Internap Corporation
Internap Corp (Form: DEF 14A, Received: 04/02/2015 12:20:21)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
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Internap Corporation
One Ravinia Drive, Suite 1300
Atlanta, Georgia 30346
NOTICE OF 2015 ANNUAL MEETING OF STOCKHOLDERS
To our Stockholders ,
We invite you to attend Internap’s 2015 Annual Meeting of Stockholders at the Crowne Plaza Atlanta Perimeter at Ravinia, 4355 Ashford Dunwoody Road, Dekalb Conference Room, Atlanta, Georgia 30346, on Friday, May 29, 2015, at 10:00 a.m. local time. At the meeting, stockholders will:
1.
vote on the election of the three director nominees named in this proxy statement for three-year terms expiring in 2018;
2.
vote on the ratification of the Audit Committee’s appointment of PricewaterhouseCoopers LLP as independent registered public accounting firm for our fiscal year ending December 31, 2015;
3.
vote on an advisory resolution approving compensation of our named executive officers; and
4.
transact such other business as may properly come before the annual meeting or any adjournment or postponement thereof.
You can vote at the annual meeting and any adjournment if you were a stockholder of record on March 30, 2015.
By order of the Board of Directors,
[MISSING IMAGE: SG_ERICCOONEY-BW.JPG]
J. Eric Cooney
Chief Executive Officer and President
Atlanta, Georgia
April 2, 2015
Your Vote is Important to Us. Even if You Plan to Attend the Meeting in Person,
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY OR
VOTE BY TELEPHONE OR THE INTERNET.
Important Notice Regarding the Availability of Proxy Materials for the Annual
Meeting of Stockholders to be Held on May 29, 2015.
Our proxy statement for the 2015 Annual Meeting of Stockholders and the Annual
Report to Stockholders for the fiscal year ended December 31, 2014 are available at
http://ir.internap.com/proxy14.cfm

INTERNAP CORPORATION
One Ravinia Drive, Suite 1300
Atlanta, Georgia 30346
2015 ANNUAL MEETING OF STOCKHOLDERS
May 29, 2015
PROXY STATEMENT
This proxy statement and enclosed proxy card are being furnished to you in connection with the solicitation of proxies by our Board of Directors for use at the annual meeting. Distribution of this proxy statement and enclosed proxy card to stockholders is scheduled to begin on or about April 2, 2015.
Information About the Proxy Materials and Our 2015 Annual Meeting of Stockholders
Q:
Why am I receiving these materials?
A:
Our Board of Directors is providing these proxy materials to you in connection with its solicitation of proxies for use at the Internap 2015 Annual Meeting of Stockholders, which will take place on May 29, 2015, at the Crowne Plaza Atlanta Perimeter at Ravinia, 4355 Ashford Dunwoody Road, Dekalb Conference Room, Atlanta, Georgia 30346, at 10:00 a.m. local time. You are invited to attend the annual meeting and are requested to vote upon the proposals described in this proxy statement.
Q:
What information is contained in these materials?
A:
The information included in this proxy statement relates to the proposals to be voted upon at the annual meeting, the voting process, the compensation of our directors and named executive officers and certain other important information. Our Annual Report to Stockholders for the year ended December 31, 2014, which includes our audited consolidated financial statements for the years ended December 31, 2014, 2013 and 2012, is included in these proxy materials. Your proxy, which you may use to vote, is also enclosed.
Q:
What proposals will be voted upon at the annual meeting?
A:
There are three proposals scheduled to be voted upon at the annual meeting:

election of the three director nominees named in this proxy statement for three-year terms expiring in 2018;

ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2015; and

advisory resolution approving compensation of our named executive officers.
In addition, we will consider and vote upon such other business as may properly come before the annual meeting. We are not currently aware of any other matters to be considered and voted upon at the meeting.
Q:
How does Internap’s Board of Directors recommend that I vote?
A:
Your Board of Directors recommends that you vote your shares “ FOR ” each of the named director nominees, “ FOR ” ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2015 and “ FOR ” the advisory resolution approving compensation of our named executive officers.
Q:
Who may vote?
A:
You may vote at the annual meeting or by proxy if you were a stockholder of record at the close of business on March 30, 2015. Each stockholder is entitled to one vote per share on each matter presented. As of March 30, 2015, there were 54,958,163 shares of our common stock outstanding.

Q:
How do I vote before the annual meeting?
A:
We offer the convenience of voting by mail-in proxy, telephone or the Internet as described in more detail below. See the enclosed proxy for voting instructions. If you properly sign and return the proxy in the form we have provided or properly vote by telephone or the Internet, your shares will be voted at the annual meeting and at any adjournment of that meeting.
Q:
What if I return my proxy but do not provide voting instructions?
A:
If you specify a choice, your proxy will be voted as specified. If you return a signed proxy but do not specify a choice, your shares will be voted “for” each of the named director nominees, “for” ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2015 and “for” the advisory resolution approving compensation of our named executive officers. In all cases, your proxy will be voted in the discretion of the individuals named as proxies on the proxy card with respect to any other matters that may come before the annual meeting.
Q:
Can I change my mind after I vote?
A:
You may revoke your proxy at any time before it is exercised by delivering written notice of revocation to our Corporate Secretary or by attending and voting at the annual meeting.
Q:
How can I vote my shares in person at the annual meeting?
A:
Shares held directly in your name as the stockholder of record may be voted in person at the annual meeting. If you choose to vote in person, please bring the enclosed proxy card and proof of identification. Even if you plan to attend the annual meeting in person, we recommend that you vote your shares in advance as described below so that your vote will be counted if you later decide not to attend the annual meeting. Shares held in “street name” through a brokerage account or by a bank or other nominee may be voted in person by you if you obtain a signed proxy from the record holder giving you the right to vote the shares.
Q:
What is the quorum requirement for the annual meeting?
A:
The presence in person or by proxy of the holders of a majority of the shares entitled to vote at the annual meeting is necessary to constitute a quorum. If a registered stockholder indicates on his or her proxy card that the stockholder wishes to abstain from voting, or a beneficial owner instructs its bank, broker or other nominee that the stockholder wishes to abstain from voting, these shares are considered present and entitled to vote at the annual meeting. These shares will count toward determining whether or not a quorum is present.
Q:
What is the voting requirement to approve each of the proposals?
A:
A plurality of the shares voting is required to elect directors. This means that the nominees who receive the most votes will be elected. In counting votes on the election of directors, only votes “for” or “withheld” affect the outcome. Broker non-votes (which are explained below) will be counted as not voted and will be deducted from the total shares of which a plurality is required. Each other matter requires the affirmative vote of a majority of the shares voting upon the particular proposal. In counting votes on these matters, abstentions and broker non-votes will not be counted as votes cast and therefore will have no effect on the outcome of a particular proposal.
Q:
What are broker non-votes and what effect do they have on the proposals?
A:
Generally, broker non-votes occur when shares held by a broker in “street name” for a beneficial owner are not voted with respect to a particular proposal because (a) the broker has not received voting instructions from the beneficial owner and (b) the broker lacks discretionary voting power to vote those shares.
If you do not vote your proxy and your shares are held in street name, your brokerage firm may either vote your shares on routine matters or leave your shares unvoted. On non-routine matters, if the brokerage firm has not received voting instructions from you, the brokerage firm cannot vote your shares on that proposal, which is considered a “broker non-vote.” Broker non-votes will be counted for purposes of establishing a quorum to conduct business at the annual meeting. The proposal for the ratification of the appointment of our independent registered public accounting firm is routine. All of the other proposals in this proxy statement are non-routine. Accordingly, brokers that do not receive instructions will be entitled to vote on the ratification of the appointment of our independent registered public accounting
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firm at the annual meeting, but may not vote on the election of directors or on any other proposal in this proxy statement. Therefore, we encourage you to sign and return your proxy, with voting instructions, before the annual meeting so that your shares will be represented and voted at the meeting even if you cannot attend in person.
Q:
What does it mean if I receive more than one proxy or voting instruction card?
A:
It means that your shares are registered differently or are in more than one account. Please provide voting instructions for all proxy and voting instruction cards you receive.
Q:
Where can I find the voting results of the annual meeting?
A:
We will announce preliminary voting results at the annual meeting and publish final results in a Current Report on Form 8-K within four business days after the date of the meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
Our Board of Directors currently consists of seven members. Our bylaws provide that the Board is divided into three classes, with each class to be as nearly equal in number as possible. Each class serves a term of office of three years, with the term of one class expiring at the annual meeting in each successive year.
The Board of Directors prides itself on its ability to recruit and retain directors who have the highest personal and professional integrity, have demonstrated exceptional ability and judgment and effectively serve our stockholders’ long-term interests. We seek to achieve an appropriate level of diversity in the membership of our Board and to assemble a broad range of skills, expertise, knowledge and contacts to benefit our business. The Nominations and Governance Committee, which is comprised of all independent members of the Board, and the full Board annually assess the current make-up of the Board, considering diversity across many dimensions, including gender, race, age, industry experience, functional areas (e.g., technology and finance), geographic scope, public and private company experience, academic background and director experience in the context of an assessment of the current and expected needs of the Board. The Nominations and Governance Committee reviews director candidates based on the Board’s needs as identified through this assessment and other factors, including their relative skills and characteristics, their exemplification of the highest standards of personal and professional integrity, their independence under listing standards of The NASDAQ Global Market (“Nasdaq”), their potential contribution to the composition and culture of the Board and their ability and willingness to actively participate in the Board and committee meetings and to otherwise devote sufficient time to their Board duties. In particular, the Board and the Nominations and Governance Committee believe that sound governance of our company in an increasingly complex marketplace requires a wide range of viewpoints, backgrounds, skills and experiences. Although the Board does not have a formal policy regarding Board diversity, the Board believes that having such diversity among its members enhances the Board’s ability to make fully informed, comprehensive decisions.
Among other things, the Board of Directors believes it is important to have individuals with one or a combination of the following skills and experiences on the Board:

Information Technology Infrastructure Services Experience . We provide information technology infrastructure services. Given the nature of our business, we believe it is important for members of the Board collectively to have experience in the industry in which we operate to provide insights into areas that are critical to our success.

Leadership Experience . The Board believes that directors with significant leadership experience, including chief executive officer, chief financial officer, chief operating officer and chief technology officer experience, provide it with special insights, including organization development and leadership practices, and individuals with this experience help the company identify and develop its own leadership talent. They demonstrate a practical understanding of organizations, process, strategy, risk management and the methods to drive change and growth. These individuals also provide the company with a valuable network of contacts and relationships.

