Exhibit
10.29
EMPLOYMENT
AGREEMENT
Employment
Agreement (this "Agreement") dated as of June 15, 2005 (the
"Effective Date"), by and between Internap Network Services
Corporation (the "Company") and James Eric Klinker ("Executive")
(collectively the "Parties").
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1. Position and
Duties . Executive
shall serve as the Vice President of Engineering & Chief
Technology Officer for the Company, with such duties, authorities
and responsibilities as are commensurate with such position.
Executive shall report to the Company's Chief Executive Officer
(“CEO”) and shall work from the Company's offices in
Atlanta, Georgia.
2. Base
Salary. Executive
shall receive an annual base salary of $ 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 CEO in consultation with the Company's
Board of Directors or the Compensation Committee of such Board of
Directors (in either case, the "Board") in their sole
discretion.
3. Performance-Based
Bonus . Executive
shall participate in the Company’s Annual Incentive Plan
(“Bonus”) for Executive and other senior executive
officers. The Executive’s Bonus maximum target for 2005 shall
be 45% of Executive's Base Salary, depending on individual and
Company performance metrics. Performance metrics for and target
amount of the Bonus for 2006 and each subsequent calendar year
shall be established on or before March 31 of the year to which the
Bonus relates. The CEO, in consultation with the Board and in their
sole and reasonable discretion, shall determine, on or before March
31 of the year in which the Bonus would be payable, whether a Bonus
is payable and, if so, the amount of such Bonus. Unless otherwise
determined by the Board, all Bonus payments shall be made on the
Company's first regular payroll date following such determination
and shall be subject to standard payroll tax withholdings and
deductions. To be eligible for a Bonus, Executive must be
continuously employed by the Company through the date on which the
Bonus is paid. Executive recognizes and agrees that: (a) the
Company may in its sole discretion and with reasonable notice to
Executive determine that any Bonus, if payable, may be paid in
whole or in part in the Company’s common stock or other
equity securities, including restricted stock and stock options;
and (b) the Company may in its sole discretion suspend or
discontinue any bonus program at any time without any liability on
the part of the Company.
4. 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
5. 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.
6. 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.
7. Severance
Payments. Upon
Executive's involuntary termination by the Company of employment
without Cause (as defined below), Executive shall receive a cash
severance payment equal to the product of (x) the number of days
that Executive is an employee of the Company, divided by 365
(provided that the foregoing ratio shall never exceed one (1) and
(y) Executive’s then-current Base Salary. Payment of such
severance amounts shall be subject to standard payroll tax
withholdings and deductions. In addition to the
severance benefits provided above, upon Executive's involuntary
termination of employment without Cause, all of Executive’s
unvested Options and Additional Equity Compensation shall lapse and
expire, and all of Executive’s vested Options shall remain
exercisable no later than three months after the date of
termination. No payment or acceleration of Options or Additional
Equity Compensation shall be made pursuant to this Section 8
unless prior to or concurrent with such payment a valid release has
been executed and delivered by Executive and becomes effective in
accordance with Section 11 hereof. Notwithstanding the
immediately preceding sentence, Executive shall not be entitled to
any benefits or rights under this Section 8 if Executive also
is eligible for payments and/or benefits under Section 9
hereof.
8. Change
in Control Payments and Acceleration . Upon Executive's involuntary termination of
employment without Cause (as defined below) or voluntary
termination of employment for Good Reason, in either case within 12
months after a Change in
Control, (i) the Company shall pay Executive a cash severance
payment equal to two times the sum of Executive's then-current Base
Salary and maximum target Bonus and (ii) all of Executive’s
unvested Options and Additional Equity Compensation shall become
vested, free of restrictions and immediately exercisable for the
remaining term of the relevant grant or award.
Payment of such severance payments shall be
subject to standard payroll tax withholdings and
deductions.
No payment or acceleration of Options or
Additional Equity Compensation shall be made unless prior to or
concurrent with such payment a valid release has been executed and
delivered by Executive and becomes effective in accordance with
Section 11 hereof.
Executive will continue to receive the
healthcare and life insurance coverages in effect on his date of
termination for twenty-four (24) months after the date of
termination pursuant to this Section 9 just as if he had remained
an active employee of the Company, subject to Executive paying the
customary employee portion of such coverages, provided that if the
Company cannot continue to cover Executive under its plans, the
Company will separately provide Executive with comparable coverages
or pay Executive in a lump sum the costs of such
coverages.
For purposes
of this Agreement, "Change in Control” shall mean the
happening of any of the following events:
(i) An
acquisition by any individual, entity or group (within the meaning
of Section 13 (d) (3) or 14 (d) (2) of the Exchange Act) (an
"Entity") of beneficial
ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of 30% or more of either (A) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common
Stock") or (B) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting
Securities"); excluding, however, the following: (1) any
acquisition directly from the Company, other than an acquisition by
virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired directly from the
Company, (2) any acquisition by the Company, (3) any acquisition by
any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the
Company, or (4) any acquisition by any corporation pursuant to a
transaction which complies with clauses (A), (B) and (C) of
subsection (iii) of this Section;
(ii) A change
in the composition of the Board such that the individuals who, as
of the Effective Date, constitute the Board (such Board shall be
hereinafter referred to as the "Incumbent Board") 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 occurs as a
result of or in connection with either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual
or threatened solicitation of proxies or consents by or on behalf
of an Entity other than the Board shall not be so considered as a
member of the Incumbent Board;
(iii) The
approval by the stockholders of the Company of a merger,
reorganization or consolidation or sale or other disposition of all
or substantially all of the assets of the Company (each, a
"Corporate Transaction") or, if consummation of such Corporate
Transaction is subject, at the time of such approval by
stockholders, to the consent of any government or governmental
agency, the obtaining of such consent (either explicitly or
implicitly by consummation); excluding however, such a Corporate
Transaction pursuant to which (A) all or substantially all of the
individuals and entities who are the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Corporate Transaction will beneficially own, directly or
indirectly, more than 60% of, respectively, the outstanding shares
of common stock, and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation
resulting from such Corporate Transactio
