has been issued
      will become non-forfeitable.

    9.2    Conditions.

     

     

    
      	
            	(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

            

    

    

    
      
        
          
          

        

        
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    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 and the deadline for satisfying each such condition. Stock
      subject to a Stock Grant shall be issued in the name of an Eligible Employee
      or
      Director only after each such condition, if any, has been timely satisfied,
      and
      any Stock which is so issued shall be held by the Company pending the
      satisfaction of the forfeiture conditions, if any, under § 9.2(b) for the
      related Stock Grant. 

    
      	
            	(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
                

            

    

    

    
      
        
          
          

        

        
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    cash
      payable under a Stock Unit Grant shall depend on the extent to which he or
      she
      timely satisfies each such condition. If a share of Stock is issued under this
      § 9.2(b) before an Eligible Employee’s or Director’s interest in such share
      of Stock is non-forfeitable, (1) such share of Stock shall not be available
      for
      re-issuance under § 3 until such time, if any, as such share of Stock
      thereafter is forfeited as a result of a failure to timely satisfy a forfeiture
      condition and (2) the Company shall have the right to condition any such
      issuance on the Eligible Employee or Director first signing an irrevocable
      stock
      power in favor of the Company with respect to the forfeitable shares of Stock
      issued to such Eligible Employee or Director in order for the Company to effect
      any forfeiture called for under the related Stock Grant
      Certificate.

    
      	
            	(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.

            

    

    

    
      
        
          
          

        

        
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    9.3    Dividends,
      Voting Rights and Creditor Status.
      

    
      	 	
              (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
                

            

    

    

    
      
        
          
          

        

        
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    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.

            

    

    9.4    Satisfaction
      of Forfeiture Conditions.
      A share
      of Stock shall cease to be subject to a Stock Grant at such time as an Eligible
      Employee’s or a Director’s interest in such Stock becomes non-forfeitable under
      this Plan, and the certificate or other evidence of ownership representing
      such
      share shall be transferred to the Eligible Employee or Director as soon as
      practicable thereafter.

    9.5    Income
      Tax Deduction.
      

    
      	 	
              (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 

            

    

    

    
      
        
          
          

        

        
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    subject
      to at least one condition related to one, or more than one, performance goal
      based on the performance goals described in § 9.5(b) which seems likely to
      result in the Stock Grant or Stock Unit Grant qualifying as “performance-based
      compensation” under § 162(m) of the Code or (2) make Stock Grants and Stock Unit
      Grants to Eligible Employees under such other circumstances as the Committee
      deems likely to result in an income tax deduction for the Company with respect
      such Stock Grant or Stock Unit Grant.
      A
      performance goal may be set in any manner determined by the Committee, including
      looking to achievement on an absolute or relative basis in relation to peer
      groups or indexes, and no change may be made to a performance goal after the
      goal has been set.

    
      	 	
              (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
                

            

    

    

    
      
        
          
          

        

        
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    in
      such
      earnings, (8) the Company’s consolidated net income or the growth in such
      income, (9) the value of the Company’s stock or the growth in such value, (10)
      the Company’s stock price or the growth in such price, (11) the Company’s return
      on assets or the growth on such return, (12) the Company’s cash flow or the
      growth in such cash flow, (13) the Company’s total shareholder return or the
      growth in such return, (14) the Company’s expenses or the reduction of such
      expenses, (15) the Company’s revenue growth, (16) the Company’s overhead ratios
      or changes in such ratios, (17) the Company’s expense-to-sales ratios or
      the changes in such ratios, or (18) the Company’s economic value added or
      changes in such value added.

    
      	 	
              (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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    recurring
      items, including, without limitation, the charges or costs associated with
      restructurings of the Company, discontinued operations, and the cumulative
      effects of accounting changes and, further, may take into account any unusual
      or
      non-recurring events affecting the Company, changes in applicable tax laws
      or
      accounting principles or such other factors as the Committee may determine
      reasonable and appropriate under the circumstances (including, without
      limitation, any factors that could result in the Company’s paying non-deductible
      compensation to an Eligible Employee).

    § 10.

    NON-TRANSFERABILITY

    No
      Option, Stock Grant, Stock Unit Grant or Stock Appreciation Right shall (absent
      the Committee’s consent) be transferable by an Eligible Employee or a Director
      other than by will or by the laws of descent and distribution, and any Option
      or
      Stock Appreciation Right shall (absent the Committee’s consent) be exercisable
      during an Eligible Employee’s or Director’s lifetime only by the Eligible
      Employee or Director. The person or persons to whom an Option or Stock Grant
      or
      Stock Unit Grant or Stock Appreciation Right is transferred by will or by the
      laws of descent and distribution (or with the Committee’s consent) thereafter
      shall be treated as the Eligible Employee or Director.

    

    
      
        
          
          

        

        
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    § 11.

    SECURITIES
      REGISTRATION

    As
      a
      condition to the receipt of shares of Stock under this Plan, the Eligible
      Employee or Director shall, if so requested by the Company, agree to hold such
      shares of Stock for investment and not with a view of resale or distribution
      to
      the public and, if so requested by the Company, shall deliver to the Company
      a
      written statement satisfactory to the Company to that effect. Furthermore,
      if so
      requested by the Company, the Eligible Employee or Director shall make a written
      representation to the Company that he or she will not sell or offer for sale
      any
      of such Stock unless a registration statement shall be in effect with respect
      to
      such Stock under the 1933 Act and any applicable state securities law or he
      or
      she shall have furnished to the Company an opinion in form and substance
      satisfactory to the Company of legal counsel satisfactory to the Company that
      such registration is not required. Certificates or other evidence of ownership
      representing the Stock transferred upon the exercise of an Option or Stock
      Appreciation Right or upon the lapse of the forfeiture conditions, if any,
      on
      any Stock Grant may at the discretion of the Company bear a legend to the effect
      that such Stock has not been registered under the 1933 Act or any applicable
      state securities law and that such Stock cannot be sold or offered for sale
      in
      the absence of an effective registration statement as to such Stock under the
      1933 Act and any applicable state securities law or an opinion in form and
      substance satisfactory to the Company of legal counsel satisfactory to the
      Company that such registration is not required.

