8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):

February 17, 2014

Internap Network Services Corporation

(Exact Name of Registrant as Specified in Charter)

Delaware (State or Other Jurisdiction of Incorporation)	001-31989 (Commission File Number)	91-2145721 (IRS Employer Identification Number)
One Ravinia Drive, Suite 1300, Atlanta, Georgia (Address of Principal Executive Offices)		30346 (Zip Code)

Registrant’s telephone number, including area code: (404) 302-9700

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Securities Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Securities Act (17 CFR 240.13e-2(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The following actions were taken by Internap Network Services Corporation (“our” or “we”):

Approval of Bonuses and Increases in Base Salary

On February 17, 2014, our compensation committee of the board of directors, in the case of named executive officers other than our Chief Executive Officer, and on February 18, 2014, our board of directors, in the case of our Chief Executive Officer, approved bonuses under our 2013 Short-Term Incentive Plan, which we previously filed as Exhibit 10.1 to our Current Report on Form 8-K with the Securities and Exchange Commission on February 25, 2013. These bonuses were awarded based upon achievement of corporate objectives. We will pay the bonuses in cash on March 7, 2014.

Name and Title	Bonus
J. Eric Cooney, Chief Executive Officer	$	184,388
Kevin M. Dotts, Chief Financial Officer		62,852
Steven A. Orchard, SVP and General Manager, Data Center and Network Services		32,632

On February 17, 2014, our compensation committee approved bonuses to certain employees, including named executive officers, who made significant contributions in the acquisition of iWeb Group, Inc. and the related credit facility. The following named executive officers received the listed bonuses: Mr. Dotts in the amount of $94,860 and Mr. Orchard in the amount of $80,184. We will pay the bonuses in cash on March 7, 2014.

In addition, our board of directors approved an increase in the base salary of Mr. Cooney from $600,000 to $620,000 and our compensation committee approved an increase in the base salary of Mr. Dotts from $316,200 to $325,686; and Mr. Orchard from $267,280 to $275,298, effective April 7, 2014.

Approval of Long-Term Incentive Grants

On February 17, 2014, our compensation committee, in the case of named executive officers other than our Chief Executive Officer, and on February 18, 2014, our board of directors, in the case of our Chief Executive Officer, approved long-term incentive grants based on the individual’s role and individual performance. Of each award, 70% of the total grant is in the form of stock options and 30% is in the form of time-based restricted common stock. The stock options vest 25% after one year and in equal monthly increments for three years thereafter. The time-based restricted common stock vests in four equal annual installments on the anniversary of the grant date. The options have a 10-year term and an exercise price of $7.93, the fair market value of our common stock on February 21, 2014, the grant date. The following grants were approved:

	Number of Awards (#)
Name and Title	Options		Restricted Stock
J. Eric Cooney, Chief Executive Officer		198,722	39,909
Kevin M. Dotts, Chief Financial Officer		82,746	16,618
Steven A. Orchard, SVP and General Manager, Data Center and Network Services		55,296	11,105

2014 Short-Term Incentive Plan

On February 17, 2014, our compensation committee approved the 2014 Short Term Incentive Plan. Under the plan, certain employees (including named executive officers) may be eligible for the award of a cash bonus after our 2014 fiscal year end. The cash bonus of each participant (other than our Chief Executive Officer, Chief Financial Officer and Senior Vice Presidents, which includes our named executive officers) will be based on achievement of corporate and personal objectives, with a target award level expressed as a percentage of salary. The cash bonus of our Chief Executive Officer, Chief Financial Officer and Senior Vice Presidents will be based on achievement of corporate objectives only, with a target award level expressed as a percentage of salary. The corporate objectives are based on revenue, earnings before interest, taxes, depreciation and amortization and bookings net of churn. The personal objectives are individualized for each participant below the level of Senior Vice President.