Finance Experience . The company uses financial metrics in managing its overall operations and the operations of its business units. The company and its stockholders value accurate and insightful financial tracking and reporting. The Board seeks directors that understand finance and financial reporting processes, including directors who qualify as audit committee financial experts. Experience as members of audit committees of other boards of directors also gives directors insight into best audit committee practices.
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Public and Private Company Experience . The company has been listed on Nasdaq since 1996. Although the company’s business units operate as part of a public company, management expects them to drive growth in their business units using the entrepreneurial spirit of private company leadership. The Board believes it is important to have directors who are familiar with the regulatory requirements and environment for publicly traded companies, and to have directors who have experience applying an entrepreneurial focus to building a company or a business unit.
We believe that our Board of Directors collectively possesses these types of experience. Below is a summary of each director’s most relevant experience.
As recommended by the Nominations and Governance Committee, our Board of Directors has nominated Charles B. Coe, J. Eric Cooney and Patricia L. Higgins as Class I directors for terms expiring at the 2018 annual meeting of stockholders. Each proposed nominee is willing to serve as a director if elected. However, if a nominee is unable to serve or is otherwise unavailable for election, which is not contemplated, our incumbent Board may or may not select a substitute nominee. If a substitute nominee is selected, your shares will be voted for the substitute nominee (unless you give other instructions). If a substitute nominee is not selected, your shares will be voted for the remaining nominee. Proxies will not be voted for more than three nominees.
Biographical information for each nominee and each current director who will continue to serve after the annual meeting is presented below.
Nominees for Terms Expiring in 2018 (Class I)
Charles B. Coe , 67, has served as a director since 2003. Mr. Coe is a 28-year veteran of the telecommunications industry, including 15 years with BellSouth Corporation. Mr. Coe brings a wealth of management, leadership and business skills from his professional experience as well as his service on another public company board. During his tenure at BellSouth, Mr. Coe served as President of BellSouth Network Services, President of BellSouth Telecommunications, President of BellSouth International and Group President of Customer Operations for BellSouth Telecommunications. Previously, Mr. Coe served in various management positions with AT&T Communications and American Telesystems Corporation. Mr. Coe is currently a director of Dycom Industries, Inc. and Amerisure Mutual Insurance Company. Mr. Coe holds a M.B.A. from Georgia State University and a B.S. from The Citadel. Mr. Coe’s background and skills qualify him to chair our Compensation Committee.
J. Eric Cooney , 49, has been our Chief Executive Officer and President and a director since 2009. Mr. Cooney brings valuable experience creating stockholder value as a public-company Chief Executive Officer in the telecommunications, media and technology industry. Further, Mr. Cooney’s practical experience includes conceiving and executing business turnarounds, leading global organizations, executing buy-side and sell-side mergers and acquisitions transactions and rebuilding sales and engineering teams. Mr. Cooney joined the global digital video business of NDS, Inc. (a News Corporation company) in 1997, which was acquired by TANDBERG Television, in 1999. Mr. Cooney held a number of positions including Vice President/​General Manager Americas and Chief Operating Officer, before assuming his role as President and Chief Executive Officer of TANDBERG Television in 2003. TANDBERG Television was acquired by the Ericsson Group in 2007 and Mr. Cooney continued his role as Chief Executive Officer of the television business unit within Ericsson until he joined our company in 2009. Prior to his career in the digital video industry, Mr. Cooney spent several years working in systems engineering and sales in the computer process control industry and also spent five years as a U.S. Naval officer. Mr. Cooney received post graduate education in Nuclear Engineering from the U.S. Navy and holds a B.S. from the University of Rochester and an M.B.A. from the University of Southern California.
Patricia L. Higgins , 65, has served as a director since 2004. Ms. Higgins has over 30 years of experience in the telecommunications industry, including experience as Chief Executive Officer in the colocation industry and as Chief Information Officer for a Fortune 100 company. Ms. Higgins brings leadership, business and management skills developed as an executive and director of other public companies, including serving as lead director and chairwoman of audit, compensation, finance, governance and corporate responsibility committees. From 2000 until her retirement in 2004, Ms. Higgins served as President, Chief Executive Officer and a member of the board of directors of Switch & Data Facilities Company, Inc., a provider of neutral interconnection and colocation services. From 1999 to 2000, Ms. Higgins served as Executive Vice President of the Gartner Group and Chairwoman and Chief Executive Officer of The Research Board, a segment of the Gartner Group, a consulting and research services company for information technology. From 1997 to 1999, Ms. Higgins was the Chief Information Officer of Alcoa Inc., and from 1995 to 1997, she served as Vice President and President (Communications Market Business Unit) of UNISYS Corporation. From 1977 to 1995, Ms. Higgins served in various managerial positions, including as Corporate Vice President and Group Vice President (State of New York) for Verizon (NYNEX) and Vice President, International Sales Operations (Lucent) for AT&T Corporation/Lucent. Ms. Higgins currently serves on the boards of directors
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of The Travelers Companies, Inc.; Barnes & Noble, Inc.; and Dycom Industries, Inc. Ms. Higgins also served as a director of Visteon Corporation from 2004 to 2010; Delta Airlines, Inc. from 2005 until 2007; SpectraSite, Inc. from 2004 until 2005 and The Williams Companies, Inc. from 1995 to 2000. Ms. Higgins holds a B.A. degree from Montclair State University and attended Harvard Business School’s Advanced Management Program. Ms. Higgins background and skills qualify her to chair our Nominations and Governance Committee.
Your Board of Directors unanimously recommends that you vote FOR each of the above-listed nominees.
Continuing Directors with Terms Expiring in 2016 (Class II)
Gary M. Pfeiffer , 65, has served as a director since 2007. Mr. Pfeiffer’s extensive experience includes public company officer, finance and accounting experience, corporate leadership experience, international operations experience, public sector experience as well as service on the boards of directors of other public companies, including service as non-executive chairman of the board of directors and chairman of audit, compensation and executive committees. This experience includes services as Chief Financial Officer and in other senior finance roles and in senior roles involving executive management during his more than 32 years with E. I. du Pont de Nemours and Company (DuPont), a large, complex, technology-based, multinational science-based products and services company. During his career with DuPont, Mr. Pfeiffer held a variety of financial and business leadership positions in the United States, Brazil and Japan. From 1997 to 2006, Mr. Pfeiffer served as Senior Vice President and Chief Financial Officer of DuPont. Mr. Pfeiffer also served as Secretary of Finance for the State of Delaware from January 2009 through June 2009. Mr. Pfeiffer is a member of the boards of directors of Quest Diagnostics, Inc. and Solazyme, Inc. Mr. Pfeiffer also is non-executive Chairman of the board of directors of Christiana Care Health System, a not-for-profit regional hospital system. Mr. Pfeiffer previously served as a director of The Talbots, Inc. from 2004 to May 2012, having last served as its non-executive Chairman of the board of directors. Mr. Pfeiffer holds a B.A. and an M.B.A. from the College of William and Mary in Virginia. Mr. Pfeiffer’s background and skills qualify him to chair our Audit Committee and to serve as our Audit Committee financial expert.
Michael A. Ruffolo , 53, has served as a director since 2010. Mr. Ruffolo has more than 28 years of broad business experience, including eight years as a technology-company Chief Executive Officer, service as a Chief Information Officer of a Fortune 500 company as well as Chief Operating Officer of an Internet services company that experienced significant turnaround growth during his tenure. These varied positions provide Mr. Ruffolo with insight into various areas of our business, including sales, marketing, information technology and operations. In addition to his business experience, Mr. Ruffolo has served as a board member of other public companies as well as chairman of a compensation committee and executive chairman of a private company, all of which makes him a valuable member of our Board of Directors. Mr. Ruffolo served as Chief Executive Officer and President of Crossbeam Systems, Inc., a network security platform provider from 2010 to 2012. From 2004 to 2010, Mr. Ruffolo served as Chairman and Chief Executive Officer of Liquid Machines, Inc., a provider of enterprise rights management solutions. Mr. Ruffolo served as Executive Vice President and Chief Operating Officer of Akamai Technologies, Inc. from 2001 until 2004. From 2000 to 2001, Mr. Ruffolo served as Executive Vice President of Global Sales, Services and Marketing of EMC Corporation. From 1998 to 1999, Mr. Ruffolo served as President of the Document Solutions Group at Xerox Corporation. From 1988 to 1998, Mr. Ruffolo served in various capacities at NCR Corporation, a global technology company, including Vice President and Chief Information Officer from 1996 to 1998. Mr. Ruffolo is executive chairman of the board of directors of Edgeware and serves as a director of a private company. Mr. Ruffolo served as a director of Pomeroy IT Solutions, Inc. from 2007 to 2009. Mr. Ruffolo holds an M.B.A. from Harvard Graduate School of Business Administration and a B.S. from the University of Dayton. Mr. Ruffolo also has post graduate education in advanced management from the European Institute of International Business in Fountainebleau, France.
Continuing Directors with Terms Expiring in 2017 (Class III)
Daniel C. Stanzione , 69, has served as a director since 2004 and our non-executive Chairman since 2009. Dr. Stanzione brings more than 30 years of experience in technology and communications companies, including service as Chief Operating Officer, Chief Technology Officer and general manager of a large telecommunications company. Dr. Stanzione’s business management, leadership and problem-solving skills developed as an executive and director of other public and private companies, and specific experience in various areas including technology, corporate governance, accounting and finance, brings valuable skills to our Board of Directors. Dr. Stanzione, an independent consultant, is President Emeritus of Bell Laboratories. Dr. Stanzione retired in 2000 from Lucent Technologies Inc., where he served as Chief Operating Officer and as President of Bell Laboratories. At Lucent’s formation in 1995, Dr. Stanzione was President of Network Systems, Lucent’s largest business unit, which sold products and services to telecommunication service providers around the world. Dr. Stanzione is the non-executive Chairman of the board of directors of Quest Diagnostics Inc., having previously served as its Lead Independent Director, and a director of a
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private company. Dr. Stanzione previously served as a director of Avaya Inc. from 2000 until 2007 and on various private company boards. Dr. Stanzione holds a B.S. in Electrical Engineering, a M.S. in Environmental Systems Engineering and a Ph.D. in Electrical and Computer Engineering, all from Clemson University.
Debora J. Wilson , 57, has served as a director since 2010. Ms. Wilson brings more than 30 years of experience managing key operational functions including sales, marketing, product development and management, business development, technology, human resources and finance/accounting. Ms. Wilson gained valuable executive management, business and leadership skills during her service as Chief Executive Officer of a technology-driven company. Ms. Wilson also brings in-depth knowledge of corporate governance and finance matters based on her experience as a director of several public and private company boards of directors. Ms. Wilson served as President and Chief Executive Officer of The Weather Channel from 2004 to 2009 and in other positions including Senior Vice President, Executive Vice President and Chief Operating Officer from 1994 to 2004. Before joining The Weather Channel, Ms. Wilson spent 15 years in the telecommunications industry at Bell Atlantic (now Verizon) and held management positions in network operations and new product development. Ms. Wilson is a member of the boards of directors of Markel Corporation and ARRIS Group, Inc. Ms. Wilson holds a B.S. in Business Administration from George Mason University in Virginia.
BOARD AND COMMITTEE MEMBERSHIP AND MEETINGS
Our stockholders elect the Board of Directors to oversee management of our company. The Board delegates authority to the Chief Executive Officer and other executive officers to pursue the company’s mission and oversees the Chief Executive Officer’s and executive officers’ conduct of our business. In addition to its general oversight function, the Board reviews and assesses the company’s strategic and business planning and the executive officers’ approach to addressing significant risks and has additional responsibilities including the following:

reviewing and approving the company’s key objectives and strategic business plans and monitoring implementation of those plans and the company’s success in meeting identified objectives;

reviewing the company’s financial objectives and major corporate plans, business strategies and actions;

approving the company’s annual corporate budget and major capital expenditures and purchase commitments;

selecting, evaluating and compensating the Chief Executive Officer and overseeing Chief Executive Officer succession planning;

providing advice and oversight regarding the selection, evaluation, development and compensation of executive officers;

reviewing significant risks confronting our company and alternatives for their mitigation; and

assessing whether adequate policies and procedures are in place to safeguard the integrity of our business operations and financial reporting and to promote compliance with applicable laws and regulations, and monitoring management’s administration of those policies and procedures.
During 2014, our Board of Directors held nine meetings. In 2014, each director attended the 2014 Annual Meeting of Stockholders in person and all directors attended at least 75% of the meetings of the Board and the committees on which they served. We have three standing committees of the Board: the Audit Committee, the Compensation Committee and the Nominations and Governance Committee. Members of each committee are appointed by the Board and the authority, duties and responsibilities of each committee are governed by written charters approved by the Board. These charters can be found in the “Corporate Governance” section on the Investor Relations page of our website at www.internap.com . In addition to regular meetings of the Board and committees, we have regular scheduled executive sessions for non-management directors.
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The current membership for each of the standing committees is as follows:
Audit Committee
Compensation Committee
Nominations and
Governance Committee
Gary M. Pfeiffer (Chair) Charles B. Coe (Chair) Patricia L. Higgins (Chair)
Daniel C. Stanzione Patricia L. Higgins Charles B. Coe
Debora J. Wilson Michael A. Ruffolo Gary M. Pfeiffer
Michael A. Ruffolo
Daniel C. Stanzione
Debora J. Wilson
Audit Committee
The Board of Directors has determined that all members of the Audit Committee are independent as defined by Nasdaq rules, the Securities Exchange Act of 1934, as amended, and the rules of the Securities and Exchange Commission (“SEC”), as applicable to audit committee members. The Board has determined that Mr. Pfeiffer, the committee Chairman, is an “audit committee financial expert” under rules of the SEC. The Audit Committee met eight times in 2014. The Audit Committee:

appoints, retains, compensates, oversees, evaluates and, if appropriate, terminates our independent registered public accounting firm;

annually reviews the performance, effectiveness, objectivity and independence of our independent registered public accounting firm;

establishes procedures for the receipt, retention and treatment of complaints regarding accounting and auditing matters;

reviews with our independent registered public accounting firm the scope and results of its audit;

approves all audit services and pre-approves all permissible non-audit services to be performed by our independent registered public accounting firm;

assesses and provides oversight to management relating to identification and evaluation of major risks inherent in our business and the control processes with respect to such risks;

oversees the financial reporting process and discusses with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC;

reviews and monitors our accounting principles, policies and financial and accounting processes and controls; and

oversees our internal audit function and reviews and approves the annual internal audit plan.
Compensation Committee
The Board of Directors has determined that all members of the Compensation Committee are independent as defined by Nasdaq rules, the Securities Exchange Act of 1934, as amended, and rules of the SEC, as applicable to compensation committee members. The Compensation Committee met nine times during 2014. The Compensation Committee:

assists the Board in discharging its responsibilities relating to executive compensation and fulfilling its responsibilities relating to our compensation and benefit programs and policies;

oversees the overall compensation structure, policies and programs, and assesses whether the compensation structure establishes appropriate incentives for executive officers and employees;

administers and makes recommendations with respect to our incentive compensation plans, including equity-based incentive plans;

reviews and approves the compensation of our executive officers, including bonuses and equity compensation;
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reviews and approves corporate goals relevant to executive officers, evaluates the performance of such executive officers in light of these goals and approves the compensation of the executive officers based on the evaluation (other than for the Chief Executive Officer, whose compensation is recommended by the Compensation Committee for approval by the Board);

reviews and discusses with management our Compensation Discussion and Analysis and related disclosures required by the rules of the SEC and recommends to the Board whether such disclosures should be included in our proxy statement;

reviews and recommends employment agreements and severance arrangements for executive officers, including change in control provisions;

reviews the compensation of directors for service on the Board and committees and makes recommendations to the Board regarding such compensation; and

engages, determines compensation for and oversees the work of any consultants and advisors retained by the Compensation Committee, at the expense of the company, and oversees compliance with applicable requirements relating to the independence of such consultants or advisors.
See the “Compensation Discussion and Analysis” section below for more information regarding the Compensation Committee’s processes and procedures.
Nominations and Governance Committee
The Board of Directors has determined that all members of the Nominations and Governance Committee are independent as defined by Nasdaq rules, as applicable to nominating committee members. The Nominations and Governance Committee met four times during 2014. The Nominations and Governance Committee:

assists the Board in fulfilling its responsibilities on matters and issues related to our corporate governance practices;

in conjunction with the Board, establishes qualification standards for membership on the Board and its committees;

leads the search for individuals qualified to become members of the Board, reviews the qualifications of candidates for election to the Board and assesses the contributions and independence of incumbent directors eligible to stand for re-election to the Board;

selects and recommends to the Board the nominees for election or re-election by the stockholders at the annual meeting, and selects and recommends to the Board individuals to fill vacancies and newly created directorships on the Board;

develops and recommends to the Board corporate governance guidelines, reviews the guidelines on an annual basis and recommends any changes to the guidelines as necessary;

establishes and recommends to the Board guidelines, in accordance with applicable rules and regulations, to be applied when assessing the independence of directors;

reviews and approves related person transactions, as defined in applicable SEC rules, and establishes policies and procedures for the review, approval and ratification of related person transactions;

annually reviews and makes recommendations to the Board concerning the structure, composition and functioning of the Board and its committees and recommends to the Board directors to serve as committee members and chairpersons;

reviews directorships in other public companies held by or offered to directors;

assists the Board in developing and evaluating candidates for executive positions, including the Chief Executive Officer, and overseeing development of executive succession plans;

develops and recommends to the Board for its approval an annual self-evaluation process for the Board and its committees and oversees the evaluation process; and

reviews and reports on all matters generally relating to corporate governance.
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Compensation Committee Interlocks and Insider Participation
Our Compensation Committee members are Charles B. Coe, Patricia L. Higgins and Michael A. Ruffolo. No member of the Compensation Committee is a current or former executive officer or employee of our company. None of our executive officers served and currently none of them serves on the board of directors or compensation committee of any other entity with executive officers who have served on our Board of Directors or Compensation Committee.
CORPORATE GOVERNANCE
Our Board of Directors has adopted Corporate Governance Guidelines that outline the general duties and functions of the Board and management and set forth general principles regarding Board composition, independence, Board meetings and responsibilities, Board committees, annual performance evaluations for the Board and our Chief Executive Officer and management succession and development. The Corporate Governance Guidelines are attached to the charter of the Nominations and Governance Committee, which can be found in the “Corporate Governance” section on the Investor Relations page of our website at www.internap.com .
Our Corporate Governance Guidelines assist our Board of Directors in fulfilling its responsibilities to stockholders and provide a framework for the Board’s oversight responsibilities regarding our business. Our Corporate Governance Guidelines are dynamic and have been developed and revised to reflect changing laws, regulations and good corporate governance practices. The guidelines also provide guidance and transparency to management, employees and stockholders regarding the Board’s philosophy, high ethical standards, expectations for conducting business and decision-making processes.
The following is a summary of certain of our policies and guidelines relating to corporate governance. You may access complete current copies of our Code of Conduct, Corporate Governance Guidelines, Audit Committee Charter, Compensation Committee Charter and Nominations and Governance Committee Charter in the “Corporate Governance” section on the Investor Relations page of our website at www.internap.com . Each of these is also available in print to any stockholder upon request to our Corporate Secretary.
Identification and Evaluation of Director Candidates
The Board of Directors prides itself on its ability to recruit and retain directors who have a diversity of experience, who have the highest personal and professional integrity, who have demonstrated exceptional ability and judgment and who are effective (in conjunction with the other members of the Board) in collectively serving the long-term interests of our stockholders.
The Nominations and Governance Committee of the Board of Directors acts as the Board’s nominating committee. All members of the Nominations and Governance Committee are independent as defined by Nasdaq rules. The Nominations and Governance Committee seeks individuals qualified to become directors and recommends candidates for all director openings to the full Board. For a discussion of the Board’s membership criteria and how the company seeks to achieve diversity in Board membership and to attract directors with a broad range of skills, expertise, knowledge and contacts to benefit our business, see “Proposal 1 — Election of Directors.” The Nominations and Governance Committee considers director candidates in anticipation of upcoming director elections and other potential or expected Board vacancies.
The Nominations and Governance Committee considers director candidates suggested by directors, executive officers and stockholders and evaluates all nominees for director in the same manner. Stockholders may recommend individual nominees for consideration by the Nominations and Governance Committee by communicating with the committee as discussed below under “Stockholder Communications with the Board of Directors.” From time-to-time, the Nominations and Governance Committee may retain a third party search firm to identify director candidates and has sole authority to select the search firm and approve the terms and fees of any director search engagement.
Stockholder Nominations
Stockholders who wish to recommend nominees for consideration by the Nominations and Governance Committee must submit their nominations in writing to our Corporate Secretary. Submissions must include sufficient biographical information concerning the recommended individual, including age, five-year employment history with employer names and a description of the employer’s business, whether such individual can read and comprehend basic financial statements and other board memberships, if any, held by the recommended individual. The submission must be accompanied by a written consent of the individual to stand for election if nominated by the Board of Directors and to serve if elected by the stockholders. The Nominations and Governance Committee may consider such stockholder recommendations when it evaluates and recommends
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nominees to the full Board for submission to the stockholders at each annual meeting. Stockholder nominations made in accordance with these procedures and requirements must be addressed to the attention of Tashia L. Rivard, Corporate Secretary, Internap Corporation, One Ravinia Drive, Suite 1300, Atlanta, Georgia 30346.
In addition, stockholders may nominate directors for election without consideration by the Nominations and Governance Committee. Any stockholder may nominate an individual by complying with the eligibility, advance notice and other provisions set forth in our bylaws. A written notice of nomination must be received by our Corporate Secretary at our executive offices in Atlanta, Georgia, not less than 90 nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting, except in certain circumstances. For purposes of our annual meeting to be held in 2016, such notice must be received not later than February 29, 2016 and not earlier than January 29, 2016. You should address any stockholder nomination to the attention of Tashia L. Rivard, Corporate Secretary, Internap Corporation, One Ravinia Drive, Suite 1300, Atlanta, Georgia 30346 and include the information and comply with the requirements set forth in our bylaws. Our bylaws provide that any notice of nomination for director must describe various matters regarding the nominee and the stockholder including, among other things, the name, address, class and number of our shares that are owned beneficially and of record, any relevant agreements, arrangements or understandings between the stockholder and any affiliates or associates, and any arrangements having the effect of mitigating a decrease in our share price or affecting the voting power of the stockholder, including derivative positions.
Our bylaws contain specific eligibility requirements that each nominee for director must satisfy. Each nominee must:

complete and return a written questionnaire with respect to the background and qualifications of such nominee and the background of any other person or entity on whose behalf the nomination is being made; and

provide a written representation and agreement that the nominee would comply with applicable law and our policies and guidelines if elected as a director and that the nominee is not and will not become a party to: (a) any voting commitment that has not been disclosed to us or that could limit the nominee’s ability to comply with applicable fiduciary duties; and (b) any agreement, arrangement or understanding with any person or entity other than us regarding indirect compensation, reimbursement or indemnification in connection with service as a director.
Board Leadership Structure
Our Board of Directors does not have a formal policy with respect to whether the Chief Executive Officer should also serve as Chairman of the Board. Our Board makes the decision regarding leadership structure based on its evaluation of the experience, skills and personal interaction between persons in leadership roles as well as the needs of our company at any point in time. When making this decision, the Board considers factors such as:

the person filling each role and his or her experience at the company and/or in the information technology infrastructure services industry;

the composition, independence and effectiveness of the entire Board;

other corporate governance structures in place;

the compensation practices used to motivate our executive leadership team;

our leadership succession plan; and

the competitive and economic environment facing the company.
The Board periodically reviews its leadership structure to ensure that it remains the optimal structure for our company and our stockholders.
Since 2002, we have had different individuals serving as our Chairman of the Board of Directors and Chief Executive Officer. Currently, Daniel C. Stanzione is our Chairman and J. Eric Cooney is our Chief Executive Officer. As Chairman, Dr. Stanzione leads the Board in its role to provide general oversight of strategic planning for the company and to provide guidance and support for the Chief Executive Officer. Further, the Chairman sets the agenda for and presides over meetings of the Board. As Chief Executive Officer, Mr. Cooney is responsible for developing and executing the corporate strategy, as well as for overseeing the day-to-day operations and performance of the company.
We believe that separating the roles of Chairman and Chief Executive Officer represents an appropriate allocation of roles and responsibilities at this time given, among other things, the benefits of Dr. Stanzione’s experience, independence and tenure as a director of the company, which dates back to 2004. Mr. Cooney is well-positioned as the leader to develop and execute the company’s corporate strategy and is free to focus on day-to-day challenges and opportunities.
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The company believes this separation of responsibility is appropriate to provide independent Board oversight of and direction for the company’s executive leadership team, led by Mr. Cooney. Further, the company believes that having an independent Chairman provides for more effective monitoring and objective evaluation of the Chief Executive Officer’s performance, which enables more direct accountability for the Chief Executive Officer’s performance.
Our Corporate Governance Guidelines provide that if our Chairman is not independent, the Board of Directors may designate a Lead Director who will be independent. The Board, however, has not determined it necessary to designate a Lead Director as the company feels our current structure, as described above, functions well and provides the necessary separation of roles.
Independence
The Board of Directors annually assesses the independence of all directors. No director qualifies as “independent” unless the Board affirmatively determines that the director is independent under the listing standards of Nasdaq. Our Corporate Governance Guidelines require that a majority of our directors be independent. Our Board of Directors believes that the independence of directors and committee members is important to assure that the Board and its committees operate in the best interests of the stockholders and to avoid any appearance of conflict of interest.
Under Nasdaq standards, our Board of Directors has determined that the following six directors are independent: Charles B. Coe, Patricia L. Higgins, Gary M. Pfeiffer, Michael A. Ruffolo, Daniel C. Stanzione and Debora J. Wilson. Mr. Cooney is not independent because he currently serves as our Chief Executive Officer and President. For four years, we have had not more than one active or former management employee serving as a director. In that regard, Mr. Cooney, our Chief Executive Officer and President, serves as a director.
Risk Oversight by Our Board of Directors
While risk management is primarily the responsibility of our management team, our Board of Directors is responsible for the overall supervision of our risk management activities. The Board implements its risk oversight function both at the full Board level and through delegation to various committees. These committees meet regularly and report back to the full Board. The Audit Committee has primary oversight responsibility not only for financial reporting with respect to our major financial exposures and the steps management has taken to monitor and control such exposures, but also for the effectiveness of management’s enterprise risk management process that monitors and manages key business risks facing our company. The Audit Committee also oversees our procedures for the receipt, retention and treatment of complaints relating to accounting and auditing matters and oversees management of our legal and regulatory compliance systems. The Compensation Committee oversees risks relating to our compensation plans and programs. The Nominations and Governance Committee regularly reviews our governance structure, practices and policies to improve governance of our company and our engagement efforts with our stockholders with a goal to promote the long-term interests of our stockholders.
Management provides updates throughout the year to the respective committees regarding the management of the risks they oversee and each of these committees reports on risk to the full Board of Directors at regular meetings of the Board. The Board periodically reviews the allocation of risk responsibility among the Board’s committees and implements any changes that it deems appropriate. In addition to the reports from the committees, the Board receives presentations throughout the year from various department and business unit leaders that include discussion of significant risks as appropriate. At each regularly-scheduled Board meeting, the Chairman and Chief Executive Officer address, in a director-only session, matters of particular importance or concern, including any significant areas of risk that require Board attention. Additionally, through dedicated sessions focusing entirely on corporate strategy, the full Board reviews in detail the company’s short- and long-term strategies, including consideration of significant risks facing us and how the risks could impact our business.
Our Vice President of Internal Audit coordinates the day-to-day risk management process for our company and reports directly to the Chief Financial Officer and to the Audit Committee. The Vice President of Internal Audit updates the Audit Committee at least quarterly in regular and executive sessions and annually updates the full Board regarding the company’s risk analyses and assessments and risk mitigation strategies and activities. The Vice President of Internal Audit also updates the Compensation Committee annually regarding the risk of our compensation plans and programs.
We believe that our approach to risk oversight, as described above, optimizes our ability to assess inter-relationships among the various risks, make informed cost-benefit decisions and approach emerging risks in a proactive manner. We also believe that our risk structure complements the current leadership structure of our Board of Directors, as it allows our independent directors, through the three fully-independent standing Board committees, to exercise effective oversight of the actions of management in identifying risks and implementing effective risk management policies and controls.
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We conducted a risk assessment of our 2014 compensation plans and programs to identify potential risks associated with the design of the plans and programs and assess the controls in place to mitigate risks, if any, to an acceptable level. Based on this assessment, management has concluded that our compensation plans and programs do not contain risks that are reasonably likely to cause a material adverse effect on us. We evaluated each plan and program independently and as part of our overall compensation framework. In general, our compensation plans and programs:

are well documented, appropriately communicated, consistently applied and reviewed annually by the Compensation Committee;

are based on both individual performance and company performance metrics that are tied to the strategic goals and objectives of the company;

balance short- and long-term rewards, with compensation capped at levels consistent with industry standards;

do not encourage excessive risk taking, do not focus on short-term gains rather than long-term value creation, do not reward circumvention of controls or do not contain unrealistic goals and/or targets; and