    

    
      
        
          
          

        

        
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    § 12.

    LIFE
      OF PLAN

    No
      Option
      or Stock Appreciation Right shall be granted or Stock Grant or Stock Unit Grant
      made under this Plan on or after the earlier of:

    
      	 	
              (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

            

    

    
      	 	
              (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.

            

    

    § 13.

    ADJUSTMENT

    13.1 Capital
      Structure.
      The
      grant caps described in § 3.4, the number, kind or class (or any combination
      thereof) of shares of Stock subject to outstanding Options and Stock
      Appreciation Rights granted under this Plan and the Option Price of

    

    
      
        
          
          

        

        
          -27-

          
            

          

        

        
          
          

        

      

    

    

    such
      Options and the SAR Value of such Stock Appreciation Rights as well as the
      number, kind or class (or any combination thereof) of shares of Stock subject
      to
      outstanding Stock Grants and Stock Unit Grants made under this Plan shall be
      adjusted by the Committee in a reasonable and equitable manner to preserve
      immediately after

    
      	 	
              (a)

            	
              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

            

    

    
      	 	
              (b)

            	
              any
                other transaction described in § 424(a) of the Code which does not
                constitute a Change in Control of the
                Company

            

    

    the
      aggregate intrinsic value of each such outstanding Option, Stock Appreciation
      Right, Stock Grant and Stock Unit Grant immediately before such restructuring
      or
      recapitalization or other transaction.

    13.2    Available
      Shares.
      If any
      adjustment is made with respect to any outstanding Option, Stock Appreciation
      Right, Stock Grant or Stock Unit Grant under § 13.1, then the Committee
      shall adjust the number, kind or class (or any combination thereof) of shares
      of
      Stock reserved under § 3.1 so that there is a sufficient number, kind and
      class of shares of Stock available for issuance pursuant to each such Option,
      Stock Appreciation Right, Stock Grant and Stock Unit Grant as adjusted under
      § 13.1 without seeking the approval of the Company’s shareholders for such
      adjustment unless such approval is required under applicable law or the rules
      of
      the stock exchange on which shares of Stock are traded. Furthermore, the
      Committee shall have the absolute discretion to further adjust such number,
      kind
      or class (or any combination thereof) of 

    

    
      
        
          
          

        

        
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    shares
      of
      Stock reserved under § 3.1 in light of any of the events described in
§ 13.1(a) and § 13.1(b) to the extent the Committee acting in good
      faith determinates that a further adjustment would be appropriate and proper
      under the circumstances and in keeping with the purposes of this Plan without
      seeking the approval of the Company’s shareholders for such adjustment unless
      such approval is required under applicable law or the rules of the stock
      exchange on which shares of Stock are traded.

    13.3    Transactions
      Described in § 424 of the Code.
      If
      there is a corporate transaction described in § 424(a) of the Code which
      does not constitute a Change in Control of the Company, the Committee as part
      of
      any such transaction shall have right to
      make
      Stock Grants, Stock Unit Grants and Option and Stock Appreciation Right grants
      (without regard to any limitations set forth under 3.4 of this Plan) to effect
      the assumption of, or the substitution for, outstanding stock grants, stock
      unit
      grants and option and stock appreciation right grants previously made by any
      other corporation to the extent that such corporate transaction calls for such
      substitution or assumption of such outstanding stock grants, stock unit grants
      and stock option and stock appreciation right grants. Furthermore, if the
      Committee makes any such grants as part of any such transaction, the Committee
      shall have the right to increase the number of shares of Stock available for
      issuance under § 3.1 by the number of shares of Stock subject to such
      grants without seeking the approval of the Company’s shareholders for such
      adjustment unless such approval is required under applicable law or the rules
      of
      the stock exchange on which shares of Stock are traded.

    

    
      
        
          
          

        

        
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    13.4    Fractional
      Shares.
      If any
      adjustment under this § 13 would create a fractional share of Stock or a
      right to acquire a fractional share of Stock under any Option, Stock
      Appreciation Right or Stock Grant, such fractional share shall be disregarded
      and the number of shares of Stock reserved under this Plan and the number
      subject to any Options or Stock Appreciation Right grants and Stock Grants
      shall
      be the next lower number of shares of Stock, rounding all fractions downward.
      An
      adjustment made under this § 13 by the Committee shall be conclusive and
      binding on all affected persons.

    § 14.

    CHANGE
      IN CONTROL

    In
      the
      event of (i) a sale, lease or other disposition of all or substantially all
      of
      the assets of the Company, (ii) a consolidation or merger of the Company
      with or into any other corporation or other entity or person, or any other
      corporate reorganization, in which the Stockholders of the Company immediately
      prior to such consolidation, merger or reorganization, own less than 50% of
      the
      Company’s outstanding voting power of the surviving entity (or its parent)
      following the consolidation, merger or reorganization or (iii) any
      transaction (or series of related transactions involving a person or entity,
      or
      a group of affiliated persons or entities) in which in excess of fifty percent
      (50%) of the Company’s outstanding voting power is transferred (“a Corporate
      Transaction”), then any surviving corporation or acquiring corporation shall
      assume any Option, Stock Appreciation Right, Stock Grant or Stock Unit Grant
      (collectively “Stock Awards”) outstanding under the Plan or shall substitute
      similar stock awards (including an award 

    

    
      
        
          
          

        

        
          -30-

          
            

          

        

        
          
          

        

      

    