The table below identifies the target incentives as a percentage of base salary for named executive officers:

STI Participation Level	Target Incentive (% Salary)
CEO/CFO/SVP (including named executive officers)		Up to 100%

For named executive officers, the maximum bonus potential is up to two times the target incentive based on achievement of stretch corporate objectives. If a participant is no longer an employee on the date awards from the plan are paid, the participant will not be deemed to have earned an award and will not receive an award under the plan. If, before the date awards from the plan are paid, a participant has provided notice of resignation or we have notified a participant that his/her employment will terminate, the participant will not be deemed to have earned an award under the plan and will not receive an award under the plan. Our compensation committee may amend, modify, terminate or suspend operation of the plan at any time.

The above description is qualified in its entirety by reference to the full text of the 2014 Short Term Incentive Plan, which is being filed as Exhibit 10.1.

Item 9.01            Financial Statements and Exhibits.

(d)           Exhibits

The following exhibit is furnished with this Current Report on Form 8-K:

Exhibit No.	Description
10.1	2014 Short Term Incentive Plan.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	INTERNAP NETWORK SERVICES CORPORATION
Date: February 21, 2014	By:	/s/ J. Eric Cooney
		J. Eric Cooney
		Chief Executive Officer

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
10.1	2014 Short Term Incentive Plan.

EX-10.1

Exhibit 10.1

INTERNAP NETWORK SERVICES CORPORATION

2014 SHORT TERM INCENTIVE PLAN

Establishment of Plan

Internap Network Services Corporation (the “Company”) has established the 2014 Short Term Incentive Plan (the “2014 Plan”) to provide for the award of cash bonuses to eligible participants based, in part, upon the financial performance of the Company in the fiscal year ended December 31, 2014. The 2014 Plan supersedes all prior versions of any short term incentive plan or other similar bonus plan but does not supersede the Company’s Employment Security Plan or any Employment Security Agreement or any terms thereof.  

Purpose of 2014 Plan

The purpose of the 2014 Plan is to:

● Align participants’ actions with the accomplishment of key corporate financial and operational goals;

● Encourage and reward individuals, as applicable, for the achievement of specific personal and/or business unit objectives in support of the corporate financial and operational goals; and

● Provide a range of incentive compensation opportunities for each position.

Effective Date

The 2014 Plan is effective as of January 1, 2014 and will expire on December 31, 2014 if not sooner terminated as provided herein.

Administration

The Compensation Committee (the “Committee”) of the Board of Directors administers the 2014 Plan. The Committee may delegate any functions to designated individuals who may be employees of the Company.  Except as limited herein, the Committee has full authority and discretion to interpret the 2014 Plan and to make all other determinations deemed necessary or advisable for the administration of the 2014 Plan. All disputes associated with interpretation of the 2014 Plan or awards hereunder shall be submitted to the Senior Vice President of Human Resources.

Participation

Eligibility to participate in the 2014 Plan for Section 16 officers (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934) is at the discretion of the Committee.  Eligibility to participate in the 2014 Plan for all other employees is at the discretion and invitation of the Chief Executive Officer.  Employees participating in the 2014 Sales Incentive Plan for Commissionable Sales Professionals, or any other operational sales incentive Plan, are not eligible to participate in the 2014 Plan.

Employees joining the Company after January 1, 2014 may be eligible to participate in the 2014 Plan in the Committee’s discretion (in the case of Section 16 officers) or the Chief Executive Officer’s discretion (in the case of other employees). Any award made to an employee who participates for less than the full year will be prorated based on the employee’s partial year service.

Key Terms and Definitions

Awards are based on achievement of individual and/or corporate goals. Individual goals are specific and predefined for each participant (“Individual Targets”) below the level of Senior Vice President (SVP). Corporate goals are specific Bookings Net of Churn (BNoC), Revenue and EBITDA targets approved by the Committee (each, a “Corporate Financial Target”).

The split between Corporate Financial Targets and Individual Targets differs by position.  The following table reflects the weightings of each component for each position:

	STIP Incentive Compensation Weighting % By Position
Objective	CEO/CFO/SVP’s		Non-BU VP’s		BU VP’s & All other Staff
Corp. Financial Tgt: Bookings net of Churn		30%		20%		15%
Corp. Financial Tgt: Revenue		30%		20%		15%
Corp. Financial Tgt: EBITDA		40%		30%		20%
Individual Tgts: (1-3)		0%		30%		50%
Total at Target		100%		100%		100%

The table below identifies the target incentives as a percentage of Base Salary based on a participant’s position and the split between Corporate Financial Targets and Individual Targets.  At the CEO/CFO/SVP level, the maximum STIP payout can equal up to 2 times the target incentive based on the achievement of stretch Corporate Financial Targets.

