<PAGE> 1
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SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY
(AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-12.
</TABLE>
Intrenet, Inc.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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<PAGE> 2
INTRENET, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 12, 2000
The annual meeting of shareholders of Intrenet, Inc. (the "Company")
will be held at 270 Park Avenue, Conference Room E, Eleventh Floor, New York,
New York, on Monday, June 12, 2000, at 10:00 a.m., New York City time, for the
following purposes:
(1) To elect eight directors to serve until the next annual
meeting of shareholders and until their successors are elected and have
qualified;
(2) To approve or disapprove the Company's 2000 Stock Option
and Incentive Plan; and
(3) To transact such other business as may properly come
before the meeting.
All shareholders of record at the close of business on April 24, 2000,
are eligible to vote.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS MEETING.
WHETHER OR NOT YOU EXPECT TO BE PRESENT, PLEASE FILL IN, DATE, SIGN AND RETURN
THE ENCLOSED PROXY FORM IN THE ACCOMPANYING ADDRESSED, POSTAGE-PREPAID ENVELOPE.
IF YOU ATTEND THE MEETING, YOUR PROXY WILL BE CANCELED.
Thomas J. Bell, Secretary
May 1, 2000
(ANNUAL REPORT CONCURRENTLY MAILED)
<PAGE> 3
INTRENET, INC.
400 TECHNECENTER DRIVE
MILFORD, OHIO 45150
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
JUNE 12, 2000
This statement is being furnished on or about April 28, 2000, in
connection with the solicitation by the Board of Directors of Intrenet, Inc.
(the "Company") of proxies to be voted at the annual meeting of shareholders to
be held at 10:00 a.m., New York City time, on Monday, June 12, 2000, at 270 Park
Avenue, Conference Room E, Eleventh Floor, New York, New York, for the purposes
set forth in the accompanying Notice. This statement and form of proxy are being
mailed on May 1, 2000.
At the close of business on April 24, 2000, the record date for the
meeting, there were 15,037,066 shares of common stock, without par value, of the
Company outstanding and entitled to vote at the meeting. On all matters, each
shareholder will have one (1) vote for each share held.
If the enclosed form of proxy is executed and returned, it may
nevertheless be revoked at any time before it is voted. If a shareholder
executes more than one proxy, the proxy having the latest date will revoke any
earlier proxies. Attendance in person at the meeting by a shareholder will
constitute revocation of a proxy, and the shareholder may vote in person.
Unless revoked, a proxy will be voted at the meeting in accordance with
the instructions of the shareholder in the proxy, or, if no instructions are
given, "with authority" for the election as directors of all nominees listed
under Proposal 1 and "for" the proposal shown as Proposal 2. Directors will be
elected by a plurality of the votes cast by the shares entitled to vote in the
election at the meeting. Approval of Proposal 2 requires that the number of
votes in favor of the proposal be greater than the number opposing it.
A proxy may indicate that all or a portion of the shares represented by
such proxy are not being voted with respect to a specific proposal. This could
occur, for example, when a broker is not permitted to vote shares held in street
name on certain proposals in the absence of instructions from the beneficial
owner. Shares that are not voted with respect to a specific proposal will be
considered as not present and entitled to vote on such proposal, even though
such shares will be considered present for purposes of determining a quorum and
voting on other proposals. Abstentions on a specific proposal will be considered
as present, but not as voting in favor of such proposal. Neither the non-voting
of shares nor abstentions on a specific proposal will affect any of the matters
to be voted on at this meeting.
The Board of Directors knows of no matters, other than those reported
below, which are to be brought before the meeting. However, if other matters
properly come before the meeting, it is the intention of the persons named in
the enclosed form of proxy to vote such proxy in accordance with their judgment
on such matters.
The cost of this solicitation of proxies will be borne by the Company.
<PAGE> 4
PROPOSAL 1: ELECTION OF DIRECTORS
NOMINEES
The Company's By-laws and the shareholders agreement described below
provide for a nine- person Board of Directors. At the annual meeting, eight
directors are to be elected. Accordingly, there will be one vacancy on the Board
of Directors. Each director will hold office for a term of one year and until
his successor is elected and has qualified. It is the intention of the persons
named in the accompanying form of proxy to vote such proxy for the election to
the Board of Directors of the persons identified below, each of whom is now a
director, except for Mr. Chandler. The Board of Directors has no reason to
believe that any of the nominees will be unable to serve if elected. If, for any
reason, one or more of such persons is unable to serve, it is the intention of
the persons named in the accompanying form of proxy to nominate such other
person(s) as director as they may in their discretion determine, in which event
the shares will be voted for such other person(s).