are compared to industry standards and peer companies on an on-going basis by both the internal compensation department as well as the Compensation Committee’s independent compensation consultant and amended periodically to maintain consistency with common practices.
Based on these factors, the absence of any identified incentives for risk-taking above the level associated with our business model, the involvement of our independent Compensation Committee and our overall culture and control environment, we have concluded our compensation plans do not promote excessive risk taking.
Stock Ownership Guidelines for Directors and Executive Officers
The Board of Directors believes that directors and management should have a significant financial stake in our company to align their interests with those of our stockholders. In that regard, the Board adopted stock ownership guidelines that require directors and executive officers to own specified amounts of our stock granted to them in connection with their service to the company. The stock ownership guidelines are further described below in “Non-Employee Director Compensation — Stock Ownership Guidelines for Non-Employee Directors” and “Compensation Discussion and Analysis — Stock Ownership Guidelines for Named Executive Officers.”
Code of Conduct and Ethics Hotline
We have a Code of Conduct that covers our directors, officers (including our Chief Executive Officer and Chief Financial/​Accounting Officer) and employees and satisfies the requirements for a “code of ethics” within the meaning of SEC rules. A copy of the code is posted in the “Corporate Governance” section on the Investor Relations page of our website at www.internap.com . The code is available in print to any person without charge, upon request sent to our Corporate Secretary at Internap Corporation, One Ravinia Drive, Suite 1300, Atlanta, Georgia 30346. We will disclose, in accordance with all applicable laws and regulations, amendments to, or waivers from, our Code of Conduct.
Any suggestions, concerns or reports of misconduct at our company or complaints or concerns regarding our financial statements and accounting, auditing, internal control and reporting practices can be reported by submitting a report on https://internap.alertline.com/gcs/welcome (anonymously, if desired) or by calling our third-party provider, Global Compliance, at (800) 323-6182.
Attendance
Attendance at Board of Directors and committee meetings is central to the proper functioning of our Board and is a priority. Directors are expected to make every effort to attend all meetings of the Board, meetings of committees on which they serve and the annual meeting of stockholders.
Board and Company Culture
Our Corporate Governance Guidelines are coupled with a robust, open and effective Board environment that promotes respect, trust and candor, fosters a culture of open dissent and permits each director to express opinions and contribute to the Board process. Directors are expected to have unrestricted access to management and any company information they believe is necessary and appropriate to perform their roles as directors. The participation of Board members and the open exchange of
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opinions are further encouraged at the Board committee level through the periodic rotation of Board members among its standing committees. This open and candid operating environment is shared by management and the Board and is essential to fully realize the benefits of our Corporate Governance Guidelines, committee charters and other policies governing our company.
Stockholder Communications with the Board of Directors
Stockholders and interested parties may communicate with our Board of Directors by sending correspondence to the Board, a specific Board committee or a director c/o Corporate Secretary, Internap Corporation, One Ravinia Drive, Suite 1300, Atlanta, Georgia 30346 or by sending electronic mail to corpsec@internap.com .
The Corporate Secretary reviews all communications to determine whether the contents include a message to a director and will provide a summary and copies of all correspondence (other than solicitations for services, products or publications) to the applicable directors at each regularly scheduled meeting. The Corporate Secretary will alert individual directors to items which warrant a prompt response from the individual director prior to the next regularly scheduled meeting. Our Corporate Secretary will route items warranting prompt response, but not addressed to a specific director, to the applicable committee chairperson.
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NON-EMPLOYEE DIRECTOR COMPENSATION
In 2014, we compensated non-employee directors as follows:
Cash
($)
Restricted Stock
($) (1)
Newly appointed or elected director
Number of
restricted shares equal to $90,000
Annual director retainer $  20,000
Number of
restricted shares equal to $90,000
Board meeting attendance fee – scheduled to be held in person 1,500
Committee meeting attendance fee – scheduled to be held in person 1,000
Board or Committee meeting attendance fee – scheduled to be held by telephone 750
Audit Committee chairperson annual retainer 15,000
Audit Committee member annual retainer 7,500
Compensation Committee chairperson annual retainer 10,000
Compensation Committee member annual retainer 5,000
Nominations and Governance Committee chairperson annual retainer 7,500
Chairman annual retainer (2) 50,000
(1) All shares of restricted stock vest on the date of the annual meeting of stockholders held the following year. The Compensation Committee’s independent compensation consultant determines the number of shares of restricted stock based on a proprietary valuation methodology which takes into account the vesting and termination provisions of the award. As a result, the values listed above substantially approximate, but may not equal, those disclosed in the table below setting forth the compensation paid in 2014.
(2) Our Chairman receives the listed amount in lieu of the retainer of  $20,000 paid to all other directors and receives the standard director fees for attendance at Board and committee meetings as well as the equity grants made to all other directors.
We also pay director expenses associated with attending Board of Directors and committee meetings. Mr. Cooney does not receive any additional compensation for serving on the Board.
Effective January 1, 2015, we changed the structure of our non-employee director compensation program to a retainer-only compensation program and have removed fees for attendance at Board and committee meetings. Accordingly, non-employee directors will be compensated as follows:
Cash
($)
Restricted Stock
($)
Newly appointed or elected director
Number of
restricted shares equal to $110,000
Annual director retainer $  60,000
Number of
restricted shares equal to $110,000
Audit Committee chairperson annual retainer 15,000
Audit Committee member annual retainer 7,500
Compensation Committee chairperson annual retainer 10,000
Compensation Committee member annual retainer 5,000
Nominations and Governance Committee chairperson annual retainer 7,500
Chairman annual retainer 100,000
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The following table lists the compensation paid to our non-employee directors during 2014:
Name
Fees Earned or
Paid in Cash (1)
Stock
Awards (2)(3)
Total
Charles B. Coe $  49,900 $  96,159 $  146,059
Patricia L. Higgins 53,200 96,159 149,359
Gary M. Pfeiffer 55,750 96,159 151,909
Michael A. Ruffolo 46,400 96,159 142,559
Daniel C. Stanzione 79,000 96,159 175,159
Debora J. Wilson 49,000 96,159 145,159
(1) Listed amounts include the annual retainers and meeting fees.
(2) Represents the full grant date fair value of restricted stock granted in 2014, calculated in accordance with FASB ASC Topic 718. We value restricted stock using the closing price of our common stock reported on Nasdaq on the grant date. For additional valuation assumptions, see Note 13 to our Consolidated Financial Statements for the fiscal years ended December 31, 2014, 2013 and 2012. The values in this column may not correspond to the actual value that the non-employee directors will realize at the time that the restricted stock vests.
(3) The following table lists the number of outstanding restricted stock awards and stock options held by our non-employee directors as of December 31, 2014. The reported numbers reflect only grants made by the company and do not include any other stock that a director may have acquired on the open market:
Name
Stock Awards
(#) (a)
Options
(#) (b)
Charles B. Coe 55,350 47,560
Patricia L. Higgins 80,332 45,560
Gary M. Pfeiffer 61,144 38,560
Michael A. Ruffolo 71,307 16,290
Daniel C. Stanzione 68,980 72,560
Debora J. Wilson 71,307 16,290
(a)
Includes awards of restricted stock net of any shares withheld at the election of a director to satisfy minimum statutory tax obligations upon vesting plus shares acquired upon exercise of vested stock options. Some of the reported grants remain subject to time-based vesting.
(b)
All outstanding options are fully vested.
Stock Ownership Guidelines for Non-Employee Directors
The Board of Directors has implemented stock ownership guidelines that require each non-employee director to beneficially own a number of shares of company common stock equal to five times the annual director retainer as identified above. Our Board of Directors did not change the ownership requirement for non-employee directors (5.0 x annual retainer) even though the annual retainer for Board service was increased effective January 1, 2015. All non-employee directors meet the required guidelines. We believe that these guidelines further align the interests of directors and stockholders. Please see “Compensation Discussion and Analysis — Stock Ownership Guidelines for Named Executive Officers” for additional information regarding the guidelines.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND OFFICERS AND DIRECTORS
Five Percent Stockholders
The following table sets forth information as to those holders known to us to be the beneficial owners of more than 5% of our outstanding shares of common stock as of December 31, 2014:
Common Stock
Beneficially Owned
Name and Address of Beneficial Owner
Number of
Shares
Percent of
Class (1)
Avenir Corporation (2) 8,058,509
14.70%​
BlackRock, Inc. (3) 3,396,664
6.19%​
Dimensional Fund Advisors LP (4) 3,070,693
5.60%​
GAMCO Investors, Inc. (5) 10,092,547
18.40%​
Kornitzer Capital Management, Inc. (6) 4,490,145
8.19%​
(1) As of March 1, 2015, based on 54,838,020 shares outstanding on that date.
(2) Based on information set forth in Amendment No. 4 to Schedule 13G filed February 13, 2015. The Schedule 13G indicates that Avenir Corporation has sole voting and dispositive power over 8,058,509 shares of our common stock. The business address of Avenir Corporation is 1775 Pennsylvania Avenue NW, Suite 650, Washington, DC 20006.
(3) Based on information set forth in Amendment No. 5 to Schedule 13G filed January 30, 2015. The Schedule 13G indicates that BlackRock, Inc. has sole voting power over 3,257,811 shares of our common stock and sole dispositive power over 3,396,664 shares of our common stock. The business address of BlackRock, Inc. is 40 East 52 nd Street, New York, New York 10022.
(4) Based on information set forth in Amendment No. 4 to Schedule 13G filed February 5, 2015. The Schedule 13G indicates that Dimensional Fund Advisors LP has sole voting power over 2,922,040 shares of our common stock and sole dispositive power over 3,070,693 shares of our common stock. The business address of Dimensional Fund Advisors LP is Palisades West, Building One, 6300 Bee Cave Road, Austin, Texas 78746.
(5) Based on information set forth in Amendment No. 14 to Schedule 13D filed November 19, 2014. The Schedule 13D indicates that Gabelli Funds, LLC has sole voting and dispositive power over 2,876,541 shares of our common stock; GAMCO Asset Management, Inc. has sole voting power over 6,384,793 shares of our common stock and sole dispositive power over 6,697,429 shares of our common stock; Teton Advisors, Inc. has sole voting and dispositive power over 491,477 shares of our common stock; Gabelli Securities, Inc. has sole voting and dispositive power over 24,800 shares of our common stock; GAMCO Investors, Inc. has sole voting and dispositive power over 300 shares of our common stock; and Mario J. Gabelli has sole voting and dispositive power over 2,000 shares of our common stock. According to the filing, the business address for each of the foregoing entities and Mr. Gabelli is One Corporate Center, Rye, New York 10580.
(6) Based on information set forth in Amendment No. 6 to Schedule 13G filed January 22, 2015. The Schedule 13G indicates that Kornitzer Capital Management, Inc. has sole voting power over 4,490,145 shares of our common stock, sole dispositive power over 4,386,450 shares of our common stock and shared dispositive power over 103,695 shares of our common stock. The business address of Kornitzer Capital Management, Inc. is 5420 West 61 st Place, Shawnee Mission, Kansas 66205.
Stock Ownership of Management
The following table sets forth the number of shares of common stock beneficially owned as of March 1, 2015 by each of our directors and named executive officers (defined below under “Compensation Discussion and Analysis”) and all of our directors and executive officers as a group. The address of each current director and named executive officer is c/o Internap Corporation, One Ravinia Drive, Suite 1300, Atlanta, Georgia 30346.
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To our knowledge, except under community property laws, the persons and entities named in the table have sole voting and sole investment power over their shares of our common stock.
Common Stock
Beneficially Owned
Name of Beneficial Owner
Number of
Shares (1)
Percent of
Class (2)
Charles B. Coe 114,910 *
J. Eric Cooney 2,218,749 3.95 %
Patricia L. Higgins 125,892 *
Gary M. Pfeiffer 99,704 *
Michael A. Ruffolo 87,597 *
Daniel C. Stanzione 160,540 *
Debora J. Wilson 141,512 *
Kevin M. Dotts 254,879 *
Steven A. Orchard 353,103 *
Peter G. Bell 41,019 *
Christian Primeau (3) 16,666 *
All directors and executive officers as a group (12 persons) 3,644,571 6.42 %
* Represents beneficial ownership of less than 1%.
(1) Includes shares that may be acquired by the exercise of stock options granted under our equity compensation plans within 60 days after March 1, 2015 as follows:
Name
Options (#)
Charles B. Coe 47,560
J. Eric Cooney 1,271,486
Patricia L. Higgins 45,560
Gary M. Pfeiffer 38,560
Michael A. Ruffolo 16,290
Daniel C. Stanzione 72,560
Debora J. Wilson 16,290
Kevin M. Dotts 127,496
Steven A. Orchard 262,156
Peter G. Bell
Christian Primeau
Directors and executive officers as a group 1,897,958
(2) As of March 1, 2015, based on 54,838,020 outstanding on that date.
(3) Mr. Primeau’s employment ended December 31, 2014. The number of shares reported in the table above reflects the number of vested restricted stock units that he held on his termination date, which may not reflect his current holdings.
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EXECUTIVE OFFICERS
Executive Officers
In addition to Mr. Cooney, our Chief Executive Officer and President, whose biographical information appears under “Proposal 1 — Election of Directors,” set forth below are the names, ages and biographical information for each of our current executive officers.
Name
Age
Position
J. Eric Cooney
49
Chief Executive Officer and President
Kevin M. Dotts
51
Chief Financial Officer
Steven A. Orchard
43
Senior Vice President and General Manager, Data Center and Network Services
Peter G. Bell
55
Senior Vice President, Global Sales
Kevin M. Dotts has been our Chief Financial Officer since 2012 and manages all of our finance, accounting, treasury, information technology and real estate activities. Prior to joining us, Mr. Dotts served as Chief Financial Officer and Executive Vice President of Culligan International Company since 2011. From 2009 to 2010, Mr. Dotts served as Chief Financial Officer and Director of Gas Turbine Efficiency PLC, a global energy technology development company. Prior to that time, Mr. Dotts served EarthLink, Inc. as Chief Financial Officer and Executive Vice President from 2004 to 2009 and as Vice President Finance from 2002 until 2004. Mr. Dotts began his career at General Electric Company in 1987 and served in increasingly senior financial roles during his 15 years of tenure, including leadership positions at GE Plastics Europe (Financial Planning and Analysis Manager), GE Plastics Americas (Finance Manager), NBC Corporate (Vice President, Financial Planning and Analysis) and GE Energy Parts, Inc. (Chief Financial Officer). A graduate of General Electric’s Financial Management Program, Mr. Dotts was a leader of General Electric’s Corporate Audit Staff. Mr. Dotts is an Advisory Board member of the Atlanta CFO Roundtable (Terry College of Business, University of Georgia) and holds a B.S. in Finance and Computer Information Systems Management from Drexel University.
Steven A. Orchard has been our Senior Vice President and General Manager, Data Center and Network Services since January 2014, where he leads our data center and network services businesses, including the product management, business development, service delivery, research and development and operations functions for our colocation, IP services and content delivery network offerings. Until January 2015, Mr. Orchard also led our customer support functions. From 2012 until January 2014, Mr. Orchard served as our Senior Vice President, Development and Operations, where he led our service delivery, operations and customer support functions and was responsible for research, architecture and development of our full suite of IT infrastructure solutions. Mr. Orchard originally joined us in 1999 and has previously served as Senior Manager, IP Operations from 2005 until 2006; Director, Network Operations from 2006 until 2007; Vice President, Network Operations from 2007 until 2009 and our Senior Vice President, Operations and Support from 2009 until 2012. Prior to joining us, Mr. Orchard held systems positions with Codesic, Inc. and Oasis Systems, Inc. Mr. Orchard holds a B.S. from the University of Oregon.
Peter G. Bell has been our Senior Vice President, Global Sales since October 2014 and leads our worldwide sales and solutions engineering organization, including sales operations, channel and strategy. Prior to joining us, Mr. Bell served as Vice President and General Manager, Global Solutions Sales at NTT America from 2012 to 2014. Prior to that time, Mr. Bell served as Senior Vice President of the Global Partner Program for Global Crossing from 2009 to 2012. Mr. Bell served as Vice President of Sales at BT Global Services from 2007 to 2012, and as Senior Vice President of Sales at WilTel Communications (acquired by Level 3 Communications) from 2003 to 2006. Mr. Bell began his career at Cable & Wireless Communications in 1990, where he spent more than a decade in sales management and market development roles in the United States, the United Kingdom and Hong Kong. Mr. Bell holds a B.S. in Mass Communications from Emerson College and attended the INSEAD School of Business.
COMPENSATION DISCUSSION AND ANALYSIS
Executive Summary
We seek to closely align the economic interests of our named executive officers with those of our stockholders. With this goal in mind, we design our executive compensation program to reward our executive officers, including our named executive officers, for the achievement of corporate performance. This approach incents and rewards our executive officers, including our named executive officers, for the achievement of our short-term (annual) corporate goals and focuses them on our long-term strategic goals, while at the same time avoiding the encouragement of excessive risk-taking. Total compensation for our executive officers,
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including our named executive officers, is comprised of a mix of base salary, annual cash incentive and long-term equity incentive grants which are reinforced by our robust stock ownership guidelines. Our named executive officers participate in the benefit programs generally available to all other eligible employees. We do not provide separate benefit or perquisite programs to our executive officers.
In 2014, we achieved a number of important milestones positioning our company for future growth and success. We made strategic investments to drive innovation, enhance our competitiveness, solidify our growth and expand the value of our company. In 2014, specific accomplishments included the following:

Highest Levels of Revenue and Profitability in Company History . We delivered the highest revenue and adjusted EBITDA in our history in 2014. Our revenue increased 18% to $335.0 million compared to $283.3 million in 2013. Full year adjusted EBITDA increased 36% year-over-year to $78.7 million, which is our fifth consecutive year of adjusted EBITDA growth. Adjusted EBITDA margin expanded by 300 basis points to 23.5%. Adjusted EBITDA is a non-GAAP financial measure, and is defined as loss from operations plus (a) depreciation and amortization, (b) loss on disposals of property and equipment, (c) impairments and restructuring and (d) stock-based compensation. Adjusted EBITDA margin is adjusted EBITDA as a percentage of revenues. For a reconciliation of adjusted EBITDA to income from operations and a discussion of why we present adjusted EBITDA, please see page 20 of our Annual Report on Form 10-K for the year ended December 31, 2014.

Continued Execution of our Strategy to Become a Leading Global Supplier of IT Infrastructure Services . We continue to execute on our strategy to deliver profitable growth by leveraging our investments in colocation, hosting and cloud services, which we refer to as our core datacenter services. Core datacenter services revenue increased 46% to $195.4 million in 2014. The strategic shift we have made in focusing on higher-margin company-controlled data center hosting and cloud services is delivering results and remains a key driver for our long-term profitable growth. Our financial performance in 2014 highlights the successful execution of our data center services strategy and the solid operating leverage we are building into our business model.

Successful Integration of Strategic Acquisition . We successfully integrated iWeb, a provider of hosting and cloud services. The acquisition accelerated our transition to data center services and added the complex and strategically important e-commerce/online route-to-market capabilities.

Successful Data Center Migration . We successfully completed the data center migration in our New York Metro market, which further improved company profitability.
While we are pleased with our accomplishments, and believe we are well positioned for continued operational and financial growth in 2015, we are also mindful that we did not achieve all of our internal targeted measures of financial performance (revenue, adjusted EBITDA and bookings net of churn) for 2014. The Compensation Committee is satisfied that, on balance, the design, implementation and execution of our executive compensation program resulted in appropriate compensation for actual performance versus targeted levels of performance. Accordingly, our executive officers, including our named executive officers, received 58.5% of their total target incentive compensation for 2014. In summary, we set aggressive corporate financial targets and paid only for partial achievement against those targets.
Significant Compensation Practices and Recent Modifications
We target the elements of our compensation program to provide employees, including our named executive officers, with a compensation program that is market competitive and rewards them for corporate, business unit and personal performance, as applicable. We target base salaries and short- and long-term compensation for employees, in aggregate, to be market competitive while also considering personal performance, internal equity and an internal assessment of individual roles. Our goal in setting our compensation program is to maintain an appropriate cost structure while at the same time attracting, motivating and retaining talented employees at all levels. Further, we seek to provide our named executive officers with significant wealth creation opportunities through long-term equity grants, which, coupled with our robust stock ownership guidelines, provides a strong linkage between our executive compensation program and the interests of our stockholders.
In setting the compensation of our named executive officers, our Compensation Committee uses peer group data prepared by third parties and analysis conducted by Compensation Strategies, Inc. (“CSI”), the independent compensation consultant to our Compensation Committee, to assess the competitiveness of our compensation levels and provide a target range for our compensation programs. More specifically, we target the compensation levels of our named executive officers to be within an acceptable range around the median compensation for our peer group. Where appropriate, we adjust compensation to account
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for factors such as the individual’s level of experience, responsibilities, performance, relative internal impact of the role and expected future contributions. Ultimately, the determination of the compensation level for any named executive officer is not merely formulaic but is developed using a balanced consideration of all of these elements.
We review and evaluate our compensation programs, practices and policies on an ongoing basis, but at least annually. We modify our compensation programs to address evolving best practices and factors we believe will motivate our executive officers, including named executive officers, to perform in the best interests of our stockholders. We have provided below some of the more significant practices and recent modifications.
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Base Salaries. The Board of Directors increased the base salary of our Chief Executive Officer 3.3% in 2014 but did not increase it in 2015. The Compensation Committee considered the base salaries of our other named executive officers and, in part based on the Chief Executive Officer’s recommendations, increased their base salaries 3.0% in 2014 and between 0% and 3.0% in 2015.

Performance-Based Approach. We pay our executive officers, including named executive officers, for performance. In that regard, short-term incentive awards for named executive officers are determined solely by corporate performance and long term-incentive awards for named executive officers are largely determined by individual performance and role and responsibility. For 2014, 80% of our Chief Executive Officer’s total compensation was incentive compensation. For our other named executive officers, the percentages of incentive compensation to total compensation ranged from 33% (for a named executive officer who did not receive a long-term equity grant) to 90% (for a named executive officer who received a long-term equity grant in connection with commencement of employment in 2014). Please see the graph on page 24 for additional information on the allocation of our compensation.

Short-Term (Annual) Incentive Compensation. Each of our executive officers, including our named executive officers other than our Senior Vice President, Global Sales, was eligible to receive an award for performance in 2014 based solely on attainment of revenue, adjusted EBITDA and bookings net of churn targets. Our Senior Vice President, Global Sales was entitled to receive a guaranteed pro-rated award and, if earned, an award for over-achievement based solely on these same three corporate financial targets. In 2015, we continue our “pay-for-performance” focus and continue to align all executive officers, including named executive officers, toward similar corporate financial goals. Each of our executive officers, other than our Senior Vice President, Global Sales, is eligible to receive an award for achievement of revenue, adjusted EBITDA and bookings net of churn targets, while our Senior Vice President, Global Sales is entitled to receive an award for achievement of bookings and churn targets. Our Compensation Committee believes these are the most appropriate targets to align individual incentives with the creation of stockholder value.

Long-Term Incentive Compensation. Long-term incentive compensation through equity awards continues to be an important component of the compensation for our executive officers, including our named executive officers. In 2014, our long-term incentive awards were comprised of stock options (70%) and restricted stock (30%). In 2015, our long-term incentive awards were comprised of stock options (60%) and restricted stock (40%). Annual grants are made at fair market value and vest over a four year period. The Compensation Committee reviews the types of equity awards used on an annual basis to determine the appropriate focus on stock price appreciation and retention, while continuing to maximize motivation and align named executive officers with stockholder interests. We believe that our approach to long-term incentive compensation reflects those goals.

No Perquisites. We do not provide our named executive officers with any executive benefit or perquisite programs.