    

    to
      be
      settled in cash or to acquire the same consideration paid to the Stockholders
      in
      the Corporate Transaction for those outstanding under the Plan). In the event
      any surviving corporation or acquiring corporation refuses to assume such Stock
      Awards or to substitute similar stock awards for those outstanding under the
      Plan, then with respect to Stock Awards held by Participants whose employment
      or
      service with the Company has not terminated, the vesting of such Stock Awards
      (and, if applicable, the time during which such Stock Awards may be exercised)
      shall be accelerated in full and, if applicable, be exercisable for a reasonable
      period of time immediately prior to the effective date of the Corporate
      Transaction, subject to the transaction occurring, and the Stock Awards shall
      terminate if not exercised (if applicable) at or prior to such event; provided,
      that (1) if any issuance or forfeiture condition described in a Stock Award
      relates to satisfying any performance goal and there is a target for such
      performance goal, such issuance or forfeiture condition shall be deemed
      satisfied under this § 14 only to the extent of such target unless such target
      has been exceeded before the effective date of the Corporate Transaction, in
      which event such issuance or forfeiture condition shall be deemed satisfied
      to
      the extent such target had been so exceeded, and (2) a Corporate Transaction
      shall affect a Stock Appreciation Right or Stock Unit Grant which is subject
      to
§ 409A of the Code only if the Corporate Transaction also constitutes a change
      in the ownership or effective control of the Company or in the ownership of
      a
      substantial portion of the assets of the Company within the meaning of §
409A(a)(2)(A)(v) of the Code. With respect to any other Stock Awards outstanding
      under the Plan, such Stock Awards shall terminate if not exercised (if
      applicable) prior to such event.

    

    
      
        
          
          

        

        
          -31-

          
            

          

        

        
          
          

        

      

    

    

    

    § 15.

    AMENDMENT
      OR TERMINATION

    This
      Plan
      may be amended by the Board from time to time to the extent that the Board
      deems
      necessary or appropriate; provided, however, (a) no amendment shall be made
      absent the approval of the shareholders of the Company to the extent such
      approval is required under applicable law or the rules of the stock exchange
      on
      which shares of Stock are listed and (b) no amendment shall be made to § 14
      on or after the date of any Corporate Transaction which might
      adversely affect any rights which otherwise would vest on the related Change
      Effective Date. The Board also may suspend granting Options or Stock
      Appreciation Rights or making Stock Grants or Stock Unit Grants under this
      Plan
      at any time and may terminate this Plan at any time; provided, however, the
      Board shall not have the right unilaterally to modify, amend or cancel any
      Option or Stock Appreciation Right granted or Stock Grant made before such
      suspension or termination unless (1) the Eligible Employee or Director
      consents in writing to such modification, amendment or cancellation or
      (2) there is a dissolution or liquidation of the Company or a transaction
      described in § 13.1 or § 14.

    § 16.

    MISCELLANEOUS

    16.1    Shareholder
      Rights.
      No
      Eligible Employee or Director shall have any rights as a shareholder of the
      Company as a result of the grant of an Option or a Stock Appreciation Right
      pending the actual delivery of the Stock subject to such Option or Stock
      Appreciation Right to such Eligible Employee or Director. An Eligible

    

    
      
        
          
          

        

        
          -32-

          
            

          

        

        
          
          

        

      

    

    

    Employee’s
      or a Director’s rights as a shareholder in the shares of Stock which remain
      subject to forfeiture under § 9.2(b) shall be set forth in the related
      Stock Grant Certificate.

    16.2    No
      Contract of Employment.
      The
      grant of an Option or a Stock Appreciation Right or a Stock Grant or Stock
      Unit
      Grant to an Eligible Employee or Director under this Plan shall not constitute
      a
      contract of employment or a right to continue to serve on the Board and shall
      not confer on an Eligible Employee or Director any rights upon his or her
      termination of employment or service in addition to those rights, if any,
      expressly set forth
      in
      this Plan or the related Option Certificate, Stock Appreciation Right
      Certificate, or Stock Grant Certificate.

    16.3    Withholding.
      Each
      Option, Stock Appreciation Right, Stock Grant and Stock Unit Grant shall be
      made
      subject to the condition that the Eligible Employee or Director consents to
      whatever action the Committee directs to satisfy the minimum statutory federal
      and state tax withholding requirements, if any, which the Company determines
      are
      applicable to the exercise of such Option or Stock Appreciation Right or to
      the
      satisfaction of any forfeiture conditions with respect to Stock subject to
      a
      Stock Grant or Stock Unit Grant issued in the name of the Eligible Employee
      or
      Director. No
      withholding shall be effected under this Plan which exceeds the minimum
      statutory federal and state withholding requirements.

    16.4    Construction.
      All
      references to sections (§) are to sections (§) of this Plan unless otherwise
      indicated. This Plan shall be construed under the laws of the State of Delaware.
      Each term set forth in § 2 shall, unless otherwise stated, have the

    

    
      
        
          
          

        

        
          -33-

          
            

          

        

        
          
          

        

      

    

    

    meaning
      set forth opposite such term for purposes of this Plan and, for purposes of
      such
      definitions, the singular shall include the plural and the plural shall include
      the singular.
      Finally,
      if there is any conflict between the terms of this Plan and the terms of any
      Option Certificate, Stock Appreciation Right Certificate or Stock Grant
      Certificate, the terms of this Plan shall control.

    16.5    Other
      Conditions.
      Each
      Option Certificate, Stock Appreciation Right Certificate or Stock Grant
      Certificate may require that an Eligible Employee or a Director (as a condition
      to the exercise of an Option or a Stock Appreciation Right or the
      issuance of Stock subject to a Stock Grant) enter into any agreement or make
      such representations prepared by the Company, including (without limitation)
      any
      agreement which restricts the transfer of Stock acquired pursuant to the
      exercise of an Option or a Stock Appreciation Right or a Stock Grant or provides
      for the repurchase of such Stock by the Company.

    16.6    Rule
      16b-3.
      The
      Committee shall have the right to amend any Option, Stock Grant or Stock
      Appreciation Right to withhold or otherwise restrict the transfer of any Stock
      or cash under this Plan to an Eligible Employee or Director as the Committee
      deems appropriate in order to satisfy any condition or requirement under Rule
      16b-3 to the extent Rule 16 of the 1934 Act might be applicable to such grant
      or
      transfer.