The names, ages and principal occupations of the nominees and other
directorships held by them are set forth below. Unless otherwise indicated in
the following table, the principal occupation of each nominee has been the same
for the last five years.
<TABLE>
<CAPTION>
Director
Name Age Since Principal Occupation
---- --- -------- --------------------
<S> <C> <C> <C>
Vincent A. Carrino 44 1999 President and sole shareholder of Brookhaven Capital
Management Co., Ltd. (an investment fund) and the
Manager and Principal Member of Brookhaven Capital
Management, LLC (an investment fund) since 1986.
Mr. Carrino is also a director of Rent-Way, Inc. and
Cash Technologies, Inc.
John P. Chandler 56 -- Executive Vice President and Chief Operating Officer of
the Company since September 1999. Mr. Chandler will
become President and Chief Executive Officer of the
Company effective June 12, 2000. From April 1998
through June 1999, Mr. Chandler served as President
and Chief Executive Officer of Tow America, Inc. (a
consolidator of companies in the towing and
repossession business). From March 1995 through
August 1997, he served as Vice President and Treasurer
of Caliber System, Inc. formerly Roadway Services, Inc.,
(a transportation and logistics holding company).
</TABLE>
-2-
<PAGE> 5
<TABLE>
<CAPTION>
Director
Name Age Since Principal Occupation
---- --- -------- --------------------
<S> <C> <C> <C>
Robert B. Fagenson 51 1999 Chairman of Fagenson & Company, Inc. (a registered
broker-dealer) and an executive officer of Starr
Securities, Inc. (a registered broker-dealer) since 1973.
Mr. Fagenson is also Vice Chairman and a director of
The New York Stock Exchange, Inc., and a director of
Rent-Way, Inc., United Diagnostics, Inc., and Cash
Technologies, Inc.
Ned N. Fleming, III 39 1997 President and Director of Spinnaker Industries, Inc. (a
diversified manufacturing company) since June 1994,
and a principal of Boyle Fleming & Company, Inc. (an
investment banking firm) since May 1993. From 1988
to 1993, Mr. Fleming was an associate with Cardinal
Investment Company, Inc. (an investment concern).
Eric C. Jackson 55 1993 President and Chief Executive Officer of the Company
since July 1999. Mr. Jackson will become Chairman of
the Board of Directors of the Company effective
June 12, 2000. Prior to that, Mr. Jackson served as
Chief Executive Officer of Great Basin Companies (a
group of truck dealerships) for more than five years.
Edwin H. Morgens 58 1991 Chairman of Morgens, Waterfall, Vintiadis & Company,
Inc. (a financial services firm). Mr. Morgens is a
director of TransMontaigne, Inc. and Programmer's
Paradise, Inc. Mr. Morgens also serves as Chairman of
the Board of the Company.
Thomas J. Noonan, Jr. 60 1990 Executive Vice President and Director of WSR, Inc. (an
automotive specialty retailer). From July 1994 to
August 1998, Mr. Noonan was Executive Vice President
and Chief Financial Officer of Herman's Sporting Goods
(a retailer), which filed for bankruptcy under Chapter 11
on April 26, 1996. From February 1993 to June 1994,
he was a Managing Director and Chief Executive Officer
of TFGII (a management consulting firm). From March
1990 to January 1993, Mr. Noonan was Executive Vice
President of the Company. Mr. Noonan is also a director
of Elder Beerman Stores Corp.
</TABLE>
-3-
<PAGE> 6
<TABLE>
<CAPTION>
Director
Name Age Since Principal Occupation
---- --- -------- --------------------
<S> <C> <C> <C>
Gerald Anthony Ryan 64 1999 Chairman Emeritus of Rent-Way, Inc. (a rental purchase
industry company) since October 1999. Mr. Ryan
served as Chairman of Rent-Way, Inc. from 1981 to
October 1999. Mr. Ryan has also been the Chairman of
Spectrum Control, Inc. (an electronic filters company)
since 1968, the Chairman of Automated Industrial
Systems, Inc. (a laser and ink marking company) since
1980, the Chairman and President of Erie Business
Management Corp. (a Hawaiian tourist publication
company) since 1975, and the Chairman and President
of Waterfront Restaurant, Inc. since 1993.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ABOVE NOMINEES.