Stock Ownership Guidelines. Our robust stock ownership guidelines for executive officers, including named executive officers, and directors further align executive officer, director and stockholder interests. These individuals are required to beneficially own a number of shares of company common stock as determined below:
Individual
Multiple
Chief Executive Officer 6.0x base salary
Chief Financial Officer 3.0x base salary
All Other Senior Vice Presidents 2.0x base salary
Non-Employee Directors
5.0x annual retainer
The guidelines require these individuals to retain 100% of the shares granted to them by the company (net of applicable taxes) until the guidelines are achieved.

Double Trigger Change in Control Agreements. Our named executive officers will receive specified payments and acceleration of vesting of equity in the event of a change in control of our company. The payments and acceleration of vesting are considered “double trigger,” that is, an individual will only be entitled to a change in control payment and acceleration of vesting if the company has experienced a change in control and a qualifying termination occurs following such change in control.

Clawback Policy. Our clawback policy allows us to “clawback” compensation paid to any employee (and not just to executive officers) who has engaged in fraud or intentional misconduct in the event of a financial restatement. Our approach to recouping compensation goes beyond the requirements of current law.

No Speculative Transactions. All of our employees, including named executive officers, and directors are prohibited from engaging in any speculative transactions in company securities, including engaging in any prepaid forward contracts, equity swaps, collars and exchange funds or any other transaction in which the person could profit if the value of our stock falls, including short sales of company securities and put options on company securities.
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Repricing of Stock Options. We are not permitted to reprice stock options without explicit stockholder approval.

Limit on Full Value Awards in Equity Plan. We are limited in our ability to grant full value awards (i.e., restricted stock) to 50% of the total number of shares available under our equity plan.

Limit on Incentive Awards. The maximum potential payout to named executive officers under our short-term (annual) incentive plan is limited to the following percentages of base salary: Chief Executive Officer: 200%; Chief Financial Officer: 130% and 100% for our other named executive officers.

Compensation Risk Assessment. Our Compensation Committee annually reviews and approves our compensation strategy, which includes a review of compensation-related risk management. In its review, the Compensation Committee analyzes our compensation program for all employees, including short-term (annual) incentive plan and long-term incentive compensation. The Compensation Committee does not believe that our compensation program encourages excessive or unnecessary risk-taking.

Independent Compensation Committee. Our Compensation Committee is comprised solely of independent directors as defined by Nasdaq, SEC rules and our director independence standards.

Independent Compensation Consultant. The Compensation Committee has directly retained its compensation consultant, who performs no other consulting or other services for our company. Our Compensation Committee has evaluated the independence of its compensation consultant and determined that the consultant can provide independent and objective advice and its engagement does not present any conflicts of interest.
We hold an advisory stockholder vote on our executive compensation practices (“say-on-pay”) at each annual stockholders meeting. After consideration of this stockholder vote at our 2014 annual stockholders meeting and given the substantial support received from stockholders at such meeting (nearly 98% of the votes cast were in favor of our executive compensation program), the Compensation Committee continues to apply the same general principles described in this Compensation Discussion and Analysis in its determination of the amounts and types of executive compensation.
We encourage you to read this Compensation Discussion and Analysis for a detailed discussion and analysis of our executive compensation program, including information about the compensation components for our named executive officers.
Overview of Our Executive Compensation Program
The principal components of our executive compensation program are base salary, a short-term (annual) cash incentive based on corporate financial performance and a long-term equity incentive consisting of stock options and restricted stock. Our executive compensation program is benchmarked against the median compensation at a group of peer companies (as described below) as well as the median level of compensation derived from broad-based surveys of companies of similar size to us. We use this market compensation information to evaluate the competitiveness of our executive compensation program relative to our peers.
This section refers to the compensation of our “named executive officers” unless we note otherwise:

J. Eric Cooney, President and Chief Executive Officer

Kevin M. Dotts, Chief Financial Officer

Steven A. Orchard, Senior Vice President and General Manager, Data Center and Network Services

Peter G. Bell, Senior Vice President, Global Sales

Christian Primeau, former Senior Vice President and General Manager, Cloud and Hosting
Compensation Committee
The Compensation Committee reports to our Board of Directors on all compensation matters for our executive officers, including our named executive officers. You may learn more about the Compensation Committee’s responsibilities by reading the Compensation Committee’s charter, which is available in the “Corporate Governance” section on the “Investor Relations” page of our website at www.internap.com .
The Compensation Committee annually reviews and approves the compensation of our named executive officers, other than the Chief Executive Officer, and annually reviews and makes recommendations to the full Board of Directors regarding the compensation of our Chief Executive Officer. A majority of the independent directors of the full Board of Directors must approve the compensation of our Chief Executive Officer.
   
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Compensation Objectives
We design and manage our compensation programs to align with our overall business strategy and to create value for our stockholders. We believe it is important that our compensation programs:

Are competitive . Our programs are designed to attract, motivate and retain talented individuals at all levels of our company. We structure our compensation programs to be competitive with the compensation paid by companies with whom we compete for similar staff in the technology industry.

Are linked to performance . Many of our employees, including all of our named executive officers, are eligible to participate in our short-term (annual) incentive plan and long-term equity incentive compensation program. We select performance goals that, to the extent achieved, we believe will facilitate the long-term profitable growth of our company and, thus, contribute to long-term value for our stockholders. We believe that the link between compensation and corporate performance motivates and rewards employees, including named executive officers, for achieving and exceeding performance goals, without creating a sense of entitlement and without encouraging excessive risk-taking. All of our executive officers, including our named executive officers, are eligible to receive an award based solely on the achievement of corporate financial targets. If we do not meet our corporate financial targets, our executive officers, including our named executive officers, do not get paid under our short-term incentive plan.

Align the interests of our named executive officers with those of our stockholders . Our annual performance goals are intended to drive the creation of long-term stockholder value. Long-term equity incentive compensation vests over a four-year period and the value of such grants to the recipients increases or decreases based on changes in the price of our common stock over time. Our executive officers, including our named executive officers, are subject to robust stock ownership guidelines. Because of the wealth creation opportunities inherent in our long-term incentive compensation program, and the obligation of our named executive officers to retain a specific level of equity, we believe that our long-term equity incentive compensation program appropriately links the interests of our named executive officers and stockholders.
Components of our Executive Compensation Program
The components of our executive compensation program, the primary purpose of each component and the form of compensation for each component are described in the following table:
Component
Primary Purpose
Form of Compensation
Base Salary
Provides base compensation for day-to-day performance of job responsibilities
Cash
Short-Term (Annual) Incentive Compensation
Motivates and rewards for the achievement of corporate goals
Cash
Long-Term Equity Incentive Compensation
Provides incentive for long-term performance, retention and motivation, thereby aligning the financial interests of our named executive officers with the interests of our stockholders
Stock options : which vest 25% on the first anniversary of the grant date and in 36 equal monthly installments thereafter; and
Restricted stock : which vests in four equal annual installments beginning on the first anniversary of the grant date
Allocation of Compensation Components
We manage our business with the goal of maximizing stockholder value, and, accordingly, a significant percentage of the compensation of our named executive officers is variable and linked to performance of both the company and/or the individual. The incentive components of our executive compensation program for named executive officers which are linked to corporate performance (targeted short-term (annual) incentive compensation and the value of long-term equity incentive compensation) are targeted to exceed the level of their annual base salary. Whether named executive officers actually receive the targeted incentive compensation level depends on the overall short- and long-term performance of our company and the growth in our stock price.
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The Compensation Committee considers qualitative and quantitative factors when establishing compensation for each named executive officer. We do not have a specific formula for the allocation of the various compensation elements between fixed (base salary) and variable pay, nor for the individual elements of compensation (base salary, short-term (annual) incentive and long-term equity incentive). However, our expectation is that the short- and long-term incentive components of the named executive officer’s total compensation package will comprise the majority of their total targeted compensation. We determine the compensation structure for each individual based on our assessment of a number of factors including:

the long-term strategic and shorter term operational objectives of our business;

an analysis of the compensation components at peer companies;

broad-based survey data from companies in our industry and of like size; and

the named executive officer’s level of experience, responsibilities, performance of the individual and the relevant business unit, relative internal impact of the role and expected future contributions.
The following table illustrates the allocation of the targeted principal compensation components for our named executive officers for 2014. The percentages reflect the amounts of actual base salary earned, the targeted short-term (annual) incentive compensation and the aggregate grant date fair values of long-term equity compensation granted.
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Compensation Consultant and Benchmarking
CSI has served as the independent compensation consultant to the Compensation Committee since 2009. CSI assists the Compensation Committee in designing and implementing our executive compensation program and provides analytical review and assessment of our executive compensation program and its ongoing relevance. In connection with its engagement of CSI, the Compensation Committee considered various factors bearing upon CSI’s independence including, but not limited to, the amount of fees received by CSI from us as a percentage of CSI’s total revenue, CSI’s policies and procedures designed to prevent conflicts of interest and the existence of any business or personal relationship that could impact CSI’s independence. After reviewing these and other factors, the Compensation Committee determined that CSI was able to provide independent and objective advice and that its engagement did not present any conflicts of interest. Other than executive and Board compensation consulting, CSI did not provide any other services to the company in 2014. The Compensation Committee has engaged CSI for executive compensation services in 2015.
The Compensation Committee and management sought the views of CSI regarding market trends for executive compensation and analysis of specific compensation program components. CSI provided information comparing direct compensation for the named executive officers to market data from a group of peer companies (as described below) as well as other broader-based survey sources. “Direct compensation” encompassed base salary, annual bonus opportunities and long-term compensation in the form of equity grants.
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Based on CSI’s recommendation, the Compensation Committee selected a group of peer companies for use in establishing 2014 compensation levels for the named executive officers. CSI provided 50 th percentile compensation information from this peer group for base salary and short- and long-term incentive compensation. Consistent with standard practices, due to the varying sizes of the companies included in the peer group, CSI used statistical analysis to “size-adjust” the market compensation data to reflect our relative annual revenue. This peer group consisted of:
Active Network, Inc. Digital River, Inc. Inteliquent, Inc.
Aruba Networks, Inc. j2 Global Communications, Inc. Riverbed Technology, Inc.
Bottomline Technologies, Inc. Keynote Systems, Inc. Synchronoss Technologies, Inc.
Cbeyond, Inc. Limelight Networks, Inc. Virtusa Corporation
Cogent Communications Group, Inc. LogMeIn, Inc. Web.com Group, Inc.
Coresite Realty Corp. Neustar, Inc. Websense, Inc.
Digi International Inc. NIC, Inc.
The Compensation Committee considered the market compensation data provided by CSI, the experience level of each named executive officer and the responsibilities associated with a particular named executive officer’s role as multiple reference points in evaluating the compensation components and aggregate compensation package for each of the named executive officers. Generally, we target our compensation program to fall within a reasonable range around the median of the market compensation data for similarly-sized companies in the industries in which we compete (telecommunications, technology, data center and hosting industries). While we target the median in aggregate, individual named executive officer compensation may be either below or above the median based on individual circumstances including performance, experience and/or recruiting and retention needs. When our corporate performance exceeds targets established by the Compensation Committee, the total cash compensation paid to our named executive officers, as a group, may exceed targeted total cash compensation levels, which reflects the Compensation Committee’s commitment to pay for performance. When our corporate performance does not meet our established targets, total cash compensation of our named executive officers generally would be below targeted levels, which also reflects a commitment to pay for performance.
Principal Components of our Executive Compensation Program
Base Salary
Base salary is the only fixed component of our named executive officers’ total compensation package. Our annual salary review process is based on our overall annual budget guidelines and is influenced by competitive market data (provided by CSI) as well as individual performance. Our salary increase philosophy provides for larger increases for higher levels of individual performance. Our Compensation Committee approved an overall budget for annual salary increases for all employees of 3.0% in each of 2014 and 2015.
Annual Performance Appraisal. All employees, including named executive officers, undergo an annual performance appraisal. The employee’s performance for the prior year is evaluated by his or her direct manager.
Our Chief Executive Officer reviews the performance for each named executive officer, which includes the individual’s overall responsibilities, specific operational goals and objectives, results and tenure in the particular position. The Chief Executive Officer uses his judgment in assessing those factors in both a quantitative and qualitative manner. Together with the competitive market data, this appraisal guides the Chief Executive Officer’s recommendation for each named executive officer’s salary increase. In February of each year, our Chief Executive Officer reviews the competitive market data along with his recommendations for salary increases with the Compensation Committee. The Compensation Committee makes the final determination of each named executive officer’s base salary.
With respect to the performance assessment of the Chief Executive Officer, the Compensation Committee reviews his performance against his pre-defined goals and objectives together with competitive market data and makes a recommendation to the full Board of Directors as to any change in base salary. After considering the recommendation of the Compensation Committee, the full Board meets in executive session to determine and approve the Chief Executive Officer’s base salary.
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2014 and 2015 Base Salaries. In our continued effort to manage employee-related costs, the Compensation Committee and/or Board of Directors approved only modest base salary increases in recent years for named executive officers. After due consideration of individual, company and market dynamics discussed above, the Compensation Committee approved and/or recommended salary increases (detailed in the table below) ranging from 3.0% to 3.3% for 2014 and from 0% to 3.0% for 2015 for our named executive officers, including our Chief Executive Officer (whose base salary was determined by the Board), as described below. Salary increases are effective in April of each year.
Name
2014 Base
Salary Increase (%)
2014
Base Salary ($)
2015 Base
Salary Increase (%)
2015
Base Salary ($)
J. Eric Cooney
3.3%​
$ 620,000 $ 620,000
Kevin M. Dotts
3.0%​
325,686 3.0 335,457
Steven A. Orchard
3.0%​
275,298 3.0 283,557
Peter G. Bell (1)
—​
250,000 250,000
Christian Primeau (2)
—​
231,857
(1) Mr. Bell joined us in October 2014, and was not eligible for an increase in base salary for 2015 given his relatively short tenure.
(2) Mr. Primeau’s employment ended December 31, 2014.
The Compensation Committee approved the foregoing increases in Messrs. Dotts’ and Orchard’s base salaries for 2015 based on each individual’s personal performance.
The 2015 base salaries of our current named executive officers (other than our Chief Executive Officer) are in a range from approximately 3% to 14% above the market median. Mr. Cooney’s 2015 base salary is approximately 23% above the market median and was established, in large part, through comprehensive negotiations prior to his employment and was influenced by market levels for his position as well as his experience at other companies and professional achievements.
Short-Term (Annual) Incentive Compensation
In 2014, executive officers, including our named executive officers, were eligible to earn an annual cash award under our short-term incentive plan based solely on achievement of corporate financial targets. The Compensation Committee removed individual business unit targets for executive officers, including our named executive officers, in 2013 to further align the interests of our executive officers with those of our stockholders. As such, awards that were paid to a named executive officer in 2015 based on our corporate performance in 2014 were solely determined and paid based on our overall level of achievement relative to the corporate objectives and targets approved by the Compensation Committee.
Our Compensation Committee believes short-term incentive compensation opportunities for executive officers, including named executive officers, should be competitive with incentive compensation at comparable peer-group companies of similar size and companies with whom we compete for exceptional talent. Our corporate financial targets are based on our financial plan approved by the Board of Directors. This approach ensures alignment and focus among named executive officers around the attainment of corporate financial targets. The Compensation Committee considers each named executive officer’s performance, experience level and potential to impact our short-term performance when setting an individual’s annual incentive compensation opportunity.
Our Compensation Committee approves awards to named executive officers, other than Mr. Cooney, and reviews results achieved compared to corporate targets. The Board of Directors (excluding Mr. Cooney) approves any award to Mr. Cooney after receiving recommendations from the Compensation Committee.
2014 Short-Term Incentive Plan. Our Compensation Committee approved the 2014 Short-Term Incentive Plan (the “2014 STIP”) which awarded participants at or above the senior vice president level, including named executive officers, solely on the basis of achievement of three criteria:

revenue (30% of potential award)

adjusted EBITDA (40% of potential award)

