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Exhibit 10.2
EMPLOYMENT AGREEMENT
Employment Agreement (this
"Agreement") dated as of October 12, 2006 (the "Effective
Date"), by and between Internap Network Services Corporation (the
"Company") and Philip Kaplan ("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 VitalSteam 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 $235,000 ("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
assumption of office occur
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