Friday, May 1, 2009

Internap - NOTICE OF 2009 ANNUAL MEETING OF STOCKHOLDERS

Internap has come out with its notice of 2009 annual meeting of stockholders and 2008 annual report.

Giannio, on the IV MB, has already selected the most valuable infos out of them:

bye bye poison pill

from the proxy statement filed today:

In April, 2007, the Board of Directors instituted a Preferred Stock Rights Agreement. Because Shareholder Rights Plans (typically known as poison pills) dramatically alter the balance of power between shareholders and the Board of Directors, it is important to put safeguards in place to protect against the Board supplanting the rights of the shareholders.
The current poison pill has several provisions that are not in-line with current best practices. First, it has never been subject to a vote of the shareholders. Second, the flip-in percentage of 15% is too low, effectively preventing shareholder’s from gaining enough shares to influence the governance of the Company, and therefore adversely shifting the balance of power between the Board of Directors and shareholders. Third, the 10 year sunset provision is too long. The provisions in this proposal would bring any future Shareholder Rights offerings into compliance with current governance best practices, such as those recommended by the RiskMetrics Group (formerly known as Institutional Shareholder Services, Inc. or ISS).
To correct these deficiencies, we propose the Board of Directors terminate the current Agreement and put provisions in place to make sure that any future rights plans are in-line with current best practices. If the TIDE Committee of the Board of Directors feels that it is still in the best interest of the shareholders, and other relevant parties, to have a rights agreement in place, it should place a proposal for a new rights agreement that meets all of the criteria of this proposal on the proxy for this year’s (or a future) Shareholder meeting. This would bring the rights agreement into compliance with current best practices and concurrently allow shareholders to vote on the matter.

cooney letter from 2008 annual report

Since joining the Internap team several weeks ago, one of the most frequent questions

I have been asked is, “What attracted you to join Internap?” My answer is simple: Internap

competes in compelling markets, serves a broad and diverse customer base and has a

unique set of assets to underpin a long-term profitable growth strategy.

Throughout our history, Internap has developed a reputation for delivering best-in-class technologies

and services. Building on our patented Internet route optimization technology, our customers have

access to IP services that are among the best-performing and most reliable in the industry. The

combination of our technology leadership and a world-class 24/7 customer support organization

enables us to deliver industry-leading, 100 percent service level commitments. We are successfully

leveraging these strengths across all of our business units: Data Center Services, IP Services and

Content Delivery Networks.

Of particular value in these challenging economic times is the Company’s strong financial position.

We ended the year with $54 million in cash and marketable securities, more than two times the balance

of our interest-bearing debt and capital leases. Internap has also proven its ability to generate consistent

cash to run the Company’s operations; 2008 cash from operations was $38 million, up 38 percent over

the prior year. These characteristics are important because they give us the flexibility to focus on the

operational and strategic drivers of sustained profitability.

Even in my short time with Internap, it is clear to me that the staff brings an extraordinary level of

dedication, commitment and professionalism to their roles. With this motivated team, uniquely

differentiated assets and growing markets, we are committed to deliver long-term profitable growth

for our stockholders.

Sincerely,

J. Eric Cooney

President and Chief Executive Officer

April 30, 2009

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