1999 NON-EMPLOYEE DIRECTORS' STOCK
OPTION PLAN
ADOPTED BY THE BOARD OF DIRECTORS
JULY 22, 1999
APPROVED BY STOCKHOLDERS AUGUST 23,
1999
EFFECTIVE DATE: JULY 22,
1999
TERMINATION DATE: JULY 21,
2009
1.
PURPOSES.
(a) Eligible
Option Recipients. The persons eligible to receive Options are the
Non-Employee Directors of the Company.
(b) Available
Options. The purpose of the Plan is to provide a means by which
Non-Employee Directors may be given an opportunity to benefit from
increases in value of the Common Stock through the granting of
Nonstatutory Stock Options.
(c) General
Purpose. The Company, by means of the Plan, seeks to retain the
services of its Non-Employee Directors, to secure and retain the
services of new Non-Employee Directors and to provide incentives
for such persons to exert maximum efforts for the success of the
Company and its Affiliates.
2.
DEFINITIONS.
(a) "Affiliate"
means any parent corporation or subsidiary corporation of the
Company, whether now or hereafter existing, as those terms are
defined in Sections 424(e) and (f), respectively, of the
Code.
(b) "Annual
Grant" means an Option granted annually to all Non-Employee
Directors who meet the specified criteria pursuant to Subsection
6(b) of the Plan.
(c) "Annual
Meeting" means the annual meeting of the stockholders of the
Company.
(d) "Board"
means the Board of Directors of the Company.
(e) "Code"
means the Internal Revenue Code of 1986, as amended.
(f) "Common
Stock" means the common stock of the Company.
(g) "Company"
means Internap Network Services Corporation, a Washington
corporation.
(h)
"Consultant" means any person, including an advisor, (i) engaged by
the Company or an Affiliate to render consulting or advisory
services and who is compensated for such services or (ii) who is a
member of the Board of Directors of an Affiliate. However, the term
"Consultant" shall not include either Directors of the Company who
are not compensated by the Company for their services as Directors
or Directors of the Company who are merely paid a director's fee by
the Company for their services as Directors.
(i) "Continuous
Service" means that the Optionholder's service with the Company or
an Affiliate, whether as an Employee, Director or Consultant, is
not interrupted or terminated. The Optionholder's Continuous
Service shall not be deemed to have terminated merely because of a
change in the capacity in which the Optionholder renders service to
the Company or an Affiliate as an Employee, Consultant or Director
or a change in the entity for which the Optionholder renders such
service, provided that there is no interruption or termination of
the Optionholder's Continuous Service. For example, a change in
status from a Non-Employee Director of the Company to a Consultant
of an Affiliate or an Employee of the Company will not constitute
an interruption of Continuous Service. The Board or the chief
executive officer of the Company, in that party's sole discretion,
may determine whether Continuous Service shall be considered
interrupted in the case of any leave of absence approved by that
party, including sick leave, military leave or any other personal
leave.
(j) "Director"
means a member of the Board of Directors of the Company.
(k)
"Disability" means the inability of a person, in the opinion of a
qualified physician acceptable to the Company, to perform the major
duties of that person's position with the Company or an Affiliate
of the Company because of the sickness or injury of the
person.
(l) "Employee"
means any person employed by the Company or an Affiliate. Mere
service as a Director or payment of a director's fee by the Company
or an Affiliate shall not be sufficient to constitute "employment"
by the Company or an Affiliate.
(m) "Exchange
Act" means the Securities Exchange Act of 1934, as
amended.
(n) "Fair
Market Value" means, as of any date, the value of the Common Stock
determined as follows:
(i) If the
Common Stock is listed on any established stock exchange or traded
on the NASDAQ National Market or the NASDAQ SmallCap Market, the
Fair Market Value of a share of Common Stock shall be the closing
sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or market (or the exchange or
market with the greatest volume of trading in the Common Stock) on
the last market trading day prior to the day of determination, as
reported in The Wall Street Journal or such other source as the
Board deems reliable.