    16.7    Coordination
      with Employment Agreements and Other Agreements.
      If the
      Company enters into an employment agreement or other agreement with an Eligible
      Employee or Director which expressly provides for the acceleration in vesting
      of

    

    
      
        
          
          

        

        
          -34-

          
            

          

        

        
          
          

        

      

    

    

    an
      outstanding Option, Stock Appreciation Right, Stock Grant or Stock Unit Grant
      or
      for the extension of the deadline to exercise any rights under an outstanding
      Option, Stock Appreciation Right, Stock Grant or Stock Unit Grant, any such
      acceleration or extension shall be deemed effected pursuant to, and in
      accordance with, the terms of such outstanding Option, Stock Appreciation Right,
      Stock Grant or Stock Unit Grant and this Plan even if such employment agreement
      or other agreement is first effective after the date the outstanding Option
      or
      Stock Appreciation Right was granted or the Stock Grant or Stock Unit Grant
      was
      made.

    IN
      WITNESS WHEREOF, the Company has caused its duly authorized officer to execute
      this Plan to evidence its adoption of this Plan.

     

     

    
      	 	
              INTERNAP
                NETWORK SERVICES CORPORATION

              By:__________________________________

              Date:______________________

            

    

     

     

     

     

     

     

     

     

    -35-Exhibit 10.2

    
      

    

     

    Exhibit
      10.2

     

     

    

     

     

    

     

     

    

     

     

    

     

     

    

     

     

    

     

     

    

     

     

    

     

     

    

     

     

    

     

     

    AMENDED
      AND RESTATED

     

     

    2004
      INTERNAP NETWORK SERVICES CORPORATION 

     

     

    EMPLOYEE
      STOCK PURCHASE PLAN 

     

     

    (amended
      January 11, 2006)

     

    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

    

     

    

     

     

    TABLE
      OF CONTENTS 

     

    
      	
               

               
                

            	
               
                

            	
               
                

            	
                  
                

            	
               

               
                

            	
                  
                

            	
              Page
                

            
	
              §
                1. 

            	
                  
                

            	
                  
                

            	
                  
                

            	
              PURPOSE
                

            	
                  
                

            	
                  
                

            	
              3

            	
                 
                

            
	
              DEFINITIONS
                

            	
                  
                

            	 	
                 
                

            
	
              2.1
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Account
                

            	
                  
                

            	
                  
                

            	
              3

            	
                 
                

            
	
              2.2
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Authorization
                

            	
                  
                

            	
                  
                

            	
              3

            	
                 
                

            
	
              2.3
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Board
                

            	
                  
                

            	
                  
                

            	
              3

            	
                 
                

            
	
              2.4
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Code
                

            	
                  
                

            	
                  
                

            	
              3

            	
                 
                

            
	
              2.5
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Eligible
                Employee 

            	
                  
                

            	
                  
                

            	
              3

            	
                 
                

            
	
              2.6
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Exercise
                Date 

            	
                  
                

            	
                  
                

            	
              4

            	
                 
                

            
	
              2.7
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Fair
                Market Value 

            	
                  
                

            	
                  
                

            	
              4

            	
                 
                

            
	
              2.8
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Internap
                

            	
                  
                

            	
                  
                

            	
              4

            	
                 
                

            
	
              2.9
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              1993
                Act 

            	
                  
                

            	
                  
                

            	
              4

            	
                 
                

            
	
              2.10
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              1934
                Act 

            	
                  
                

            	
                  
                

            	
              4

            	
                 
                

            
	
              2.11
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Offering
                Period 

            	
                  
                

            	
                  
                

            	
              4

            	
                 
                

            
	
              2.12
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Option
                Price 

            	
                  
                

            	
                  
                

            	
              4

            	
                 
                

            
	
              2.13
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Participating
                Employee 

            	
                  
                

            	
                  
                

            	
              4

            	
                 
                

            
	
              2.14
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Participating
                Employer 

            	
                  
                

            	
                  
                

            	
              4

            	
                 
                

            
	
              2.15
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Plan
                

            	
                  
                

            	
                  
                

            	
              4

            	
                 
                

            
	
              2.16
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Plan
                Administrator 

            	
                  
                

            	
                  
                

            	
              4

            	
                 
                

            
	
              2.17
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Purchase
                Period 

            	
                  
                

            	
                  
                

            	
              4

            	
                 
                

            
	
              2.18
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Stock
                

            	
                  
                

            	
                  
                

            	
              4

            	
                 
                

            
	
              2.19
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Subsidiary
                

            	
                  
                

            	
                  
                

            	
              4

            	
                 
                

            
	
              §
                3. 

            	
                  
                

            	
                  
                

            	
                  
                

            	
              SHARES
                RESERVED UNDER THE PLAN 

            	
                  
                

            	
                  
                

            	
              4

            	
                 
                

            
	
              §
                4. 

            	
                  
                

            	
                  
                

            	
                  
                

            	
              EFFECTIVE
                DATE 

            	
                  
                

            	
                  
                

            	
              5

            	
                 
                

            
	
              §
                5. 

            	
                  
                

            	
                  
                

            	
                  
                

            	
              PLAN
                ADMINISTRATOR 

            	
                  
                

            	
                  
                

            	
              5

            	
                 
                

            
	
              §
                6. 

            	
                  
                

            	
                  
                

            	
                  
                

            	
              PARTICIPATION
                

            	
                  
                

            	
                  
                

            	
              5

            	
                 
                

            
	
              6.1
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Requirements
                

            	
                  
                

            	
                  
                

            	
              5

            	
                 
                

            
	
              6.2
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Continuity
                Authorization 

            	
                  
                

            	
                  
                

            	
              5

            	
                 
                

            
	
              6.3
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Termination
                

            	
                  
                

            	
                  
                

            	
              5

            	
                 
                

            
	
              §
                7. 

