Employment
Agreement (this “Agreement”) dated as of
October 12, 2006 (the “Effective Date”), by and
between Internap Network Services Corporation (the
“Company”) and Christopher Dion
(“Executive”) (collectively the “Parties”).
This agreement becomes effective upon the closing of the merger
(the “Merger”) contemplated by that certain Agreement
and Plan of Merger, dated as of October 12, 2006, by and among
the Company, Ivy Acquisition Corp., and VitalStream Holdings, Inc.
(the “Merger Agreement”). This Agreement shall be null
and void upon the termination of the Merger Agreement.
1. Position and Duties . Executive shall serve as Vice
President for the Company, with such duties, authorities and
responsibilities as are commensurate with such position. Executive
shall work from the Company’s offices in Irvine,
California.
2. Base
Salary. Executive shall receive an annual base salary of
$180,000 (“Base Salary”). Payment of Base Salary shall
be subject to standard payroll tax withholdings and deductions.
Executive’s Base Salary shall be paid semi-monthly in
accordance with the Company’s standard payroll practices.
Executive’s Base Salary may be increased or decreased from
time to time by the Company’s Chief Executive Officer
(“CEO”) and in consultation with the Company’s
Board of Directors or the Compensation Committee of such Board of
Directors (in either case, the “Board”) in their sole
discretion.
3. Performance-Based Bonus . You will be eligible to
participate in the Internap’s annual incentive plan as in
effect for any calendar year during the Term (“Incentive
Plan”), which is based on the achievement of company goals
established by senior management and approved by the Board of
Directors, as well as your individual performance. Your initial
bonus opportunity under the Incentive Plan will be up to 37% of
your annual base salary, subject to the terms of the Incentive Plan
and pro-rated for the length of your employment by Internap as a
portion of the full fiscal year.
4. Equity
Compensation. The Company and Executive acknowledge that the
CEO shall recommend to the Board that the Company issue to
Executive one or more options to purchase 30,000 shares of the
Company’s common stock, subject to the determination of the
Board in its sole discretion and to the terms and conditions of the
relevant option plan(s) and related stock option agreement(s) (the
“Options”).
5. Employee Benefits. Executive shall be entitled to
participate in all employee benefit, welfare and other plans and
programs generally applicable to employees of the Company. Except
as provided herein, the Company reserves the right to modify
Executive’s compensation and benefits from time to time, as
it deems necessary
6. Vacation. Executive shall accrue twenty
(20) days of combined vacation/sick leave annually. Executive
also shall receive three (3) personal days each
year. Executive
shall have the right to carry over unused vacation from any
one-year period to any other subsequent one-year period.
7. Nature
of Employment . Executive’s employment with the Company
shall be at-will. Both Executive and the Company shall have the
right to terminate the employment relationship at any time, with or
without cause, and with or without advance notice.
8. Severance Payments. Upon Executive’s
involuntary termination by the Company of employment without Cause
(as defined below), Executive shall receive a cash severance
payment equal to the product of (x) the number of days that
Executive is am employee of the Company, divided by 365 (provided
that the foregoing ratio shall never exceed one (1) and
(y) one-half of Executive’s then-current Base Salary.
Payment of such severance amounts shall be subject to standard
payroll tax withholdings and deductions. In addition to the
severance benefits provided above, upon Executive’s
involuntary termination of employment without Cause, all of
Executive’s unvested Options shall lapse and expire, and all
of Executive’s vested Options shall remain exercisable no
later than three months after the date of termination. No payment
or acceleration of Options shall be made pursuant to this
Section 8 unless prior to or concurrent with such payment a
valid release has been executed and delivered by Executive and
becomes effective in accordance with Section 11 hereof.
Notwithstanding the immediately preceding sentence, Executive shall
not be entitled to any benefits or rights under this Section 8
if Executive also is eligible for payments and/or benefits under
Section 9 hereof.
9. Change
in Control Payments and Acceleration . Upon Executive’s
involuntary termination of employment without Cause (as defined
below) or voluntary termination of employment for Good Reason, in
either case within 12 months after a Change in Control,
(i) the Company shall pay Executive a cash severance payment
equal to the sum of one-half of Executive’s then-current Base
Salary and maximum target Bonus and (ii) all of
Executive’s unvested Options shall become vested, free of
restrictions and immediately exercisable for the remaining term of
the relevant grant or award.
Payment of such
severance payments shall be subject to standard payroll tax
withholdings and deductions.
No payment or
acceleration of Options shall be made unless prior to or concurrent
with such payment a valid release has been executed and delivered
by Executive and becomes effective in accordance with
Section 11 hereof.
Executive will
continue to receive the healthcare and life insurance coverages in
effect on his date of termination for twenty-four (24) months
after the date of termination pursuant to this Section 9 just
as if he had remained an active employee of the Company, subject to
Executive paying the customary employee portion of such coverages,
provided that if the Company cannot continue to cover Executive
under its plans, the Company
will separately
provide Executive with comparable coverages or pay Executive in a
lump sum the costs of such coverages.
For purposes of
this Agreement, “Change in Control” shall mean the
happening of any of the following events:
(i) An
acquisition by any individual, entity or group (within the meaning
of Section 13 (d) (3) or 14 (d) (2) of the Exchange
Act) (an “Entity”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
30% or more of either (A) the then outstanding shares of
common stock of the Company (the “Outstanding Company Common
Stock”) or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding
Company Voting Securities”); excluding, however, the
following: (1) any acquisition directly from the Company,
other than an acquisition by virtue of the exercise of a conversion
privilege unless the security being so converted was itself
acquired directly from the Company, (2) any acquisition by the
Company, (3) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (4) any acquisition
by any corporation pursuant to a transaction which complies with
clauses (A), (B) and (C) of subsection (iii) of this
Section; (ii) A change in the composition of the Board such
that the individuals who, as of the Effective Date, constitute the
Board (such Board shall be hereinafter referred to as the
“Incumbent Board”), cease for any reason to constitute
at least a majority of the Board; provided, however, that for
purposes of this definition, any individual who becomes a member of
the Board subsequent to the Effective Date, whose election, or
nomination for election, by the Company’s stockholders was
approved by a vote of at least a majority of those individuals who
are members of the Board and who were also members of the Incumbent
Board (or deemed to be such pursuant to this proviso), shall be
considered as though such individual were a member of the Incumbent
Board; and provided, further however, that any such individual
whose initial a
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