SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(As filed via EDGAR on May 08, 1997)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-14060
INTRENET, INC.
(Exact name of registrant as specified in its charter)
Indiana 35-1597565
(State or other jurisdiction of (IRS Employer Identification No)
incorporation or organization)
400 TechneCenter Drive, Suite 200, Milford, Ohio 45150
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (513)576-6666
Not Applicable
Former name, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Common Stock, without par value, 13,447,138 shares issued and
outstanding at May 1, 1997
INTRENET, INC.
FORM 10-Q
MARCH 31, 1997
INDEX
PAGE
Part I - Financial Information:
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets
March 31, 1997 and December 31, 1996 .................... 3
Condensed Consolidated Statements of Operations
Three Months Ended March 31, 1997 and1996.................... 4
Condensed Consolidated Statement of Shareholders' Equity
Three Months Ended March 31, 1997 ................... 5
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 1997 and 1996.................... 6
Notes to Condensed Consolidated Financial Statements ...... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations .................... 8
Part II - Other Information:
Item 1. Legal Proceedings ................... 11
Item 2. Changes in Securities ................... 11
Item 3. Defaults Upon Senior Securities ................... 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information ................... 11
Item 6. Exhibits and Reports on Form 8-K ................... 11
<TABLE>
INTRENET, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
March 31, 1997 and December 31, 1996
(In Thousands of Dollars)
<CAPTION>
Assets 1997 1996
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,322 $ 410
Receivables, principally freight revenue less
allowance for doubtful accounts of $921 in 1997
and $770 in 1996 27,817 25,334
Prepaid expenses and other 5,746 4,604
Total current assets 34,885 30,348
Property and equipment, at cost, less accumulated
depreciation 34,737 35,882
Reorganization value in excess of amounts allocated
to identifiable assets, net of accumulated amortization 7,506 7,611
Deferred income taxes, net 2,723 2,723
Other assets 589 604
Total assets $ 80,440 $77,168
Liabilities and Shareholders' Equity
Current liabilities:
Current debt and capital lease obligations $ 5,886 $ 6,510
Accounts payable and cash overdrafts 8,298 8,190
Current accrued claim liabilities 8,494 8,400
Other accrued expenses 8,116 7,116
Total current liabilities 30,794 30,216
Long-term debt and capital lease obligations 27,104 24,210
Long-term accrued claim liabilities 2,850 2,850
Total liabilities 60,748 57,276
Shareholders' equity:
Common stock, without par value; 20,000,000
shares authorized; 13,447,138 and 13,412,138 shares
issued and outstanding, respectively 16,646 16,594
Retained earnings since January 1, 1991 3,046 3,298
Total shareholders' equity 19,692 19,892
Total liabilities and shareholders' equity $ 80,440 $77,168
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<TABLE>
INTRENET, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
Three Months Ended March 31, 1997 and 1996
(Unaudited)
(In Thousands of Dollars, Except Per Share Data)
<CAPTION>
1997 1996
<S> <C> <C>
Operating revenues $ 57,663 $52,700
Operating expenses:
Purchased transportation
and equipment rents 23,835 20,415
Salaries, wages, and benefits 14,480 14,433
Fuel and other operating expenses 12,274 11,954
Operating taxes and licenses 2,618 2,607
Insurance and claims 1,981 1,911
Depreciation 1,178 1,079
Other operating expenses 702 1,091
57,068 53,490
Operating income (loss) 595 (790)
Interest expense (742) (575)
Other expense, net (105) (109)
Earnings (loss) before income taxes (252) (1,474)
Provision for income taxes 0 0
Net earnings (loss) $ (252) $(1,474)
Earnings (loss) per common and common
equivalent share $ (0.02) $ (0.11)
The accompanying notes are an integral part of these consolidated financial
</TABLE>
<TABLE>
INTRENET, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Shareholders' Equity
For the Three Months Ended March 31, 1997
(In Thousands of Dollars)
<CAPTION>
Retained Shareholder's
Common Stock Earnings Equity
Shares Dollars
<S> <C> <C> <C> <C>
Balance, December 31, 1996 13,412,138 $16,594 $3,298 $19,892
Exercise of stock options 35,000 52 - 52
Net loss for 1997 - - (252) (252)
Balance, March 31, 1997 13,447,138 $16,646 $3,046 $19,692
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<TABLE>