            	
                  
                

            	
                  
                

            	
                  
                

            	
              GRANTING
                OF OPTIONS 

            	
                  
                

            	
                  
                

            	
              5

            	
                 
                

            
	
              7.1
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              General
                Rule 

            	
                  
                

            	
                  
                

            	
              5

            	
                 
                

            
	
              7.2
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Statutory
                Limitation 

            	
                  
                

            	
                  
                

            	
              5

            	
                 
                

            
	
              7.3
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Insufficient
                Number of Shares of Stock 

            	
                  
                

            	
                  
                

            	
              6

            	
                 
                

            
	
              §
                8. 

            	
                  
                

            	
                  
                

            	
                  
                

            	
              PAYROLL
                DEDUCTIONS 

            	
                  
                

            	
                  
                

            	
              6

            	
                 
                

            
	
              8.1
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Initial
                Authorization 

            	
                  
                

            	
                  
                

            	
              6

            	
                 
                

            
	
              8.2
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Continuing
                Authorization 

            	
                  
                

            	
                  
                

            	
              6

            	
                 
                

            
	
              8.3
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Authorization
                Amendment 

            	
                  
                

            	
                  
                

            	
              6

            	
                 
                

            
	
              8.4
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Authorization
                Revocation and Withdrawal Rights 

            	
                  
                

            	
                  
                

            	
              6

            	
                 
                

            
	
              8.5
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Account
                Credits, General Assets and Taxes 

            	
                  
                

            	
                  
                

            	
              6

            	
                 
                

            
	
              8.6
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              No
                Cash Payments 

            	
                  
                

            	
                  
                

            	
              7

            	
                 
                

            
	
              §
                9. 

            	
                  
                

            	
                  
                

            	
                  
                

            	
              EXERCISE
                OF OPTION 

            	
                  
                

            	
                  
                

            	
              7

            	
                 
                

            
	
              9.1
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              General
                Rule 

            	
                  
                

            	
                  
                

            	
              7

            	
                 
                

            

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    
      	
              9.2
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Automatic
                Refund 

            	
                  
                

            	
                  
                

            	
              7

            	
                 
                

            
	
              9.3
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Delivery
                of Stock 

            	
                  
                

            	
                  
                

            	
              7

            	
                 
                

            
	
              §
                10. 

            	
                  
                

            	
                  
                

            	
                  
                

            	
              TERMINATION
                OF EMPLOYMENT 

            	
                  
                

            	
                  
                

            	
              7

            	
                 
                

            
	
              §
                11. 

            	
                  
                

            	
                  
                

            	
                  
                

            	
              NON-TRANSFERABILITY
                

            	
                  
                

            	
                  
                

            	
              7

            	
                 
                

            
	
              §
                12. 

            	
                  
                

            	
                  
                

            	
                  
                

            	
              ADJUSTMENT
                

            	
                  
                

            	
                  
                

            	
              8

            	
                 
                

            
	
              §
                13. 

            	
                  
                

            	
                  
                

            	
                  
                

            	
              SECURITIES
                REGISTRATION 

            	
                  
                

            	
                  
                

            	
              8

            	
                 
                

            
	
              §
                14. 

            	
                  
                

            	
                  
                

            	
                  
                

            	
              AMENDMENT
                OR TERMINATION 

            	
                  
                

            	
                  
                

            	
              8

            	
                 
                

            
	
              §
                15. 

            	
                  
                

            	
                  
                

            	
                  
                

            	
              MISCELLANEOUS
                

            	
                  
                

            	
                  
                

            	
              8

            	
                 
                

            
	
              15.1
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Shareholder
                Rights 

            	
                  
                

            	
                  
                

            	
              8

            	
                 
                

            
	
              15.2
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              No
                Contract of Employment 

            	
                  
                

            	
                  
                

            	
              8

            	
                 
                

            
	
              15.3
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Withholding
                

            	
                  
                

            	
                  
                

            	
              9

            	
                 
                

            
	
              15.4
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Construction
                

            	
                  
                

            	
                  
                

            	
              9

            	
                 
                

            
	
              15.5
                

            	
                  
                

            	
                  
                

            	
                  
                

            	
              Rule
                16b-3 

            	
                  
                

            	
                  
                

            	
              9

            	
                 
                

            

    

     
      

    

     

    §
      1. 

     

    PURPOSE
      

     

    The
      primary purpose of this Plan is to encourage Stock ownership by each Eligible
      Employee of Internap by permitting the purchase of Stock at a discount which
      is
      permissible under § 423 of the Code. Internap intends that this Plan constitute
      an “employee stock purchase plan” within the meaning of § 423 of the Code and,
      further, intends that any ambiguity in this Plan or any related offering be
      resolved to effect such intent. 

     

    §
      2. 

     

    DEFINITIONS
      

     

    2.1  
      Account
      —
means
      the separate bookkeeping account which shall be established and maintained
      by
      the Plan Administrator for each Participating Employee for each Purchase Period
      to record the payroll deductions made on his or her behalf to purchase Stock
      under this Plan. 

    2.2  
      Authorization
      —
means
      the participation election and payroll deduction authorization form which an
      Eligible Employee shall be required to properly complete in writing and timely
      file with the Plan Administrator before the end of an Offering Period in order
      to participate in this Plan for the related Purchase Period and which shall
      require an Eligible Employee to provide such information and to take such action
      as the Plan Administrator in his or her discretion deems necessary or helpful
      to
      the orderly administration of this Plan. 