bookings net of churn (30% of potential award)
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The Compensation Committee, for named executive officers other than our Chief Executive Officer, and the Board of Directors, for our Chief Executive Officer, assigned each individual a target level of incentive compensation potential, expressed as a percentage of base salary. In setting the potential annual incentive compensation each named executive officer could earn at the target award level, the Compensation Committee considered the competitive market data provided by CSI and the experience and responsibilities of the named executive officer.
Our revenue, adjusted EBTIDA and bookings net of churn targets for the 2014 STIP were as follows:
Criteria
At Threshold
($)
At Target
($)
At Stretch
($)
Revenue
$ 329.4 million​
$ 337.8 million​
$ 346.2 million​
Adjusted EBTIDA
76.0 million​
80.0 million​
84.0 million​
Bookings net of churn
1.0 million​
2.7 million​
4.2 million​
Our revenue, adjusted EBITDA and bookings net of churn for the year ended December 31, 2014 were $335.0 million, $78.7 million and $0.6 million, respectively. Awards paid to the named executive officers under the 2014 STIP were below the target level awards based on actual results for the revenue and adjusted EBITDA objective. No awards were paid for the bookings net of churn target.
The table below outlines the potential target levels and the award paid (on March 6, 2015) to each named executive officer under the 2014 STIP:
Name
At
Threshold (1)
($)
At
Target
(%)
At
Target (2)
($)
At
Stretch
(%)
At
Stretch
($)
2014 STIP
Award
($)
J. Eric Cooney $  307,308 100 % $  614,615 200 % $  1,229,230 $  359,550
Kevin M. Dotts 105,018 65 % 210,035 130 % 420,070 122,871
Steven A. Orchard 68,285 50 % 136,570 100 % 273,140 79,893
Peter G. Bell (3)
Christian Primeau (4) 57,965 50 % 115,929 100 % 231,858
(1) Partial awards starting at 50% of target could be earned for each goal based on achievement between the threshold and target levels. Threshold levels differed by objective.
(2) The amount that a named executive could earn was based on the actual amount of base salary earned during 2014 (rather than base salary at a point in time).
(3) Per the terms of his offer letter, Mr. Bell was not eligible to receive an award under the 2014 STIP. Mr. Bell’s offer letter provided for variable compensation based on corporate performance, with a guaranteed bonus for performance in 2014 of $31,250.
(4) Mr. Primeau’s employment ended on December 31, 2014; because he was not an employee on the award date, he did not receive an award under the 2014 STIP.
A named executive officer is eligible for stretch awards only if we significantly over-achieved corporate financial objectives. The named executive officers’ target percentages were between approximately 0 and plus 9 percentage points above their respective market medians.
2015 Short-Term Incentive Plan. The 2015 Short-Term Incentive Plan (the “2015 STIP”) operates similarly to the 2014 STIP. Any award earned under the 2015 STIP to our executive officers, including our named executive officers (other than Mr. Bell), will be based solely on achievement of the following three corporate financial targets:

revenue (30% of potential award)

adjusted EBITDA (40% of potential award)