INTRENET, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 1997 and 1996
(Unaudited)
(In Thousands of Dollars)
<CAPTION>
1997 1996
Cash flows from operating activities:
<S> <C> <C>
Net earnings (loss) $ (252) $(1,474)
Adjustments to reconcile net earnings (loss)
to net cash provided by operating activities:
Deferred income taxes 0 0
Depreciation and amortization 1,283 1,184
Provision for doubtful accounts 127 83
Changes in assets and liabilities, net:
Receivables (2,610) (2,487)
Prepaid expenses (1,142) (2,119)
Accounts payable and accrued expenses 1,218 1,233
Other (2) 0
Net cash (used in)
operating activities (1,378) (3,580)
Cash flows from financing activities:
Net borrowings (repayments) on line of
credit, net 4,449 4,753
Principal payments on long-term debt (2,192) (1,849)
Proceeds from exercise of stock options 52 49
Net cash provided by financing activities 2,309 2,953
Cash flows from investing activities:
Additions to property and equipment (522) (407)
Disposals of property and equipment 503 1,173
Net cash provided by (used in)
investing activities (19) 766
Net increase in cash
and cash equivalents 912 139
Cash and cash equivalents:
Beginning of period 410 171
End of period $ 1,322 $ 310
The accompanying notes are an integral part of these consolidated financial
</TABLE>
INTRENET, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 1997
(Unaudited)
(1) Unaudited Condensed Consolidated Financial Statements
The accompanying unaudited consolidated financial statements
include the accounts of Intrenet, Inc. and all of its
subsidiaries (collectively, the Company). Truckload carrier
subsidiaries at March 31, 1997 were Roadrunner Trucking, Inc.
(RRT), Eck Miller Transportation Corporation (EMT), Advanced
Distribution System, Inc. (ADS), and Roadrunner Distribution
Services, Inc. (RDS). Also included is the Company's intermodal
broker and logistics manager, INET Logistics, Inc. (INL). All
significant intercompany transactions are eliminated in
consolidation. Through its subsidiaries, the Company provides
general and specialized regional truckload carrier brokerage and
logistics management services throughout North America.
The consolidated financial statements included herein have been
prepared pursuant to the rules and regulations of the Securities
and Exchange Commission (SEC). In management's opinion, these
financial statements include all adjustments (consisting only of
normal recurring adjustments) necessary for a fair presentation
of the results of operations for the interim periods presented.
Pursuant to SEC rules and regulations, certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted from these statements
unless significant changes have taken place since the end of the
most recent fiscal year. For this reason, the accompanying
consolidated financial statements and notes thereto should be
read in conjunction with the financial statements and notes for
the year ended December 31, 1996 included in the Company's 1996
Annual Report on Form 10-K.
The results for the three month period ended March 31, 1997 are
not necessarily indicative of the results to be expected for the
entire year.
(2) Earnings Per Common and Common Equivalent Share
Earnings per common and common equivalent share have been
computed on the basis of the weighted average common shares
outstanding during the periods. No effect has been included for
options or warrants outstanding, if the effect would be
antidilutive. The Financial Accountings Standard Board recently
released a new accounting rule on the calculation of earnings
per share that is effective at year-end 1997. This rule, which
does not permit early adoption, is not expected to have a
material effect on the Company's reported earnings per share.
(3) Income Taxes
Income taxes in interim periods are generally provided on the
basis of the estimated effective tax rate for the year. In 1997,
however, as a result of the first quarter pre-tax losses, and
the uncertainty related to forecasting future operating results
in the current competitive operating environment, the Company
has not recorded any income tax benefit in the three months
ended March 31, 1997. The tax benefit from the first quarter
losses will be recorded when earnings recover, and the tax
benefit becomes realizable.Item 2. Management's Discussion and
Analysis
of Financial Condition and Results of Operations
Results of Operations
Introduction
The Company reported a net loss of $252,000 on revenues of
$57.7 million in the three month period ended March 31, 1997.