    2.3  
      Board
      —
means
      the Board of Directors of Internap. 

    2.4  
      Code
      —
means
      the Internal Revenue Code of 1986, as amended. 

    2.5  
      Eligible
      Employee —
means
      each employee of Internap or a Subsidiary except — 

    
      	
              (a)
                

            	
               
                

            	
              an
                employee who customarily is employed (within the meaning of Code
§
                423(b)(4)(B)) 20 hours or less per week by Internap or such Subsidiary,
                

            

    

    

    
      	
              (b)
                

            	
               
                

            	
              an
                employee who customarily is employed (within the meaning of Code
§
                423(b)(4)(C)) for not more than 5 months in any calendar year by
                Internap
                or such Subsidiary, 

            

    

    

    
      	
              (c)
                

            	
               
                

            	
              an
                employee who would own (immediately after the grant of an option
                under
                this Plan) stock possessing 5% or more of the total combined voting
                power
                or value of all classes of stock of Internap based on the rules set
                forth
                in § 423(b)(3) and § 424 of the Code,

            

    

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    
      	
              (d)
                

            	
               
                

            	
              a
                highly compensated employee (as defined under § 414(q) of the Code) who
                falls within a category of highly compensated employees that the
                Plan
                Administrator has determined in its discretion to exclude under this
                Plan,
                and 

            

    

    

    
      	
              (e)
                

            	
               
                

            	
              an
                employee who is a citizen of a country whose laws would prohibit
                the
                granting of an option under this Plan.

            

    

    

    2.6  
      Exercise
      Date —
means
      for each Purchase Period the last day of such Purchase Period. 

    2.7  
      Fair
      Market Value —
means
      (1) the closing price on any date for a share of Stock as reported by
The
      Wall Street Journal or,
      if
The
      Wall Street Journal no
      longer
      reports such closing price, such closing price as reported by a newspaper or
      trade journal selected by the Plan Administrator or, if no such closing price
      is
      available on such date, (2) such closing price as so reported for the
      immediately preceding business day, or, if no newspaper or trade journal reports
      such closing price or if no such price quotation is available, (3) the price
      which the Plan Administrator acting in good faith determines through any
      reasonable valuation method that a share of Stock might change hands between
      a
      willing buyer and a willing seller, neither being under any compulsion to buy
      or
      to sell and both having reasonable knowledge of the relevant facts.

    2.8  
      Internap
      —
means
      Internap Network Services Corporation, a corporation incorporated under the
      laws
      of the State of Delaware, and any successor to Internap Network Services
      Corporation. 

    2.9  
      1993
      Act —
means
      the Securities Act of 1933, as amended. 

    2.10  
      1934
      Act —
means
      the Securities Exchange act of 1934, as amended. 

    2.11  
      Offering
      Period —
means
      the period set by the Plan Administrator which precedes the beginning of the
      related Purchase Period and which shall continue for no more than 15 days.
      

    2.12  
      Option
      Price —
means
      for each Purchase Period 95% of the Fair Market Value for a share of Stock
      on
      the last day of such Purchase Period. 

    2.13  
      Participating
      Employee —
means
      for each Purchase Period each Eligible Employee who is employed by a
      Participating Employer and who has satisfied the requirements set forth in
§ 4
      of this Plan for such Purchase Period. 

    2.14  
      Participating
      Employer —
means
      for each Purchase Period Internap and each Subsidiary which the Plan
      Administrator designates as a Participating Employer for such Purchase Period.
      

    2.15  
      Plan
      —
means
      this 2004 Internap Network Services Corporation Employee Stock Purchase Plan.
      

    2.16  
      Plan
      Administrator —
means
      the person or entity so designated by the Board. 

    2.17  
      Purchase
      Period —
means
      two consecutive calendar quarters. 

    2.18  
      Stock
      —
means
      Internap Network Services Corporation common stock. 

    2.19  
      Subsidiary
      —
means
      each corporation which is a subsidiary of Internap (within the meaning of
§424(f) of the Code). 

     

    §
      3. 

     

    SHARES
      RESERVED UNDER THE PLAN 

     

    Effective
      June 15, 2004 there shall (subject to § 12) be a total of 6,000,000 such shares
      so reserved, less the number previously issued under this Plan. All such shares
      of Stock shall be reserved to the extent that Internap deems appropriate from
      authorized but unissued shares of Stock or from shares of Stock which have
      been
      reacquired by Internap. 

     

    §
      4. 

     

    EFFECTIVE
      DATE 

     

    The
      original effective date of this Plan shall be June 15, 2004. 

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

     

    §
      5. 

     

    PLAN
      ADMINISTRATOR 

     

    This
      Plan
      shall be administered by the Plan Administrator. The Plan Administrator acting
      in its absolute discretion shall exercise such powers and take such action
      as
      expressly called for under this Plan and, further, the Plan Administrator shall
      have the power to interpret this Plan and to take such other action in the
      administration and operation of this Plan as the Plan Administrator deems
      equitable under the circumstances, which action shall be binding on Internap,
      on
      each affected Participating Employee and Participating Employer and on each
      other person directly or indirectly affected by such action. 

     

    §
      6. 

     

    PARTICIPATION
      

     

    6.1  
      Requirements.
       Each
      Eligible Employee who is employed by a Participating Employer on the first
      day
      of an Offering Period shall satisfy the requirements to be a Participating
      Employee for the related Purchase Period if 

    
      	
              (a)
                

            	
               
                

            	
              he
                or she has properly completed and filed an Authorization with the
                Plan
                Administrator on or before the last day of such Offering Period to
                purchase shares of Stock pursuant to options granted under this Plan,
                and
                

            

    

    

    

    
      	
              (b)
                

            	
               
                

            	
              his
                or her employment as an Eligible Employee continues uninterrupted
                throughout the period which begins on the first day of such Offering
                Period and ends on the first day of the related Purchase Period,
                and no
                Eligible Employee’s employment shall be treated as interrupted by a
                transfer directly between Internap and any Subsidiary or between
                one
                Subsidiary and another Subsidiary. 

            

    

    

    6.2  
      Continuity
      Authorization.  An
      Authorization shall continue in effect until amended under § 8.2 or revoked
      under § 8.4. 

    6.3  
      Termination.
       A
      Participating Employee’s status as such shall terminate for a Purchase Period
      (for which he or she has an effective Authorization) at such time as his or
      her
      account is withdrawn under § 8.3 or his or her employment terminates under § 10.

     

    §
      7. 