Position Grouping	Target Incentive (Varies by Role)	Corporate Financial Targets	Individual Targets
CEO/CFO/SVP	Up to 100%	100%	n/a
Non- BU Vice Presidents	Up to 50%	70%	30%
Business Unit Vice Presidents	Up to 50%	50%	50%
Directors and other exempt employees	Up to 25%	50%	50%
Non-exempt employees	Up to 10%	Discretionary	Discretionary

Base Salary is defined as actual base salary earned during 2014, which would exclude any bonuses, incentives or other allowances which may have been earned or received during 2014.

Determination and Payment of Awards

The Committee has sole discretion to determine awards relative to Corporate Financial Targets for all participants after consideration of any recommendation by the Chief Executive Officer.  The Committee recommends to the full Board of Directors, for their approval, any award to the Chief Executive Officer.

Any awards of the Individual Target component for participants is based on management’s assessment of the level of achievement of the participant’s specific Individual Targets.

Manner and Timing of Awards

All awards granted pursuant to the 2014 Plan shall be paid in cash (local currency).  If the Committee determines to pay an award, the Company will make any such award not later than March 15, 2015.

Recoupment of Awards

If the Committee determines that any 2014 Plan participant has engaged in fraud or intentional misconduct that has caused a restatement of the Company’s financial statements, the Committee will review the STIP award received or to be received by that participant on the basis of the Company’s performance during the periods affected by the restatement.  If the STIP award would have been lower if it had been based on the restated results, the Committee may seek recoupment of the STIP award.

Termination of Employment

In order to earn an award, a participant must be employed by the Company on the date of award. If a participant is no longer an employee, for whatever reason, on the date awards from the 2014 Plan are paid, the participant shall not be deemed to have earned any award under the 2014 Plan and shall not receive any award under the 2014 Plan. If, before the date awards from the 2014 Plan are paid, a participant has provided notice of intent to terminate employment or the Company has notified a participant that the participant’s employment will terminate, the participant shall not be deemed to have earned any award under the 2014 Plan and shall not receive any award under the 2014 Plan.

If an employee dies or becomes disabled before the date awards from the 2014 Plan are paid, the Committee may, at its discretion, determine whether the participant has earned any award under the 2014 Plan.  If the Committee determines that such participant has earned an award and that the Company will pay an award, the Company will make any such award not later than March 15, 2014.

In no event will awards under this 2014 Plan be either postponed or accelerated in the event of termination of employment, except as provided herein.

Plan Termination and Amendment

The Committee may amend, modify, terminate or suspend operation of the 2014 Plan at any time. Notice of any such changes will be communicated to participants. In no event, however, will awards under the 2014 Plan be either postponed or accelerated in the event that the 2014 Plan is terminated.

General Provisions

Benefits Not Guaranteed. Neither the establishment of the 2014 Plan nor participation in the 2014 Plan shall provide any guarantee or other assurance that an award will be payable under the 2014 Plan. There is no obligation of uniformity of treatment of employees or participants under the 2014 Plan.

No Employment Right. Participation in the 2014 Plan does not constitute a commitment, guarantee or agreement that the Company will continue to employ any individual and this 2014 Plan shall not be construed or applied as an employment contract or obligation.

Governing Law. The validity, construction and effect of the 2014 Plan shall be determined in accordance with the laws of the State of Georgia without giving effect to conflicts of law principles.

Severability. The provisions of the 2014 Plan are severable. If any provision is determined to be unenforceable, in whole or in part, then such provision shall be modified so as to be enforceable to the maximum extent permitted by law. If such provision cannot be modified to be enforceable, the provision shall be severed from the 2014 to the extent unenforceable. The remaining provisions and any partially enforceable provisions shall remain in full force and effect.