This compares with a net loss of $1.5 million on revenues of
$52.7 million in the comparable period of 1996. The Company's
revenue grew by 9.4 percent compared to the first quarter of
1996 and each of its four largest wholly owned subsidiaries, Eck
Miller Transportation, Roadrunner Trucking, Advanced
Distribution System and Roadrunner Distribution Services
reported revenue improvements. The improvement to Intrenet's
business results continues to be an active and on-going campaign
to deliver high quality transportation services while reducing
operating expenses. This improvement occurred despite the fact
that fuel prices averaged approximately $.09 per gallon more in
the first quarter of 1997 than 1996. Fuel prices did decline
during the first quarter and are currently lower than the
Company experienced in the second quarter of 1996. Barring any
unforeseen changes in the overall economy or in the price of
fuel, management expects to benefit from continuing cost
reduction programs in the areas of safety, fuel purchasing and
insurance costs. In addition, the Company expects to benefit
from greater equipment utilization and an expanded fleet to
allow for revenue growth. Management expects continuing
momentum from the aforementioned cost reduction programs will
enable the Company to achieve profitability in 1997.
The company reported that revenue miles for the first quarter
of 1997 increased to 40.4 million miles up from 39.0 million
miles. Revenue per mile in the first quarter of 1997 also
improved by 3.1 percent to $1.33 per mile, up from $1.29
compared to first quarter 1996 results.
Intrenet's total operating fleet, including owner-operators,
grew approximately 8 percent during the first quarter of 1997 to
2,254 tractors from 2,082 tractors in 1996. The growth in the
Company's fleet is due to a 27 percent increase in the number of
owner-operators as compared with the first quarter of 1996.
A discussion of the impact of the above and other factors on
the results of operations in the three months ended March 31,
1997 as compared to the comparable period of 1996 follows.
1997 Compared to 1996
Three Months Ended March 31
Key Operating Statistics 1997 1996 % Change
Operating Revenues ($ millions) $ 57.6 $ 52.7 9.4 %
Net Earnings (Loss) ($ 000's) ($ 252) ($1,474) 82.9 %
Average Number of Tractors 2,205 2,102 4.9 %
Total Loads (000's) 68.3 61.9 10.3 %
Revenue Miles (millions) 40.4 39.0 3.6 %
Average Revenue per Revenue Mile * $ 1.33 $ 1.29
3.1 %
* Excluding brokerage revenue
Operating Revenues
Operating revenues for the three months ended March 31, 1997
totaled $57.6 million as compared to $52.7 million for the same
period in 1996, reflecting better freight availability than the
prior year. Each of the company's four motor carrier
subsidiaries reflected revenue growth in the first quarter
of 1997 by comparison to the prior year. The
Company's $4.9 million in revenue growth resulted from the
increased use of owner operators ($3.4 million) and freight
brokered to other carriers ($1.5 million). The average number
of company owned tractors declined 4.0% from 1,264 to 1,214,
while the average owner-operator tractor count increased 18.3%
from 838 to 991. Approximately 55% of the Company's revenue in
the three month period ended March 31, 1997 was generated by
Company operated equipment, and 37% by owner-operator equipment.
This compares to approximately 61% and 35% in the 1996 period.
The remaining revenues were from freight brokered to other
carriers.
The Company experienced a slight, 3.1%, improvement in the
average revenue per revenue mile in 1997 as compared to 1996.
Part of this improvement was the result of a partial recovery of
increased fuel costs by way of a fuel surcharge on the customer
freight rates.
Operating Expenses
The following table sets forth the percentage relationship of
operating expenses to operating revenues for the three months
ended March 31.
Three Months Ended March 31
1997 1996
Operating revenues 100 % 100 %
Operating expenses:
Purchased transportation
and equipment rents 41.3 38.7
Salaries, wages and benefits 25.1 27.4
Fuel and other operating expenses 21.3 22.7
Operating taxes and licenses 4.6 4.9
Insurance and claims 3.5 3.6
Depreciation 2.0 2.0
Other operating expenses 1.2 2.2
Total operating expenses 99.0% 101.5%
Purchased transportation and equipment rents increased as a
percentage of revenue due to the significant growth in the
Company's use of owner-operators. Correspondingly, salaries,
wages and benefits decreased as a percentage of revenue because
of the relatively smaller portion of the Company's total revenue
generated by Company operated equipment and the growing portion
of the Company's total revenue from freight brokered to other
carriers. Fuel and other operating expenses are attributable to
Company operated equipment and these expenses also decline in
relation to the growth in the use of owner-operators and freight
brokered to other carriers. Other operating expenses decreased
in 1997 over 1996 due to lower provisions for doubtful accounts,
reduced professional fees and reduced accounts receivable
service fees.