     

    GRANTING
      OF OPTIONS 

     

    7.1  
      General
      Rule.  Subject
      to § 7.2 and § 7.3, each Participating Employee for each Purchase Period
      automatically shall be granted an option as of the first day of such Purchase
      Period to purchase at the Option Price a maximum number of whole shares of
      Stock, which number shall be determined by dividing $12,500.00 by the Fair
      Market Value of a share of Stock on the first day of such Purchase Period.
      

    7.2  
      Statutory
      Limitation.  No
      option granted under this § 7 to any Eligible Employee shall permit his or her
      rights to purchase shares of Stock under this Plan or under any other employee
      stock purchase plan (within the meaning of § 423 of the Code) established by
      Internap or any Subsidiary to accrue (within the meaning of § 423(b)(8) of the
      Code) at a rate which exceeds $25,000 of the Fair Market Value of such Stock
      for
      any calendar year. 

    7.3  
      Insufficient
      Number of Shares of Stock.  If
      the number of shares of Stock reserved for purchase for any Purchase Period
      is
      insufficient to cover the number of shares which Participating Employees elect
      to purchase on the Exercise Date for of such Purchase Period, then the number
      of
      shares of Stock which each Participating Employee has a right to purchase at
      the
      end of such Purchase Period shall be reduced to the number of shares of Stock
      which the Plan Administrator shall determine by multiplying the number of shares
      of Stock reserved under this Plan by a fraction, the numerator of which shall
      be
      the number of shares of Stock which such Participating Employee elected to
      purchase at the end of such Purchase Period and the denominator of which shall
      be the total number of shares of Stock which all Participating Employees elected
      to purchase at the end of such Purchase Period. 

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

     

    §
      8. 

     

    PAYROLL
      DEDUCTIONS 

     

    8.1  
      Initial
      Authorization.  Each
      Participating Employee’s initial Authorization shall specify the specific dollar
      amount which he or she authorizes his or her Participating Employer to deduct
      from his or her compensation each pay period (determined in accordance with
      such
      Participating Employer’s standard payroll policies and practices) during the
      Purchase Period for which such Authorization is in effect, provided

    
      	
              (a)
                

            	
               
                

            	
              the
                minimum amount deducted from a Participating Employee’s compensation
                during any pay period in a Purchase Period shall not be less than
                $10.
                

            

    

    

    
      	
              (b)
                

            	
               
                

            	
              the
                maximum amount deducted from a Participating Employee’s compensation
                during any Purchase Period shall not exceed the lesser of $12,500
                or such
                amount as set from time to time by the Plan Administrator.
                

            

    

    

    8.2  
      Continuing
      Authorization.  An
      Authorization once timely filed under § 6(a)(1) shall continue in effect until
      amended under § 8.3 or revoked under § 8.4. 

    8.3  
      Authorization
      Amendment.  An
      Authorization may be amended during any Offering Period and such amendment
      shall
      be effective for the related Purchase Period if timely filed under § 6(a)(1).

    

    8.4  
      Authorization
      Revocation and Withdrawal Rights. 

    
      	
              (a)
                

            	
               
                

            	
              Revocation.
                A Participating Employee shall have the right during any Purchase
                Period
                to revoke an Authorization, and such revocation stop the payroll
                deductions which he or she previously had authorized for such Purchase
                Period if he or she files an Authorization revocation with the Plan
                Administrator before the Exercise Date for such Purchase Period,
                and such
                payroll deductions shall stop as soon as practicable after the Plan
                Administrator actually receives such Authorization revocation.
                

            

    

    

    
      	
              (b)
                

            	
               
                

            	
              Withdrawal.
                  If
                a Participating Employee revokes his or her Authorization, he or
                she may
                elect to withdraw the entire balance credited to his or her Account
                for
                such Purchase Period without interest. If a Participating Employee
                makes
                such a withdrawal election, such balance shall be paid to him or
                her in
                cash (without interest) as soon as practicable after the Plan
                Administrator receives his or her withdrawal election. If no such
                election
                is made, such Account balance shall be applied to exercise his or
                her
                option under § 9. 

            

    

    

    8.5  
      Account
      Credits, General Assets and Taxes.  All
      payroll deductions made for a Participating Employee shall be credited to his
      or
      her Account as of the pay day as of which the deduction is made. All payroll
      deductions shall be held by Internap or by one, or more than one, Subsidiary
      (as
      determined by the Plan Administrator) as part of the general assets of Internap
      or any such Subsidiary, and each Participating Employee’s right to the payroll
      deductions credited to his or her Account shall be those of a general and
      unsecured creditor. Internap or such Subsidiary shall have the right to withhold
      on payroll deductions to the extent such person deems necessary or appropriate
      to satisfy applicable tax laws. 

    8.6  
      No
      Cash Payments.  No
      Participating Employee may make any contribution to his or her Account except
      through payroll deductions made in accordance with this § 8. 

     

    §
      9. 

     

    EXERCISE
      OF OPTION 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    

     

    9.1  
      General
      Rule.  Each
      Participating Employee automatically shall be deemed to exercise his or her
      option granted for each Purchase Period on the related Exercise Date for the
      purchase of as many whole shares of Stock subject to such option as the balance
      credited to his or her Account as of that date will purchase at the Option
      Price
      for such shares of Stock. 

    9.2  
      Automatic
      Refund.  If
      a Participating Employee’s Account has a remaining balance after his or her
      option has been exercised as of an Exercise Date under this § 9, such balance
      automatically shall be refunded to the Participating Employee in cash (without
      interest) as soon as practicable following such Exercise Date unless such
      balance is attributable to a fractional share, in which event such Account
      balance may be carried forward (without interest) to the immediately following
      Purchase Period. 

    9.3  
      Delivery
      of Stock.  A
      stock certificate representing any shares of Stock purchased upon the exercise
      of an option under this Plan shall be held for or, at the Participating
      Employee’s direction and expense, delivered to the Participating Employee and
      shall be registered in his or her name; provided, however, Internap shall not
      have any obligation to deliver a certificate to a Participating Employee which
      represents a fractional share of Stock. No Participating Employee (or any person
      who makes a claim through a Participating Employee) shall have any interest
      in
      any shares of Stock subject to an option until such option has been exercised
      and the related shares of Stock actually have been delivered to such person
      or
      have been transferred to a brokerage account for such person at a broker-dealer
      designated by the Plan Administrator. 