bookings net of churn (30% of potential award)
Our Compensation Committee believes that it is important to align the interests of our executive officers, including our named executive officers, with those of our stockholders. For that reason, similarly to 2014, no award will be made to the named executive officers under the 2015 STIP unless we achieve a threshold level of performance with respect to one or more of the corporate financial targets.
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Mr. Bell’s variable compensation arrangement is based on achievement of monthly and annual bookings and churn targets, with 75% of his incentive tied to bookings targets and 25% of his incentive tied to churn targets. Mr. Bell is entitled to earn a partial award starting at 50% of his bookings target based on achievement between the threshold and target levels. Mr. Bell is not entitled to receive an award for the churn target if corporate performance is below the targeted level of performance. Mr. Bell will be entitled to a stretch award only if we over-achieve the corporate bookings net of churn target applicable to all named executive officers. Any variable compensation earned by Mr. Bell will be paid monthly, two months in arrears. Similarly to the alignment of named executive officers’ interests with those of stockholders, the Compensation Committee believes that it is important to incent attainment of bookings and churn targets and emphasize bookings growth, while ensuring alignment among named executive officers relative to the corporate bookings net of churn target.
The table below outlines the potential target levels and awards that may be earned by the named executive officers under the 2015 STIP and the variable compensation arrangement for Mr. Bell:
Name
At
Threshold (1)
($)
At
Target
(%)
At
Target (2)
($)
At
Stretch
(%)
At
Stretch
($)
J. Eric Cooney $  310,000 100 % $  620,000 200 % $  1,240,000
Kevin M. Dotts 109,024 65 % 218,048 130 % 436,096
Steven A. Orchard 70,889 50 % 141,779 100 % 283,558
Peter G. Bell 62,500 50 % 125,000 100 % 250,000
(1) For named executive officers other than Mr. Bell, partial awards starting at 50% of target may be earned for each goal based on achievement between the threshold and target levels. Threshold levels differ by objective. Mr. Bell is entitled to earn a partial award starting at 50% of his bookings target based on achievement between the threshold and target levels. There is no award for the churn target below the targeted level of performance.
(2) The amount that a named executive officer can earn will be based on the actual amount of base salary earned during 2015 (rather than base salary at a point in time).
The named executive officers’ target award percentage for 2015 are unchanged from the 2014 level and remain between approximately 0 and plus 9 percentage points above their respective market medians.
Our Compensation Committee reviews the structure and parameters of our short-term incentive plan annually in light of current corporate performance and objectives, industry conditions and other relevant factors. The Compensation Committee will then make adjustments to the plan that it believes are necessary to align the short-term incentives with the appropriate corporate objectives for the next year.
Long-Term Equity Incentive Compensation
We grant long-term equity incentive compensation annually under our 2014 Stock Incentive Plan (the “2014 Stock Plan”), which our stockholders approved at the 2014 annual meeting. Upon approval of the 2014 Stock Plan, we no longer make grants of equity under the 2005 Stock Incentive Plan. The plans are substantially similar in design and operation.
In 2014, our annual long-term equity compensation program consisted of both stock options (70% of total grant) and restricted stock (30% of total grant). In 2015, we retained both stock options and restricted stock and changed the allocation to 60% and 40%, respectively. For 2015, we believe this allocation change is a responsible use of equity, will decrease dilution for our stockholders because it results in the granting of less equity and increases the retentive value of our equity thereby aligning named executive officers’ interests with those of our stockholders.
Equity Grant Practices . Our Compensation Committee administers our 2014 Stock Plan and approves the amount of and terms applicable to grants and awards to named executive officers, other than grants and awards to our Chief Executive Officer, which our full Board of Directors approves. In addition to annual grants, the Compensation Committee may approve special grants or awards to named executive officers, such as a grant or award to a new hire or for a promotion.
Our Compensation Committee annually reviews long-term equity incentive levels for all named executive officers in light of long-term strategic and performance objectives and each named executive officer’s role within our company and current and anticipated contributions to our future performance. In determining the aggregate value of grants for an individual, the Compensation Committee considers the individual’s position, responsibilities, tenure, personal and business unit performance and internal peer equity, as well as the competitive market data provided by CSI. Our Chief Executive Officer provides input to these decisions, except in the case of his own compensation.
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The Compensation Committee approves annual grants at its regularly-scheduled meetings in February, with the goal of making grants after the release of financial results for the previous year. The Compensation Committee expects to continue this practice in future years and will attempt to schedule regular meetings to accommodate this practice.
Stock Options . The option exercise price of a grant is the fair market value of our common stock on the grant date, which is the closing price reported on Nasdaq on that date. Stock options generally vest 25% on the first anniversary of the grant date and in 36 equal monthly installments thereafter.
Restricted Stock. Restrictions on restricted stock generally lapse in four equal annual installments beginning on the first anniversary of the grant date.
The Compensation Committee has discretion to change the allocation of future equity awards for individuals and/or named executive officers as a group.
For 2014, grant values for all named executive officers fell within a range of  +/- 20% of their respective market medians. For 2015, grant values for certain named executive officers fell within the same range of  +-/20% of their respective market medians, as determined by CSI, the consultant to the Compensation Committee. Mr. Bell is not included in this range given that his grant was made in connection with his commencement of employment and was not targeted against an annual market level. Mr. Primeau did not receive a long-term equity grant in 2014.
Named executive officers received the following equity awards in 2014 and 2015:
Name
Number of
Stock Options
Granted in
2014
Number of Shares
of Restricted
Stock Granted in
2014
Number of
Stock Options
Granted in
2015
Number of Shares
of Restricted
Stock Granted in
2015
J. Eric Cooney 198,722 39,909 154,722 47,496
Kevin M. Dotts 82,746 16,618 64,424 19,777
Steven A. Orchard 55,296 11,105 43,052 13,216
Peter G. Bell (1) 50,000 30,000 35,896 11,019
(1) The grants made to Mr. Bell in 2014 were in connection with his commencement of employment.
The Compensation Committee believes that the compensation program for named executive officers provides significant performance incentives. Specifically, the short-term (annual) incentive plan provides incentives for performance and includes defined performance thresholds and maximum opportunity levels for each named executive officer. The stock option and restricted stock grants encompassing our long-term equity incentive program provide longer-term incentives as recipients can benefit from appreciation in our stock price. The size of stock option grants in the equity award focuses recipients on stock price appreciation, thus furthering the goal of rewarding performance and aligning the interests of the named executive officers with those of our stockholders. As these awards vest over time, they also serve as a retention device.
Stock Ownership Guidelines for Named Executive Officers
In 2010, our Board of Directors established stock ownership guidelines for executive officers (including named executive officers) and non-employee directors which further align their interests with those of our stockholders. The ownership guidelines apply to the Chief Executive Officer, Chief Financial Officer, all Senior Vice Presidents and non-employee directors. These individuals are required to beneficially own a number of shares of company common stock having a value equal to or greater than the following thresholds:
Individual
Multiple
Chief Executive Officer
6.0x base salary
Chief Financial Officer
3.0x base salary
All Other Senior Vice Presidents
2.0x base salary
Non-Employee Directors
5.0x annual retainer
Whether an individual meets his or her guideline is annually determined and calculated as the lesser number of shares from either (a) the individual’s salary/retainer as of the date the individual became subject to the guidelines times the multiple above, divided by $5.00 (which was the approximate price of our common stock at the time the guidelines were implemented) or (b) the individual’s then-current salary/retainer times the multiple above, divided by the then-current price of our common stock.
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In 2015, the Board of Directors changed this formulation to reflect the significant increase in our stock price since the guidelines were originally implemented. Accordingly, whether an individual meets his or her guideline is annually determined and calculated as the lesser number of shares from either (a) the individual’s salary/retainer as of March 19, 2015 (which was the date of the change in the formulation) times the multiple above, divided by $8.93 (which was the average price of our common stock for the preceding 60 days) or (b) the individual’s then-current salary/retainer times the multiple above, divided by the then-current price of our common stock.
The Board of Directors will annually review the stock ownership guidelines and may make adjustments to ensure that the interests of executive officers are aligned with our stockholders.
The guidelines require the listed individuals to retain 100% of the shares granted to them by the company (net of applicable taxes) until the guidelines are achieved. Unrestricted stock held by the individual, including shares purchased on the open market, shares acquired upon exercise of stock options and shares granted by us that have vested, as well as restricted stock still subject to time-based vesting (which are credited toward the guidelines on a pre-tax basis) are credited toward the satisfaction of the ownership guidelines. Stock options, whether vested or unvested, are not credited toward the satisfaction of the ownership guidelines. All of our current named executive officers and non-employee directors meet the required guidelines, other than Mr. Bell who joined the company in late 2014. Mr. Bell is in compliance with the retention requirements of the guidelines.
No Perquisites
We do not provide our named executive officers with any executive benefit or perquisites programs. We provide named executive officers with the same benefits available to all of our salaried employees, including (a) a choice of medical, dental and vision plans; (b) basic and voluntary life insurance; (c) short-term disability, long-term disability and long-term care insurance; and (d) participation in our 401(k) plan, including discretionary company-matching contributions.
Limitations on the Deductibility of Executive Compensation
Generally, compensation payments in excess of  $1 million to the Chief Executive Officer or the other three most highly compensated executive officers (other than the Chief Financial Officer) are subject to a limitation on deductibility by us under Section 162(m) of the Internal Revenue Code of 1986, as amended, with certain exceptions for qualified “performance-based” compensation. While the Compensation Committee has established procedures to help maximize tax deductibility, the Compensation Committee believes it is important to preserve flexibility in administering compensation programs in a manner designed to promote varying corporate goals. We may pay compensation in future years that does not qualify as performance-based compensation. Because we have available net operating losses, however, we expect the impact of any non-deductibility to be negligible.
Employment Arrangement with our Chief Executive Officer
Mr. Cooney’s offer letter provided him, among other things, a base salary and an annual incentive bonus based upon criteria established by our Board of Directors, with a target level of 100% of base salary and a maximum level of 200% of base salary. Mr. Cooney also participates in our Employment Security Plan discussed below. The terms of Mr. Cooney’s employment were set through comprehensive negotiations prior to his employment and were influenced by market levels for his position as well as his experience and professional achievements.
Potential Payments upon Termination or Change in Control
Certain of our named executive officers participate in an Employment Security Plan or are parties to an Employment Security Agreement that provide for payments in the event of termination of employment or in connection with a change in control. We believe that the interests of our stockholders are best served if the interests of our named executive officers are aligned with them in the event of a change in control. Providing change in control benefits are intended to eliminate, or at least reduce, the reluctance of these named executive officers to pursue potential change in control transactions that may be in the best interests of our stockholders.
Upon a qualifying termination, as defined in the respective Employment Security Plan or Employment Security Agreement, other than during a protection period (which is as defined as a period beginning six months prior to a change of control event and ending 24 months after the change of control event), a participant will receive severance equal to the participant’s then-current base salary for the year in which the termination occurs. Upon a qualifying termination during a protection period, a participant will receive severance equal to the sum of the participant’s then-current base salary plus the maximum bonus for the participant under the applicable bonus plan as established by our Board of Directors for the year in which the termination
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occurs, and all of the participant’s unvested equity-based compensation will vest. If the amounts payable to a participant under the Employment Security Plan or respective Employment Security Agreement result in the participant becoming liable for the payment of any excise taxes pursuant to Section 4999 of the Internal Revenue Code of 1986, as amended, the participant will receive the greater on an after-tax basis of  (a) the severance benefits payable or (b) a reduced severance benefit to avoid the imposition of the 280G excise tax.
An individual will receive the foregoing severance benefits only if he or she delivers a general release and separation agreement. Our obligation to provide such severance benefits is also conditioned upon the individual’s continued compliance with confidentiality, non-competition, non-solicitation and non-disparagement covenants.
Certain of the named executive officers have joinder agreements which modify specific provisions of the Employment Security Plan as follows:
J. Eric Cooney . Upon a qualifying termination during a protection period, Mr. Cooney will receive severance equal to the sum of two and one-half times his then-current base salary plus two and one-half times the maximum bonus for him under the applicable bonus plan established by the Board of Directors for the year in which the termination occurs. If the amounts payable to Mr. Cooney under the Employment Security Plan would constitute an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended, the amounts payable will be grossed-up for the payment of taxes. We believe that it is particularly important for the Chief Executive Officer’s interests to be aligned with those of our stockholders in a change of control since that position is of critical importance to the process and is often at-risk of termination following a change of control. As such, additional protections for Mr. Cooney, including the tax gross-up, were deemed appropriate.
Steven A. Orchard . Mr. Orchard’s joinder agreement requires him to provide us two months prior written notice of his intention to terminate employment. If accepted by us, we will pay Mr. Orchard’s base salary and health benefits during the two-month notice period.
Kevin M. Dotts and Peter G. Bell . Messrs. Dotts and Bell have individual Employment Security Agreements, the terms of which are substantially similar to the terms of the Employment Security Plan described above, with the addition of a two-month notice provision as described above for Mr. Orchard.
The following table sets forth the benefits potentially payable to each named executive officer in the event of a change of control of our company. These amounts are calculated on the assumption that a qualifying termination and the change of control event took place on December 31, 2014. For the value of accelerated vesting of equity awards, we determined the option spread and value restricted stock using a value of  $7.96, the closing price of our common stock on December 31, 2014.
Name (1)
Severance
Payment
($)
Accelerated
Vesting of
Equity
Awards
($)
J. Eric Cooney 4,623,075 (2) 883,684
Kevin M. Dotts 745,758 557,553
Steven A. Orchard 548,437 224,696
Peter G. Bell 312,500 308,300
(1) Mr. Primeau is excluded from the table because he terminated employment on December 31, 2014 and is not eligible to receive any benefits in connection with a change in control of the company.
(2) The severance pay reflected for Mr. Cooney does not include any payment for the gross-up of taxes which could be triggered in the event of a change in control.
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Summary Compensation Table
The following table presents information regarding compensation for our named executive officers for services rendered during 2014, 2013 and 2012.
Name and Principal
Position
Year
Salary
Bonus
Stock
Awards (1)
Option
Awards (2)
Non-Equity
Incentive
Plan
Compensation (3)
All Other
Compensation (4)
Total
J. Eric Cooney
Chief Executive Officer and President
2014 $  614,615 $  316,478 $ 638,633 $  359,550 $  8,855 $  1,938,131
2013 600,000 1,136,260 184,388 8,640 1,929,288
2012 600,000 279,332 793,925 393,300 8,490 2,075,047
Kevin M. Dotts
Chief Financial Officer
2014 323,132 131,781 265,921 122,871 754 844,459
2013 314,650 $ 94,860 (5) 476,301 62,852 758 949,421
2012 105,718 68,717 (6) 711,000 (7) 289,471 (7) 156 1,175,062
Steven A. Orchard
SVP and General Manager, Data Center and
   Network Services
2014 273,139 88,063 177,705 79,893 8,068 626,868
2013 265,460 80,184 (5) 307,050 32,632 6,642 691,968
2012 238,777 341,149 (8) 186,572 72,305 7,044 845,847
Peter G. Bell (9)
SVP, Global Sales
2014 60,577 131,250 (10) 197,100 (11) 124,785 (11) 238 513,950
Christian Primeau (12)
Former SVP and General Manager, Cloud and
   Hosting
2014 231,857 (13) 1,152 233,009
(1) Represents the full grant date fair value of restricted stock awards granted in the years shown, calculated in accordance with FASB ASC Topic 718. We value restricted stock based on the closing market price of our common stock reported on Nasdaq on the various grant dates. For valuation assumptions, see Note 13 to our Consolidated Financial Statements for the fiscal years ended December 31, 2014, 2013 and 2012. The values in this column may not correspond to the actual value that the named executive officer will realize at the time that the restricted stock vests.
(2) Represents the full grant date fair value of stock options granted in the years shown, calculated in accordance with FASB ASC Topic 718. We value stock options using the Black-Scholes model. For additional valuation assumptions, see Note 13 to our Consolidated Financial Statements for the fiscal years ended December 31, 2014, 2013 and 2012. The values in this column may not correspond to the actual value that the named executive officer will realize at the time that the stock options vest.
(3) Represents amounts earned under our annual short-term incentive plans. The amounts reported for 2014 were earned under our 2014 STIP and paid in March 2015, the amounts reported for 2013 were earned under our 2013 Short-Term Incentive Plan and paid in March 2014 and the amounts reported for 2012 were earned under our 2012 Short-Term Incentive Plan and paid in March 2013.
(4) The compensation listed in this column for 2014 includes: (a) matching contributions under our 401(k) savings plan to each of the named executive officers as follows: $7,800 for Mr. Cooney; $7,800 for Mr. Orchard and $215 for Mr. Primeau; and (b) premiums on life insurance policies for each of the named executive officers as follows: $1,055 for Mr. Cooney; $754 for Mr. Dotts; $268 for Mr. Orchard; $238 for Mr. Bell and $937 for Mr. Primeau.
(5) Our Compensation Committee approved bonuses to certain employees, including named executive officers, who made significant contributions in the acquisition of iWeb and the related credit facility. The listed bonus was paid in cash on March 7, 2014.
(6) In connection with his commencement of employment, Mr. Dotts was eligible to receive a guaranteed bonus under our 2012 Short Term Incentive Plan equal to his target amount prorated based on salary earned in 2012.
(7) The value of restricted stock and stock options reported in the table represents the value of awards granted to Mr. Dotts in connection with his commencement of employment.
(8) Of the reported amount, 25,000 shares of restricted stock were granted to Mr. Orchard in connection with the closing of the acquisition of Voxel Holdings, Inc. for purposes of retention and 20,000 were granted to Mr. Orchard in connection with his 2012 promotion to Senior Vice President, Development and Operations.
(9) Mr. Bell’s employment began on October 2, 2014.
(10) In connection with his commencement of employment, Mr. Bell was eligible to receive a sign-on bonus and a guaranteed bonus for corporate performance. Of the reported amount, $100,000 represents the sign-on bonus (one-half paid in 2014 and the other half paid in March 2015) and $31,250 represents his target amount of variable compensation based on corporate performance prorated based on his tenure with us.
(11) The value of restricted stock and stock options reported in the table represents the value of awards granted to Mr. Bell in connection with his commencement of employment.
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(12) Mr. Primeau joined us in November 2013 upon closing of the acquisition of iWeb and he became an executive officer of the company in 2014.
(13) Mr. Primeau’s employment terminated on December 31, 2014. Given that Mr. Primeau was not employed on the payment date under our 2014 Short Term Incentive Plan, he did not receive non-equity incentive plan compensation in 2015 for service in 2014.
Grants of Plan-Based Awards
The following table provides information about plan-based awards granted to the named executive officers in 2014:
Award
Type
Grant
Date
Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards (1)
All
Other
Stock
Awards:
Number
of Shares
of Stock
or Units (2)
(#)
All
Other
Stock
Awards:
Number
of
Securities
Underlying
Options (3)
(#)
Exercise
or Base
Price of
Option
Awards (4)
($/Sh)
Grant
Date
Fair
Value
of
Stock
and
Option
Awards (5)
($)
Name and
Principal Position
Threshold
($)
Target
($)
Maximum
($)
J. Eric Cooney
Chief Executive Officer and President
Restricted Stock
2/21/2014 39,909 316,478
Stock Option 2/21/2014 198,722 7.93 638,633
2014 STIP 2/18/2014 $  307,308 $  614,615 $  1,229,230
Kevin M. Dotts
Chief Financial Officer
Restricted Stock
2/21/2014 16,618 131,781
Stock Option 2/21/2014 82,746 7.93 265,921
2014 STIP 2/18/2014 105,018 210,035 420,072
Steven A. Orchard
SVP and General Manager,
   Data Center and Network Services
Restricted Stock
2/21/2014 11,105 88,063
Stock Option 2/21/2014 55,296 7.93 177,705
2014 STIP 2/18/2014 68,285 136,570 273,139
Peter G. Bell
SVP, Global Sales
Restricted Stock
10/01/2014 (6) 30,000 197,100
Stock Option 10/01/2014 (6) 50,000 6.57 124,785
2014 Bonus (7) 10/01/2014 31,250 62,500
Christian Primeau
Former SVP and General Manager,
   Cloud and Hosting
2014 STIP (8) 2/18/2014 57,965 115,929 231,857
(1) Except as noted for Mr. Bell in footnote 7, amounts in these columns represent the threshold, target and maximum awards set for the 2014 STIP. The actual awards paid for 2014 performance are included in the Summary Compensation Table above under the column entitled “Non-Equity Incentive Plan Compensation.”
(2) We granted the restricted stock under our 2014 Stock Plan to named executive officers. The shares of restricted stock vest annually in four equal installments beginning on the first anniversary of the grant date.
(3) We granted stock options under our 2014 Stock Plan to named executive officers. The stock options vest 25% on the first anniversary of the grant date and in 36 equal monthly installments thereafter.
(4) The exercise price of stock options is equal to the closing price of our common stock reported on Nasdaq on the grant date.
(5) Represents the full grant date fair value of stock options and restricted stock granted in 2014, calculated in accordance with FASB ASC Topic 718. For valuation assumptions, see footnotes 1 and 2 to the Summary Compensation Table.
(6) The amounts reported reflect grants made to Mr. Bell upon his commencement of employment.
(7) Mr. Bell did not participate in the 2014 STIP. Mr. Bell’s offer letter provided for variable compensation based on corporate performance, with a guaranteed minimum bonus for performance in 2014 of  $31,250.
(8) Mr. Primeau’s employment ended on December 31, 2014. Given that Mr. Primeau was not employed on the payment date under our 2014 STIP, he did not receive non-equity incentive plan compensation in 2015 for service in 2014.
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Outstanding Equity Awards at Fiscal Year-End
The following table lists the outstanding stock options and restricted stock awards for each named executive officer as of December 31, 2014:
Option Awards
Stock Awards
Name and Principal
Position
Grant Date
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
Number of
Securities
Underlying
Unexercised
Options
Unexercisable (1)
(#)
Option
Exercise
Price
($)
Option
Expiration
Date
Number of
Shares of Stock
That Have Not
Vested (2)
(#)
Market Value of
Shares of Stock
That Have Not
Vested (3)
($)
J. Eric Cooney
Chief Executive Officer and President
2/21/2014 198,722 $ 7.93 2/20/2024
2/21/2014 39,909 $ 317,676
2/22/2013 114,446 135,254  8.72 2/21/2023
2/24/2012 122,258 50,342 7.77 2/23/2022
2/24/2012 17,974  143,073
2/25/2011 232,683 10,117 7.03 2/24/2021
2/26/2010 248,830 5.03 2/25/2020
3/16/2009 450,000 2.24 3/15/2019
3/16/2009 50,000 398,000
Kevin M. Dotts
Chief Financial Officer (4)
2/21/2014 82,746 7.93 2/20/2024
2/21/2014 16,618 132,279
2/22/2013 47,973 56,697 8.72 2/21/2023
8/30/2012 40,833 29,167 7.11 8/29/2022
8/30/2012 50,000 398,000
Steven A. Orchard
SVP and General Manager, Data Center and Network    Services
2/21/2014 55,296 7.93 2/20/2024
2/21/2014 11,105 88,396
2/22/2013 30,927 36,549 8.72 2/21/2023
6/21/2012 10,000 79,600
2/24/2012 4,224 33,623
2/24/2012 28,730 11,831 7.77 2/23/2022
2/25/2011 65,616 2,853 7.03 2/24/2021
2/25/2011 2,075 16,517
2/26/2010 58,905 5.03 2/25/2020
2/26/2010 1,899 14,280
7/14/2009 15,200 2.94 7/13/2019
3/25/2009 24,800 2.54 3/24/2019
9/28/2006 357 14.46 9/27/2016
3/15/2006 7,500 7.40 3/14/2016
1/18/2006 700 5.30 1/17/2016
Peter G. Bell (5)
Former SVP, Global Sales
10/01/2014 50,000 6.57 9/30/2024
10/01/2014 30,000 238,800
Christian Primeau (6)
Former SVP and General Manager,
   Cloud and Hosting
(1) All unexercisable options become exercisable on the vesting date. Stock options vest 25% on the first anniversary of the grant date and in 36 equal monthly installments thereafter.
(2) Shares of restricted stock generally vest annually in four equal installments beginning on the first anniversary of the grant date.
(3) The dollar values are calculated using a per share stock price of  $7.96, the closing price of our common stock reported on Nasdaq on December 31, 2014.
(4) Mr. Dotts began his employment in 2012. The amounts reported for 2012 reflect grants made to him upon his commencement of employment.
(5) Mr. Bell began his employment in 2014. The amounts reported for 2014 reflect grants made to him upon his commencement of employment.
(6) All outstanding unvested restricted stock units granted to Mr. Primeau were forfeited upon his termination of employment on December 31, 2014.
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Stock Vested in 2014
The following table provides information with respect to restricted stock that vested during 2014:
Stock Awards
Name and Principal
Position
Number of
Shares
Acquired
on Vesting
(#)
Value
Realized on
Vesting
($) (1)
J. Eric Cooney
Chief Executive Officer and President
117,011 $ 872,551
Kevin M. Dotts
Chief Financial Officer
25,000 171,000
Steven A. Orchard
SVP and General Manager, Data Center and Network Services
11,086 83,130
Peter G. Bell
SVP, Global Sales
Christian Primeau
Former SVP and General Manager, Cloud and Hosting
33,333 258,331
(1) The value realized on the vesting of restricted stock is equal to the number of shares of restricted stock vested multiplied by the closing price of our common stock on the vesting date.
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis and, based on this review and discussion, recommends that the Compensation Discussion and Analysis be included in the proxy statement and filed with the SEC.
The Compensation Committee
   Charles B. Coe, Chairman
   Patricia L. Higgins
   Michael A. Ruffolo
CERTAIN RELATIONSHIPS AND TRANSACTIONS
During the year ended December 31, 2014, we did not engage in any transactions, nor are any such transactions currently proposed, in which a related person had or will have a direct or indirect material interest.
As part of our Code of Conduct, available for viewing in the “Corporate Governance” section on the Investor Relations page of our website at www.internap.com , employees, officers and directors are expected to make business decisions and take actions based upon the best interests of our company and not based upon personal relationships or benefits.
The Nominations and Governance Committee reviews for approval all direct or indirect transactions or proposed transactions with any officer or director (or their family members) or any person in which any officer or director of our company has any interest. To identify any transactions with such related persons, each year we require our officers and directors to complete questionnaires identifying any transactions with the company in which the officer or director or their family members have an interest. Additionally, at the end of each fiscal quarter, certain employees, including all named executive officers, are required to confirm to us that they have not engaged in any transaction that would be required to be disclosed in our proxy statement.
The Nominations and Governance Committee will approve only those related person transactions that are in the best interests of the company and its stockholders (or not inconsistent with the best interests of the company or its stockholders).
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AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors consists of three directors who are independent under Nasdaq rules, the Securities and Exchange Act of 1934, as amended, and rules of the SEC, as applicable to audit committee members. The Audit Committee represents and assists the Board in fulfilling its oversight responsibility regarding the integrity of the company’s financial statements and the financial reporting and accounting process, the systems of internal accounting and financial controls, the performance of the internal audit function and the independent registered public accounting firm, the qualifications and independence of the registered public accounting firm, the annual independent audit of our financial statements and compliance with legal and regulatory requirements.
The Audit Committee is directly responsible in its capacity as a committee of the Board of Directors for appointing, retaining, compensating, overseeing, evaluating and terminating (if appropriate) the company’s independent registered public accounting firm. The company’s management has primary responsibility for the financial statements and the financial reporting process, including the application of accounting and financial principles, the preparation, presentation and integrity of the financial statements and the systems of internal controls and other procedures designed to promote compliance with accounting standards and applicable laws and regulations. The company’s independent registered public accounting firm is responsible for expressing an opinion on the conformity of the company’s financial statements with generally accepted accounting principles and for auditing the effectiveness of the company’s internal control over financial reporting.
The Audit Committee has taken steps to provide assurances regarding Audit Committee composition and procedures, the independence of the company’s independent registered public accounting firm and the integrity of the company’s financial statements and disclosures. These steps include: (a) reviewing the Audit Committee Charter; (b) reviewing the Code of Conduct; (c) maintaining a procedure to allow employees, stockholders and the public to report concerns regarding the company’s financial statements, internal controls and disclosures through the Ethics Hotline; and (d) reviewing procedures for the Audit Committee to pre-approve all audit and non-audit services provided by the company’s independent registered public accounting firm.
As part of its supervisory duties, the Audit Committee reviewed the company’s audited financial statements for the fiscal year ended December 31, 2014 and discussed those financial statements with the company’s management, internal auditors and independent registered public accounting firm with and without management present. The Audit Committee also reviewed and discussed the following with the company’s management, the internal auditors and independent registered public accounting firm with and without management present:

accounting and financial principles and significant assumptions, estimates and matters of judgment used in preparing the financial statements;

revenue recognition;

goodwill and other intangible assets;

property and equipment;