Interest Expense
Interest expense increased in 1997, primarily as a result of
the increased borrowings under the bank revolving line of credit
resulting from the Company's decision to discontinue its
accounts receivable factoring service.
Provision for Income Taxes
Income taxes in interim periods are generally provided on the
basis of the estimated effective tax rate for the year. In 1997,
however, as a result of the first quarter pre-tax losses, and
the uncertainty related to forecasting future operating results
in the current competitive environment, the Company has not
recorded any income tax benefit in the three months ended March
31, 1997. The tax benefit from the first quarter losses will be
recorded when earnings recover, and the tax benefit becomes
realizable.
Liquidity and Capital Resources
The Company generated $0.9 million in cash in the first three
months of 1997. As reflected in the accompanying Condensed Consolidated
Statement of Cash Flows, the Company used $1.4 million of cash
in operating activities, primarily to finance increased accounts
receivable and to purchase plates and permits for the Company's
fleet. This cash use was offset by $2.3 million of cash
generated by financing activities, primarily bank borrowings.
The Company's day-to-day financing is provided by borrowings
under a bank credit facility. The credit facility consists of a
$5 million term loan, $3.4 million of which is currently
outstanding, with a final maturity of December 31, 1999, and a
$28 million revolving line of credit which expires January 15,
1999. Quarterly principal payments of $312,500 on the term loan
are required. The line of credit includes provisions for the
issuance of stand-by letters of credit which, as issued, reduce
available borrowings under the line of credit. Borrowings under
the line of credit are limited to amounts determined by a
formula tied to the Company's eligible accounts receivable and
inventories, as defined in the credit facility (The Borrowing
Base). Borrowings under the revolving line of credit totaled
$6.7 million at March 31, 1997, and outstanding letters of
credit totaled $6.3 million at that date. The combination of
these two totaled $13.0 million, leaving $6.7 million of
borrowing capacity available at March 31, 1997. Since that date,
the Company's available borrowing capacity under the credit
facility has increased, and has averaged approximately $7.6
million in the last ten days of April.
The Company believes that cash generated from operations, and
cash available to it under the bank credit facility will be
sufficient to meet the Company's needs for the foreseeable
future.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which the
Company or any of its subsidiaries is a party or of which any of
their property is the subject, other than routine proceedings
previously reported in the Company's 1996 Annual Report on Form
10-K, and litigation incidental to its business, primarily
involving claims for personal injury and property damage
incurred in the transporting of freight. There have been no
material developments in any previously reported proceedings.
The Company maintains insurance which covers liability resulting
from transportation related claims in amounts management
believes are prudent and consistent with accepted industry
practices, subject to deductibles for the first $100,000 to
$250,000 of exposure for each incident. The Company is not
aware of any claims or threatened claims that might materially
affect the Company's operating or financial results.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Exhibit 10.1 - Employment Agreement between Intrenet, Inc. and
Roger T. Burbage dated March 10, 1997
Exhibit 10.2 - Stock Option Agreement between Intrenet, Inc.
and Roger T. Burbage dated March 10, 1997
Exhibit 11 - Computation of Per Share Earnings
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
INTRENET, INC.
(Registrant)
May 08, 1997 /s/ John P. Delavan
John P. Delavan
President and Chief
Executive Officer
/s/ Roger T. Burbage
Roger T. Burbage,
Chief Financial Officer
(Principal Financial and Accounting Officer)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made as of
March 10, 1997, by and between INTRENET, Inc., an Indiana
corporation ("Employer"), and Roger T. Burbage ("Employee").
W I T N E S S E T H
WHEREAS, Employer desires to employ Employee as its Chief
Financial Officer;
WHEREAS, Employee desires to be assured of certain
compensation and other benefits from Employer for his services over
a defined term; and
WHEREAS, Employer desires to provide such assurances to
Employee on the terms and subject to the conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of these premises, the
mutual covenants and undertakings herein contained, Employer and
Employee, each intending to be legally bound, covenant and agree as
follows:
1. Employment. Upon the terms and subject to the
conditions set forth in this Agreement, Employer agrees to employ
Employee as its Chief Financial Officer and Employee agrees to
accept such employment.