     

    §
      10. 

     

    TERMINATION
      OF EMPLOYMENT 

     

    If
      a
      Participating Employee’s employment as an Eligible Employee terminates on or
      before the Exercise Date for a Purchase Period for any reason whatsoever, his
      or
      her Account shall be distributed as if he or she had elected to withdraw his
      or
      her Account in cash under § 8.4 immediately before the date his or her
      employment had so terminated. However, if a Participating Employee is
      transferred directly between Internap and a Subsidiary or between 

    

     

    one
      Subsidiary and another Subsidiary while he or she has an Authorization in
      effect, his or her employment shall not be treated as terminated merely by
      reason of such transfer and any such Authorization shall (subject to all the
      terms and conditions of this Plan) remain in effect after such transfer for
      the
      remainder of such Purchase Period. 

     

     

    §
      11. 

     

    NON-TRANSFERABILITY
      

     

    Neither
      the balance credited to a Participating Employee’s Account nor any rights to the
      exercise of an option or to receive shares of Stock under this Plan shall be
      transferable other than by will or by the laws of descent and distribution,
      and
      any option shall be exercisable during a Participating Employee’s lifetime only
      by the Participating Employee. 

     

    §
      12. 

     

    ADJUSTMENT
      

     

    The
      number, kind or class (or any combination thereof)of shares of Stock reserved
      under § 3, and the Option Price such shares or Stock as well as the number, kind
      or class (or any combination thereof) of shares of Stock subject to grants
      under
      this Plan shall be adjusted by the Plan Administrator in an equitable manner
      to
      reflect any change in the capitalization of Internap, including, but not limited
      to such changes as stock dividends or stock splits. 

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

     

    §
      13. 

     

    SECURITIES
      REGISTRATION 

     

    As
      a
      condition to the receipt of shares of Stock under this Plan, an Eligible
      Employee shall, if so requested by Internap, agree to hold such shares of Stock
      for investment and not with a view of resale or distribution to the public
      and,
      if so requested by Internap, shall deliver to Internap a written statement
      satisfactory to Internap to that effect. Furthermore, if so requested by
      Internap, the Eligible Employee shall make a written representation to Internap
      that he or she will not sell or offer for sale any of such Stock unless a
      registration statement shall be in effect with respect to such Stock under
      the
      1933 Act and any applicable state securities law or the Eligible Employee shall
      have furnished to Internap an opinion in form and substance satisfactory to
      Internap of legal counsel satisfactory to Internap that such registration is
      not
      required. Certificates representing the Stock transferred upon the exercise
      of
      an option may at the discretion of Internap bear a legend to the effect that
      such Stock has not been registered under the 1933 Act or any applicable state
      securities law and that such Stock cannot be sold or offered for sale in the
      absence of an effective registration statement as to such Stock under the 1933
      Act and any applicable state securities law or an opinion in form and substance
      satisfactory to Internap of legal counsel satisfactory to Internap that such
      registration is not required. 

     

    §
      14. 

     

    AMENDMENT
      OR TERMINATION 

     

    This
      Plan
      may be amended by the Board from time to time to the extent that the Board
      deems
      necessary or appropriate in light of, and consistent with, § 423 of the Code and
      the laws of the State of Delaware, and any such amendment shall be subject
      to
      the approval of Internap’s shareholders to the extent such approval is required
      under § 423 of the Code or the laws of the State of Delaware or to the extent
      such approval is required to satisfy any requirements under applicable law.
      The
      Board also may terminate this Plan or any offering made under this Plan at
      any
      time; provided, however, the Board shall not have the right to modify, cancel,
      or amend any option outstanding after the beginning of a Purchase Period unless
      (1) each Participating Employee consents in writing to such modification,
      amendment or cancellation, (2) such modification only accelerates the Exercise
      Date for the related Purchase Period or (3) the Board acting in good faith
      deems
      that such action is required under applicable law. 

     

    §
      15. 

     

    MISCELLANEOUS
      

     

    15.1  
      Shareholder
      Rights.  No
      Participating Employee shall have any rights as a shareholder of Internap as
      a
      result of the grant of an option pending the actual delivery of the Stock
      subject to such option to such Participating Employee. 

    15.2  
      No
      Contract of Employment.  The
      grant of an option to a Participating Employee under this Plan shall not
      constitute a contract of employment and shall not confer on a Participating
      Employee any rights upon his or her termination of employment. 

    15.3  
      Withholding.
       Each
      option shall be made subject to the condition that the Participating Employee
      consents to whatever action the Plan Administrator directs to satisfy the
      federal and state tax withholding requirements, if any, which the Plan
      Administrator in its discretion deems applicable to the exercise of such option.
      

    15.4  
      Construction.
       All
      references to sections (§) are to sections (§) of this Plan unless otherwise
      indicated. This Plan shall be construed under the laws of the State of Georgia.
      Finally, each term set forth in § 2 shall have the meaning set forth opposite
      such term for purposes of this Plan and, for purposes of such definitions,
      the
      singular shall include the plural and the plural shall include the singular.
      

    15.5  
      Rule
      16b-3.  The
      Plan Administrator shall have the right to amend any option to withhold or
      otherwise restrict the transfer of any Stock or cash under this Plan to an
      Eligible Employee as the Plan Administrator deems appropriate in order to
      satisfy any condition or requirement under Rule 16b-3 to the extent Rule 16
      of
      the 1934 Act might be applicable to such grant or transfer. 

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, Internap Network Services Corporation has caused its duly
      authorized officer to execute this Plan to evidence its adoption of this Plan.
      

     

    
 

    
      	 	
              INTERNAP
                NETWORK SERVICES CORPORATION 

              

              

              By:
                

               

              
                

              

              Date:
                

               

               

              
                
 

            

    

    

    
 

     

     

    9

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