exit activities and restructuring;

income taxes;

stock-based compensation;

capitalized software costs; and

system of internal control.
The Audit Committee has discussed with the company’s independent registered public accounting firm the results of the independent registered public accounting firm’s examinations and the judgments of the independent registered public accounting firm concerning the quality, as well as the acceptability, of the company’s accounting principles and such other matters that it is required to discuss with the independent registered public accounting firm under applicable rules, regulations or generally accepted auditing standards, including the matters required to be discussed by the rules of the Public Company Accounting Oversight Board (“PCAOB”). The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by the standards of the PCAOB in Rule 3200T. In addition, the Audit Committee has received from the independent registered public accounting firm the written disclosures and the letter required by the applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence rules and has discussed their independence from the company and the
36

company’s management with them, including a consideration of the compatibility of non-audit services with their independence, the scope of the audit and the scope of all fees paid to the independent registered public accounting firm during the year. After and in reliance upon the reviews and discussions described above, the Audit Committee recommended to the company’s Board of Directors that the audited financial statements for the fiscal year ended December 31, 2014, be included in the company’s Annual Report on Form 10-K for the year then ended that was filed with the SEC.
Audit Committee
Gary M. Pfeiffer, Chairman
Daniel C. Stanzione
Debora J. Wilson
The foregoing report of the Audit Committee shall not be deemed to be incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, unless we specifically incorporate this information by reference, and shall not otherwise be deemed filed under such acts.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Audit Committee has appointed PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2015. PricewaterhouseCoopers LLP has audited our financial statements since our formation in 1996. A representative of PricewaterhouseCoopers LLP is expected to be present at the annual meeting, will have an opportunity to make a statement if he or she so desires and will be available to respond to appropriate questions.
Stockholder ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm is not required by our bylaws or otherwise. The Board of Directors, however, is submitting the selection of PricewaterhouseCoopers LLP to our stockholders for ratification as a matter of good corporate governance. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether to retain this firm. Even if the selection is ratified, the Audit Committee in its discretion may decide to appoint a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of us and our stockholders.
Audit Fees
The following table shows the fees paid or accrued by us for the audit and other services provided by PricewaterhouseCoopers LLP for the fiscal years ended December 31, 2014 and 2013:
2014
2013
Audit Fees (1) $  1,394,242 $  1,037,475
Audit-Related Fees (2) 153,496
Tax Fees (3) 25,000 20,000
All Other Fees (4) 3,928 28,800
Total $ 1,423,170  $ 1,239,771
(1) Fees related to the audit of our annual financial statements, including the audit of the effectiveness of internal control over financial reporting, reviews of the quarterly financial statements filed on Forms 10-Q and international statutory filings.
(2) Fees primarily related to SAS70/SSAE16 audits of our company-controlled data centers.
(3) Fees related to services performed in conjunction with other professional services, such as transfer pricing.
(4) Fees related to other services for iXBRL and information technology threats and safeguards.
Approval of Audit and Permissible Non-Audit Services
Our Audit Committee Charter requires the Audit Committee to review and approve all audit services and all permissible non-audit services to be performed for us by our independent registered public accounting firm. The Audit Committee will not approve any services that are not permitted by SEC rules.
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The Audit Committee pre-approved all audit and audit related, tax and non-audit related services to be performed for us by our independent registered public accounting firm.
Your Board of Directors unanimously recommends that you vote FOR the ratification of the appointment of
PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm
for the fiscal year ended December 31, 2015.
PROPOSAL 3
ADVISORY RESOLUTION APPROVING EXECUTIVE COMPENSATION
We are asking stockholders to indicate their support for our named executive officer compensation, as described in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their view on compensation for our named executive officers. The say-on-pay vote is advisory and, therefore, not binding on us. Our Board of Directors and Compensation Committee value the opinions of our stockholders and will review and consider the voting results when making future decisions regarding our executive compensation program. The say-on-pay vote is required pursuant to Section 14A of the Securities Exchange Act of 1934, as amended. In 2011, our stockholders voted on an advisory basis to hold say-on-pay votes annually. Based on those results, the Board of Directors adopted a policy of providing a say-on-pay vote each year. We expect to hold the next vote on the frequency of future say-on-pay votes in 2017.
Rationale and Scope of Proposal
As described above in the “Compensation Discussion and Analysis” section of this proxy statement, the Compensation Committee has structured the executive compensation program to achieve the following key objectives:

attract and retain talented executive officers who will lead our company and achieve and inspire superior performance;

provide incentives for achieving specific near-term business unit and corporate goals and reward the attainment of those goals at pre-established levels;

provide incentives for achieving longer-term financial goals and reward attaining those goals; and

align the interests of executive officers with those of the stockholders through incentives based on increasing stockholder value.
The executive compensation program achieves these objectives, in part, by:

balancing fixed compensation (base salaries) with performance-based compensation (annual bonuses and long-term incentives);

rewarding annual performance while maintaining emphasis on longer-term objectives; and

blending cash, non-cash, short- and long-term compensation components and current and future compensation components.
In 2014, we achieved a number of important milestones positioning our company for future growth and success. During the year we performed strongly, achieving the highest levels of revenue and profitability in company history:

revenue increased 18% to $335.0 million from $283.3 million in 2013;

adjusted EBITDA increased 36% year-over-year to $78.7 million, which is our fifth consecutive year of adjusted EBITDA growth; and

adjusted EBITDA margin expanded by 300 basis points to 23.5%.
We also made strategic investments to drive innovation, enhance our competitiveness, solidify our growth and expand the value of our company. We continued to execute our strategy to deliver profitable growth by leveraging our investments in colocation, hosting and cloud services, which we refer to as our core datacenter services. Core datacenter services revenue increased 46% to $195.4 million in 2014. The strategic shift we have made in focusing on higher-margin company-controlled data center hosting and cloud services is delivering results and remains a key driver for our long-term profitable growth. Our financial performance in 2014 highlights the successful execution of our data center services strategy and the solid operating leverage we are building into our business model.
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In furtherance of our focus on our data center and hosting services, we successfully integrated iWeb, a provider of hosting and cloud services. The acquisition accelerated our transition to data center services and added the complex and strategically important e-commerce/online route-to-market capabilities. We also successfully completed the data center migration in our New York Metro market, which further improved company profitability.
We urge stockholders to read the “Compensation Discussion and Analysis” beginning on page 18 of this proxy statement, which describes in more detail how our executive compensation program operates and is designed to achieve our compensation objectives. We also encourage stockholders to read the Summary Compensation Table and other related compensation tables and narratives, appearing on pages 32 through 35, which provide detailed information on the compensation of our named executive officers. The Compensation Committee and the Board of Directors believe that the policies and procedures articulated in the “Compensation Discussion and Analysis” are effective in achieving our goals and that the compensation of our named executive officers reported in this proxy statement has supported and contributed to our recent and long-term success.
Recommendation of the Board
In accordance with recently adopted rules of the SEC, and as a matter of good corporate governance, we ask stockholders to approve the following advisory resolution:
RESOLVED, that our stockholders approve, on an advisory basis, the compensation of our named executive officers disclosed in the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and narratives in the proxy statement for our 2015 Annual Meeting of Stockholders.
Voting
This Proposal is non-binding on us and our Board of Directors. Marking the proxy card “For” indicates support; marking the proxy card “Against” indicates lack of support. You may abstain by marking the “Abstain” box on the proxy card.
Your Board of Directors unanimously recommends that you vote FOR approval
of the advisory resolution approving executive compensation.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and SEC regulations require our directors and executive officers and persons who own more than 10% of our outstanding common stock, to file reports of ownership and changes in ownership of our common stock with the SEC. Directors, executive officers and greater than 10% beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file.
Based solely on our review of copies of these reports or of certifications to us that no report was required to be filed, we believe that during 2014 all of our directors and executive officers filed the required reports under Section 16(a) on a timely basis.
ADDITIONAL INFORMATION
Stockholders List
A list of stockholders entitled to vote at the annual meeting will be available for review by our stockholders at the office of Tashia L. Rivard, Corporate Secretary of Internap Corporation, located at One Ravinia Drive, Suite 1300, Atlanta, Georgia, during ordinary business hours for the 10-day period before the meeting.
Director and Officer Indemnification
We indemnify our directors and named executive officers to the fullest extent permitted by law so that they will be free from undue concern about personal liability in connection with their service to us.
Stockholder Proposals for Inclusion in Next Year’s Proxy Statement
Pursuant to Rule 14a-8 under the Exchange Act, some stockholder proposals may be eligible for inclusion in our 2016 proxy statement and proxy card. Any such stockholder proposals must be submitted in writing to our Corporate Secretary no later than December 4, 2015.
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You should address any stockholder proposals to the attention of Tashia L. Rivard, Corporate Secretary, Internap Corporation, One Ravinia Drive, Suite 1300, Atlanta, Georgia 30346.
Other Stockholder Proposals for Presentation at Next Year’s Annual Meeting
Our bylaws require that any stockholder proposal that is not submitted for inclusion in next year’s proxy statement under Rule 14a-8 under the Exchange Act, but is instead sought to be presented directly at the annual meeting, must be received by our Secretary at our executive offices in Atlanta, Georgia not less than 90 nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting, except in certain circumstances. For the purposes of the 2016 annual meeting, proposals submitted must be received between January 29, 2016 and the close of business on February 29, 2016. You should address all stockholder proposals to the attention of Tashia L. Rivard, Corporate Secretary, Internap Corporation, One Ravinia Drive, Suite 1300, Atlanta, Georgia 30346, and include the information and comply with the requirements set forth in our bylaws.
Our bylaws set out specific requirements that the written notice of proposal must satisfy, including that the notice must set forth a brief description of the business desired to be brought at the meeting, the reasons for conducting such business at the meeting and other specified matters. In addition, our bylaws require that the written notice include information about the proposing stockholder including, among other things, the name, address, class and number of our shares that are owned beneficially and of record, any relevant agreements, arrangements or understandings between the stockholder and any affiliates or associates, and any arrangements having the effect of mitigating a decrease in our share price or affecting the voting power of the stockholder, including derivative positions.
Copies of the provisions of our bylaws applicable to stockholder nominations and proposals will be forwarded to any stockholder upon written request.
Solicitation of Proxies
We will pay the expenses of solicitation of proxies for the annual meeting. Solicitations may be made in person or by telephone, by our officers and employees or by nominees or other fiduciaries who may mail materials to or otherwise communicate with the beneficial owners of shares held by the nominees or other fiduciaries. Upon request, we will reimburse brokers, dealers, banks and trustees, or their nominees, for reasonable expenses incurred by them in forwarding material to beneficial owners of our common stock.
Delivery of Documents to Stockholders Sharing an Address
If you are the beneficial owner, but not the record holder, of shares of our common stock, your broker, bank or other nominee may only deliver one copy of this proxy statement and our 2014 Annual Report to Stockholders to multiple stockholders who share an address, unless that nominee has received contrary instructions from one or more of the stockholders. We will deliver promptly, upon written or oral request, a separate copy of this proxy statement and our annual report to a stockholder at a shared address to which a single copy of the documents was delivered. A stockholder who wishes to receive a separate copy of the proxy statement and annual report, now or in the future, should submit this request by writing to Internap Corporation, One Ravinia Drive, Suite 1300, Atlanta, Georgia 30346, Attention: Investor Relations, (404) 302-9700. Beneficial owners sharing an address who are receiving multiple copies of proxy materials and who wish to receive a single copy of such materials in the future should make a request directly to their broker, bank or other nominee.
Electronic Access to Proxy Statement and Annual Report
Our proxy statement for the 2015 Annual Meeting of Stockholders and the Annual Report to Stockholders for the fiscal year ended December 31, 2014 are available at http://ir.internap.com/proxy14.cfm .
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INTERNAP CORPORATION ONE RAVINIA DRIVESUITE 1300ATLANTA, GA 30346 VOTE BY INTERNET - www.proxyvote.comUse the Internet to transmit your voting instructions and for electronic deliveryof information up until 11:59 P.M. Eastern Time the day before the cut-off dateor meeting date. Have your proxy card in hand when you access the web siteand follow the instructions to obtain your records and to create an electronicvoting instruction form.ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALSIf you would like to reduce the costs incurred by Internap Corporation in mailingproxy materials, you can consent to receiving all future proxy statements, proxycards and annual reports electronically via e-mail or the Internet. To sign up forelectronic delivery, please follow the instructions above to vote using the Internetand, when prompted, indicate that you agree to receive or access proxy materialselectronically in future years.VOTE BY PHONE - 1-800-690-6903Use any touch-tone telephone to transmit your voting instructions up until11:59 P.M. Eastern Time the day before the cut-off date or meeting date.Have your proxy card in hand when you call and then follow the instructions.VOTE BY MAILMark, sign and date your proxy card and return it in the postage-paidenvelope we have provided or return it to Vote Processing, c/o Broadridge,51 Mercedes
Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: M83216-P62013 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY INTERNAP CORPORATION For Withhold For All To withhold authority to vote for any individual THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1, 2 AND 3. All All Except nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. Vote on Directors1.To vote on the election of the three director nominees named in the proxy statement to serve until the 2018 annual meeting and until their successors are elected and qualified, or until such directors' earlier death, resignation or removal (except as indicated to the contrary on the right). 01) Charles B. Coe for a term to expire at the 2018 annual meeting02) J. Eric Cooney for a term to expire at the 2018 annual meeting03) Patricia L. Higgins for a term to expire at the 2018 annual meeting Vote on Proposals For Against Abstain 2.To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2015; and3.To approve, by non-binding vote, executive compensation.In their discretion, the proxies are authorized to vote upon such other business as may properly come before the annual meeting and any and all adjournments thereof.This Proxy will be voted in the manner directed by the undersigned stockholder. If this Proxy is returned and no direction is provided by theundersigned stockholder, this Proxy will be voted FOR ALL NOMINEES in Proposal 1, "FOR" Proposal 2 and "FOR" Proposal 3.Please indicate if you plan to attend this meeting.YesNoSignature [PLEASE SIGN WITHIN BOX]DateSignature (Joint Owners)Date

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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.M83217-P62013INTERNAP CORPORATIONPROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE2015 ANNUAL MEETING OF STOCKHOLDERSRevocable ProxyCOMMON STOCKThe undersigned hereby appoints John D. Maggard and Tashia L. Rivard, and each of them, proxies, with full power of substitution, to act for and in the name of the undersigned to vote all shares of common stock of Internap Corporation (the "Company") that the undersigned is entitled to vote at the 2015 Annual Meeting of Stockholders of the Company, to be held on Friday, May 29, 2015, at 10:00 a.m., Eastern Time, at the Crowne Plaza Atlanta Perimeter at Ravinia, 4355 Ashford Dunwoody Road, Dekalb Conference Room, Atlanta, Georgia 30346, and at any and all adjournments thereof, with all powers that the undersigned would possess if personally present, upon and in respect of the matters listed on the reverse side and in accordance with the instructions listed on the reverse side, with discretionary authority as to any and all other matters that may properly come before the meeting.PROXY SOLICITED BY THE BOARD OF DIRECTORSThis proxy card will be voted as directed. If no
instructions are specified, this proxy card will be voted "FOR ALL NOMINEES" in Proposal 1 and "FOR" Proposals 2 and 3. If any other business is presented at the annual meeting, this proxy card will be voted by the proxies in their best judgment. At the present time, the Board of Directors knows of no other business to be presented at the annual meeting.The undersigned may elect to withdraw this proxy card at any time prior to its use by: (i) giving written notice to the Corporate Secretary; (ii) executing and delivering to the Corporate Secretary a duly executed proxy card bearing a later date; or (iii) attending at the annual meeting and voting in person.Please mark, date and sign exactly as your name appears on this proxy card. When shares are held jointly, both holders should sign. When signing as attorney, executor, administrator, trustee, guardian, or custodian, please give your full title. If the holder is a corporation or a partnership, the full corporate or partnership name should be signed by a duly authorized officer.PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE(Continued, and to be signed and dated, on the reverse side)