2. Duties. Employee agrees to serve as Employer's
Chief Financial Officer and to perform such duties in that office
as may reasonably be assigned to him by Employer's Board of
Directors (the "Board") or Chief Executive Officer ("CEO"). While
so employed, Employee shall devote substantially all of his
business time and efforts to Employer's business and shall not
engage in any other business activities without the prior approval
of the Board or the CEO. Employee shall hold such offices and
titles as the Board determines.
3. Term. The term of this Agreement shall commence as
of the date hereof and continue for two (2) years from the date
hereof (such term, including any extension thereof shall herein be
referred to as the "Term").
4. Base Compensation. Employee shall receive a base
salary of $150,000.00 per annum ("Base Compensation") payable at
regular intervals in accordance with Employer's normal payroll
practices now or hereafter in effect.
5. Benefit Plans. Employee shall be included as a
participant in all present and future employee benefit, retirement
and compensation plans generally available to employees of
Employer, consistent with his Base Compensation and position with
Employer, including, without limitation, any pension plan, 401(k)
Plan, Stock Option Plan, and hospitalization, major medical,
disability and group life insurance plans, upon the terms set forth
in such plans, as amended from time to time. Employer may amend or
eliminate any such plan in its discretion to the extent permitted
by law, as long as the change does not apply solely to Employee to
the exclusion of all other participants in such plan.
6. Expenses; Automobile; Vacations. So long as
Employee is employed by Employer pursuant to this Agreement,
Employee shall receive reimbursement from Employer for all
reasonable business expenses incurred in the course of his
employment by Employer, upon submission to Employer of written
vouchers and statements for reimbursement in accordance with
Employer's policies and procedures. Employee shall participate in
Employer's vacation policies for senior executives and shall be
entitled to three (3) weeks of paid vacation per year during the
Term of this Agreement.
7. Options. Concurrently with the execution of this
Agreement, the Incentive Compensation Committee of the Board which
administers the Employer's 1993 Stock Option and Incentive Plan
(the "Plan"), a copy of which has been provided to Employee, has
granted to Employee options to purchase 100,000 shares of
Employer's Common Stock at an initial exercise price equal to the
closing price per share of the Common Stock as reported by NASDAQ
for the trading date preceding the date of this Agreement,
exercisable commencing six (6) months and one day after the date of
grant through five (5) years from the date of grant.
8. Termination. Subject to the respective continuing
obligations of the parties, Employee's employment may be terminated
prior to the expiration of the Term of this Agreement as follows:
a. Employer, by action of its Board of Directors and
upon written notice to Employee, may terminate
Employee's employment at any time effective
immediately for cause. For purposes of this
subsection, "cause" shall be defined as any
(i) dishonest or fraudulent conduct in connection
with his employment, (ii) conviction of Employee by
a federal or state court for the commission of a
felony, (iii) insubordinate or intentional failure
on the part of Employee to perform the duties
assigned to him under this Agreement or any other
duties assigned by the Board; or (iv) unlawful
taking or misappropriation of any material and
substantial tangible or intangible property (other
than corporate opportunities) or misappropriation
of any corporate opportunity belonging to Employer
or any subsidiary or in which any of them has an
interest.
b. Employer, by action of its Board and upon thirty
(30) days written notice to Employee, may terminate
Employee's employment without cause.
c. Employee, by written notice to Employer, may
terminate his employment at any time on thirty (30)
days written notice to the Board.
d. Employee's employment shall terminate in the event
of Employee's death or disability. For purposes
hereof, "disability" shall be defined as Employee's
inability by reason of illness or other physical or
mental incapacity to perform the duties required by
his employment for any consecutive one hundred
twenty (120) day period, provided that notice of
any termination by Employer because of Employee's
"disability" shall have been given to Employee
prior to the full resumption by him of the
performance of such duties.
