Company Name: Internap Network Services Corp.
Public Availability Date: July 9, 2007
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
June 18, 2007
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, DC 20549
Attention: Office of Chief Counsel
Re: Internap Network Services Corporation Commission File Number 000-27265
Intention to Omit Shareholder Proposal of Gak Limited
Ladies and Gentlemen:
We are writing as counsel to Internap Network Services Corporation ("Internap")
pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Internap hereby notifies the U.S. Securities and Exchange
Commission (the "Commission") of its exclusion from its proxy statement and form
of proxy (the "Proxy Materials") for Internap's 2007 Annual Meeting of
Stockholders (the "2007 Annual Meeting") the shareholder proposal (the
"Shareholder Proposal") submitted to Internap by Mr. Howard Hertz on behalf of
Gak Limited (the "Proponent") on the grounds that the Shareholder Proposal was
not timely.
The Shareholder Proposal, a copy of which is attached hereto as Exhibit A, was
sent by the Proponent via e-mail on June 11, 2007. Internap filed its definitive
Proxy Materials with the Commission on April 25, 2007.
Rule 14a-8(c)(1) states that the deadline for submitting shareholder proposals
for an annual meeting may be found in the company's proxy statement for the
prior year. Internap's proxy statement dated April 26, 2006, included the
following statement under the beading "Stockholder Proposals for 2007 Annual
Meeting":
Proposals of stockholders, including nominations for the board of directors,
intended to be presented at the 2007 annual meeting must be received by us at
our executive offices in Atlanta, Georgia, on or before January 2, 2007 to be
eligible for inclusion in our proxy-statement and form of proxy relating to that
meeting and to be introduced for action at the meeting. In accordance with our
bylaws, for business to be properly brought before a meeting, but not included
in the proxy, a stockholder must submit a proposal, including nominations for
the board of directors, not earlier than February 21, 2007 and not later than
March 23, 2007 and must comply with the eligibility, advance notice and other
In order to comply with Internap's deadline for inclusion in the Proxy
Materials, a proposal must have been received, at the latest, on January 2,
2007. The Shareholder Proposal was received by Internap on June 11, 2007, which
was after the definitive Proxy Materials had been filed with the Commission and
mailed to stockholders and only 10 days prior to the 2007 Annual Meeting.
In no-action letters, the Commission Staff has strictly construed the deadline
for receipt of shareholder proposals under Rule 14a-8, permitting companies to
omit from proxy materials those proposals received after the deadline. See,
e.g., Datastream Systems, Inc. (March 9, 2005); American Express Company
(December 21, 2004); International Business Machines Corporation (December 19,
2004); Thomas Industries Inc. (December 18, 2002).
Rule 14a-8(f) requires that a company notify the proposing shareholder of any
deficiencies in the proposal within 14 days of receipt. However, this
requirement does not apply to a deficiency that cannot be remedied, such as when
the proponent fails "to submit a proposal by the company's properly determined
deadline." Nevertheless, Internap sent a letter to the Proponent on June 15,
2007, a copy of which is attached hereto as Exhibit B, notifying the Proponent
of Internap's omission of the Shareholder Proposal from the Proxy Materials.
For the reasons outlined above, Internap believes that the Shareholder Proposal
does not meet the timeliness requirements of Rule 14a-8(e)(1), and has omitted
the Shareholder Proposal from the Proxy Materials. We request the assurance of
the Commission Staff that it would not recommend enforcement action with respect
to Internap's omission of the Proponent's Shareholder Proposal.
Should the Commission Staff require any additional information, please contact
the undersigned at (404)504-7786. Should the Commission Staff disagree with
Internap's course of action, we would appreciate the opportunity to confer with
the Commission Staff before it issues a response to this letter.
Very truly yours,
/s/
Grant W. Collingsworth
GWC:mjc
Enclosures
cc: Richard Dobb, Esq
Lori Bibb, Esq.
From: Horace Hertz[mailto:hhertz@cnsresponse.com]
Sent: Monday, June 11, 2007 1:01 PM
To: eeidenberg@internap.com
Cc: James DeBlasio; David Buckel
Subject: Value of Internap Stock
Dear Mr. Eidenberg: My name is Horace Hertz and I am the general partner of Gak
Limited, a limited partnership that owns 20,000 shares of Internap Network
Services Corporation. As an owner of the stock, I would like to introduce a
resolution at the upcoming Annual Shareholders Meeting to discuss unlocking
shareholders value in light of the deep discount that INAP stock is trading
vis-a-vis its peers. I would like the resolution to include, among other things,
a discussion correlating management compensation to a meaningful stock index as
well as operational accomplishments.
Thanks and look forward to discuss this issue at the Annual Shareholder Meeting.
Yours truly,
Horace Hertz
[INQUIRY LETTER]
June 15, 2007
VIA E-MAIL: hhurtz@cnsresponse.com
Mr. Horace Hertz
Gak Limited
Re. Internap Network Services Corporation
Dear Mr. Hertz:
I am the Secretary of Internap Network Services Corporation. Your e-mail, dated
June 11, 2007, to Mr. Eidenberg has been forwarded to me. We certainly
appreciate your interest in, and support of Internap.
As you may know, action on stockholder proposals for a stockholders meeting is
governed by our bylaws as well as the rules and regulations of the Securities
and Exchange Commission. Under the SEC's rules, any stockholder proposal for the
2007 annual meeting would had to have been received by Internap no later than
January 2, 2007 in order to be included in the proxy statement. Under our
bylaws, any business to be brought before the 2007 annual meeting, but not
included in the proxy statement, had to be received by Internap no earlier than
February 21, 2007 and no later than March 23, 2007. These deadlines were
described in Internap's 2006 proxy statement. Unfortunately, your proposal was
received well past these deadlines. As such, we are unable to include your
proposal for action at the 2007 annual meeting.
You are certainly free to withdraw your request for the 2007 annual meeting,
which you could subsequently submit for action at Internap's 2008 annual meeting
of stockholders. The deadline for proposals to be included in the proxy
statement for the 2008 annual meeting is December 27, 2007. Any proposals for
business to be conducted at the 2008 annual meeting, but not included in the
proxy statement, must be received by Internap no earlier than February 22, 2008
and no later than March 23, 2008.
Again, I thank you for your interest in Internap.
Sincerely,
/s/
Richard Dobb
[STAFF REPLY LETTER]
July 9, 2007
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Internap Network Services Corporation Incoming letter dated June 18, 2007
The submission relates to unlocking shareholder value.
We note that it is unclear whether the submission is a proposal made under rule
14a-8 or a proposal to be presented directly at the annual meeting, a matter we
do not address. To the extent that the submission involves a rule 14a-8 issue,
there appears to be some basis for your view that Internap may exclude the
proposal under rule 14a-8(c)(2) because Internap received it after the deadline
for submitting proposals. We note in particular your representation that
Internap did not receive the proposal until after this deadline. Accordingly, we
will not recommend enforcement action to the Commission if Internap omits the
proposal from its proxy materials in reliance on rule 14a-8(e)(2).
Sincerely,
/s/
Ted Yu
Special Counsel
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