(ii) In the
absence of such markets for the Common Stock, the Fair Market Value
shall be determined in good faith by the Board.
(o) "Initial
Grant" means an Option granted to a Non-Employee Director pursuant
to Subsection 6(a) of the Plan.
(p) "IPO Date"
means the effective date of the initial public offering of the
Common Stock.
(q)
"Non-Employee Director" means a Director who is not employed by the
Company or an Affiliate.
(r)
"Nonstatutory Stock Option" means an Option not intended to qualify
as an incentive stock option within the meaning of Section 422 of
the Code and the regulations promulgated thereunder.
(s) "Officer"
means a person who is an officer of the Company within the meaning
of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(t) "Option"
means a Nonstatutory Stock Option granted pursuant to the
Plan.
(u) "Option
Agreement" means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an individual
Option grant. Each Option Agreement shall be subject to the terms
and conditions of the Plan.
(v)
"Optionholder" means a person to whom an Option is granted pursuant
to the Plan or, if applicable, such other person who holds an
outstanding Option.
(w) "Plan"
means this Internap Network Services Corporation 1999 Non-Employee
Directors' Stock Option Plan.
(x) "Rule
16b-3" means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time.
(y) "Securities
Act" means the Securities Act of 1933, as amended.
3.
ADMINISTRATION.
(a)
Administration by Board. The Board shall administer the Plan. The
Board may not delegate administration of the Plan to a
committee.
(b) Powers of
Board. The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(i) To
determine the provisions of each Option to the extent not specified
in the Plan.
(ii) To
construe and interpret the Plan and Options granted under it, and
to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may
correct any defect, omission or inconsistency in the Plan or in any
Option Agreement, in a manner and to the extent it shall deem
necessary or expedient to make the Plan fully effective.
(iii) To amend
the Plan or an Option as provided in Section 12.
(iv) To
terminate or suspend the Plan as provided in Section 13.
(v) Generally,
to exercise such powers and to perform such acts as the Board deems
necessary or expedient to promote the best interests of the Company
which are not in conflict with the provisions of the
Plan.
4. SHARES
SUBJECT TO THE PLAN.
(a) Share
Reserve. Subject to the provisions of Section 11 relating to
adjustments upon changes in stock, the stock that may be issued
pursuant to Options shall not exceed in the aggregate five hundred
thousand (500,000) shares of Common Stock.
(b) Reversion
of Shares to the Share Reserve. If any Option shall for any reason
expire or otherwise terminate, in whole or in part, without having
been exercised in full, the stock not acquired under such Option
shall revert to and again become available for issuance under the
Plan.
(c) Source of
Shares. The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
5.
ELIGIBILITY.
Nondiscretionary Options as set forth in Section
6 shall be granted under the Plan to all Non-Employee
Directors.
6.
NON-DISCRETIONARY GRANTS.
(a) Initial
Grants. On the IPO Date, each person who is then a Non-Employee
Director shall automatically be granted an Initial Grant to
purchase forty thousand (40,000) shares of Common Stock on the
terms and conditions set forth herein. After the IPO Date, each
person who is elected or appointed for the first time to be a
Non-Employee Director shall automatically, upon the date of his or
her initial election or appointment to be a Non-Employee Director
by the Board or stockholders of the Company, be granted an Initial
Grant to purchase forty thousand (40,000) shares of Common Stock on
the terms and conditions set forth herein.
(b) Annual
Grants. On the day following each Annual Meeting commencing with
the Annual Meeting in 2000, each person who is then a Non-Employee
Director and has been a Non-Employee Director for at least six (6)
months automatically shall be granted an Annual Grant to purchase
ten thousand (10,000) shares of Common Stock on the terms and
conditions set forth herein.
7. OPTION
PROVISIONS.
Each Option
shall be in such form and shall contain such terms and conditions
as required by the Plan. Each Option shall contain such additional
terms and conditions, not inconsistent with the Plan, as the Board
sha