9. Compensation Upon Termination or During Disability.
In the event of termination of Employee's employment pursuant to
section 8 hereof, compensation shall continue to be paid to
Employee as follows:
a. In the event of termination pursuant to subsection
8a or 8c, compensation provided for herein
(including Base Compensation) shall continue to be
paid, and Employee shall continue to participate in
the employee benefit, retirement, and compensation
plans and other perquisites as provided in
sections 5, 6 and 7 hereof, through the date of
termination specified in the notice of termination.
Any benefits payable under insurance, health,
retirement and bonus plans as a result of
Employee's participation in such plans through such
date shall be paid when due under those plans.
b. In the event of termination pursuant to subsection
8b during the first two years of the Term of this
Agreement, compensation provided for herein
(including Base Compensation) shall continue to be
paid, the Employee shall continue to participate in
the employee benefit, retirement, and compensation
plans and other perquisites as provided in
sections 5, 6 and 7 hereof, through the date of
termination specified in the notice of termination.
Any benefits payable under insurance, health,
retirement and bonus plans as a result of
Employee's participation in such plans through such
date shall be paid when due under those plans. In
addition, Employee shall be entitled to receive
from Employer after the date of termination an
amount equal to the Base Compensation then being
paid to Employee for the remaining portion of such
two-year period. Such payments shall be in full
satisfaction of Employer's remaining obligations to
Employee under this Agreement.
c. In the event of termination pursuant to subsection
8d, compensation provided for herein (including
Base Compensation) shall continue to be paid, and
Employee shall continue to participate in the
employee benefit, retirement, and compensation
plans and other perquisites as provided in
sections 5, 6 and 7 hereof, (i) in the event of
Employee's death, through the date of death, or
(ii) in the event of Employee's disability, through
the date of proper notice of disability as required
by subsection 8d. Any benefits payable under
insurance, health, retirement and bonus plans as a
result of Employer's participation in such plans
through such date shall be paid when due under
those plans.
10. Notice of Termination. Any termination of
Employee's employment with Employer as contemplated by section 8
hereof, except in the circumstances of Employee's death, shall be
communicated by written "Notice of Termination" by the terminating
party to the other party hereto. Any "Notice of Termination"
pursuant to subsection 8a shall indicate the specific provisions of
this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for such
termination.
11. Relocation and Related Expenses. Employer shall
reimburse Employee for additional living costs incurred by Employee
until Employee has relocated his primary residence near Employer's
headquarters. Such relocation shall be completed during the first
three months of the Term. Employer shall reimburse Employee for
reasonable costs incurred by Employee in such relocation, in an
amount to be approved by the CEO. If necessary, Employer shall
also reimburse Employee for the costs of maintaining health
insurance coverage with his former employer under COBRA, until
Employee and his dependents are covered by Employer's health
insurance plans.
12. Responsibilities to Prior Employer. Employee has
furnished Employer with a copy of a letter agreement dated
December 2, 1996 (the "Letter Agreement") between Employee and his
former employer. Employee represents that he has no other written
employment-related agreements with or obligations to such former
employer. Employer and Employee each acknowledge that Employee's
performance of his responsibilities under this Agreement shall not
require Employee to breach any obligation to his former employer
under the Letter Agreement or otherwise. Employer acknowledges
that if Employee's former employer should initiate any legal
proceedings against him based on any alleged violation of the
Letter Agreement, Employer shall indemnify Employee against any
liability incurred in defense of such actions on the terms and
conditions specified in Section 7.8 of Employer's Restated Articles
of Incorporation.
13. Successors. Should Employee die after termination
of his employment with Employer while any amounts are payable to
him hereunder, this Agreement shall inure to the benefit of and be
enforceable by Employee's executors, administrators, heirs,
distributees, devisees and legatees and all amounts payable
hereunder shall be paid in accordance with the terms of this
Agreement to Employee's devisee, legatee or other designee or, if
there if no such designee, to his estate.
14. Notice. For purposes of this Agreement, notices and
all other communications provided for herein shall be in writing
and shall be deemed to have been given when delivered or mailed by
United States registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to Employee: 702 Belleville Avenue
Brewton, Alabama 36426
If to Employer: Intrenet, Inc.
400 TechneCenter Drive
Milford, Ohio 45150
Attn: President and CEO
or to such address as either party hereto may have furnished to the
other party in writing in accordance herewith, except that notices
of change of address shall be effective only upon receipt.
15. Indiana Law. The validity, interpretation, and
performance of this Agreement shall be governed by the laws of the
State of Indiana.
16. Amendment and Waiver. No provision of this
Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing signed by
Employee and Employer. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of dissimilar
provisions or conditions at the same or any prior or subsequent
time. No agreements or representation, oral or otherwise, express
or implied, with respect to the subject matter hereof have been
made by either party which are not set forth expressly in this
Agreement.
17. Severability. The invalidity or unenforceability of
any provisions of this Agreement shall not affect the validity or
enforceability of any other provisions of this Agreement which
shall remain in full force and effect.
18. Assignment. This Agreement is personal in nature
and neither party hereto shall, without consent of the other,
assign or transfer this Agreement or any rights or obligations
hereunder, except as provided in section 13.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered as of the day and year first
above set forth.
INTRENET, INC.
By: /s/ John P. Delavan
John P. Delavan,
President and CEO
"Employer"
/s/ Roger T. Burbage
Roger T. Burbage
"Employee"
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT ("Agreement"), dated as of
March 10, 1997, between Intrenet, Inc., an Indiana corporation (the
"Company"), and Roger T. Burbage (the "Participant").
W I T N E S S E T H:
WHEREAS, the Participant has been granted options (the
"Options") to purchase shares of the Company's Common Stock,
without par value (the "Common Stock"), pursuant to the Company's
1993 Stock Option and Incentive Plan (the "Plan", a copy of which
is attached hereto as Appendix A); and
WHEREAS, the parties hereto desire by this Agreement to
document the grant of the Options, but intend that, except to the
extent set forth herein, all of the terms and conditions of the
Options shall be as contained in the Plan.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein and in the Plan,
the parties hereto hereby agree as follows:
1. The Options. Subject to the terms and conditions set
forth herein and in the Plan, the Company's Incentive Compensation
Committee has granted the Participant Options to purchase 100,000
shares of the Common Stock (the "Shares") at an initial exercise
price of [$2.125] per Share (the last reported sale price of the
Common Stock on March 9, 1997) exercisable at any time six (6)
months and one day from the date hereof through the date five (5)
years from the date hereof.
2. Exercise. The Options may be exercised by the
Participant only at the times and in the manner set forth herein
and in the Plan.
3. Incentive Stock Options. It is understood that the
Options are intended to qualify as Incentive Stock Options under
Section 422 of the Internal Revenue Code of 1986, as amended.
4. Section 83(b) Election. In the event that the
Participant makes an election under Section 83(b) of the Code with
respect to the Options or the Shares issuable upon the exercise
thereof, the Participant shall notify the Company of such election
within five business days thereafter.
5. Representations and Warranties of Participant. The
Participant represents and warrants to the Holding Company that:
(a) he has received and carefully reviewed a copy of the
Plan; and
(b) he understands that neither the Options nor any of
the rights and interests under the Plan or hereunder may be
assigned, encumbered or otherwise transferred (collectively,
"Transferred") except, in the event of his death, by will or
the laws and descent and distribution.
6. Plan Controlling. The parties agree that, except to
the extent set forth herein, all of the terms and conditions of the
Options are contained in the Plan and there are no other
agreements, written or oral, with respect thereto. Neither this
Agreement nor the existence of the Options shall be construed as
giving Participant any right to be retained in the employ of the
Company or any of its affiliates.
7. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Indiana.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered as of the date first
hereinabove written.
INTRENET, INC.
By /s/ John P. Delavan
John P. Delavan,
President and CEO
/s/ Roger T. Burbage
Roger T. Burbage, Participant
INTRENET, INC.
STATEMENT RE: COMPUTATION
OF PER SHARE EARNINGS
Three Months Ended March 31,
1997 1996
Weighted average shares outstanding during period 13,437,804 13,215,624
Assumed exercise of options and warrants 139,624 204,545
Shares assumed for fully diluted earnings per share 13,577,428 13,420,169
Earnings for the period:
($ in Thousands)
Net earnings $ (252) $ (1,474)
Earnings per common and common
equivalent share:
Primary: $ (0.02) $ (0.11)
Fully diluted: $ N/A $ N/A
Exhibit 11
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<NAME> INTRENET, INC.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
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0
0
<COMMON> 16,646
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<INTEREST-EXPENSE> 742
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