ARRANGEMENTS AND UNDERSTANDINGS WITH RESPECT TO THE ELECTION OF DIRECTORS
The Company and certain of its shareholders entered into an agreement
dated as of March 18, 1999 (the "Shareholders Agreement"), with Brookhaven
Capital Management Co., Ltd., Brookhaven Capital Management, LLC, Vincent Andrew
Carrino, Watershed Partners, L.P., Piton Partners, L.P., Watershed (Cayman)
Ltd., Robert B. Fagenson, and Gerald Anthony Ryan (the "Brookhaven Group"). The
Shareholders Agreement provides that the Brookhaven Group has the right to
designate three persons for election to the Board of Directors of the
Corporation, and that the other shareholders who are parties to the Shareholders
Agreement have the right to designate the remaining members of the Board of
Directors. The Brookhaven Group has designated Messrs. Carrino, Fagenson, and
Ryan as its designees. The other shareholders have designated the other nominees
as their designees.
MEETINGS AND COMMITTEES
During 1999, the Board of Directors of the Company held 11 meetings.
During the period in 1999 for which he served as a director, no director
attended fewer than 75% of the aggregate of the total number of meetings held in
1999 by the Board of Directors and its committees on which such director served.
The Board of Directors had an Audit Committee, a Compensation
Committee, an Incentive Compensation Committee, and a Nominating Committee
during 1999.
The Audit Committee, which currently consists of Messrs. Noonan,
Fleming and Ryan, recommends the appointment of the Company's auditors and meets
with the auditors to discuss accounting matters and internal controls. The Audit
Committee met once during 1999.
-4-
<PAGE> 7
The Compensation Committee, which currently consists of Messrs.
Morgens, Ryan and Philip Scaturro, sets and reviews the compensation of
executive officers. The Compensation Committee did not meet during 1999.
The Incentive Compensation Committee, which currently consists of
Messrs. Morgens, Ryan and Scaturro, administers the Company's 1993 Stock Option
and Incentive Plan. The Incentive Compensation Committee met once during 1999.
The Nominating Committee, which currently consists of Messrs. Morgens
and Scaturro, recommends to the full Board persons for nomination as directors.
In considering persons to nominate, the Nominating Committee will consider
persons nominated by shareholders. Shareholders who wish to nominate persons for
election as directors must comply with the advance notice provisions of the
Company's By-Laws. A copy of such provisions is available upon request to the
Secretary. The Nominating Committee did not meet during 1999.
DIRECTOR COMPENSATION
Each non-officer director is currently paid a fee of $500 per quarter
and a participation fee of $750 for each in-person meeting of the Board, $500
for each telephonic meeting and $500 for each committee meeting (in-person or
telephonic).
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of
Common Stock, to file reports of ownership with the Securities and Exchange
Commission. Officers, directors and greater-than-ten- percent shareholders are
required to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on its review of copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during 1999, all filing
requirements applicable to its officers, directors, and greater-
than-ten-percent shareholders were complied with, except that Mr. Jackson filed
the following late reports. He filed a Form 4 in April 1999 reporting a
transaction for the month of January 1999. He also filed a Form 4 in April 2000
reporting transactions for the months of December 1999, January 2000 and
February 2000.
-5-
<PAGE> 8
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and non-cash compensation for
each of the last three years awarded to or earned by the two persons who served
as Chief Executive Officer during 1999 and the only other executive officer of
the Company who had a salary and bonus in excess of $100,000 during 1999.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- Awards
------------
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary Bonus Compensation Options Compensation
------------------ ---- ------ ----- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Eric C. Jackson (1) 1999 $ 80,000 $ 0 $ 0 100,000 $ 0
President and Chief
Executive Officer
John P. Delavan (2) 1999 $110,000 $ 0 $ 0 0 $106,000 (3)
President and Chief 1998 195,192 0 0 0 1,000
Executive Officer 1997 175,000 0 0 0 1,000
Roger T. Burbage (4) 1999 $100,000 $27,200 $ 0 0 $ 81,100 (5)
Executive Vice President and 1998 150,000 0 0 0 100
Chief Financial Officer 1997 120,309 0 0 100,000 100
</TABLE>
- ---------------
(1) Mr. Jackson was elected President and Chief Executive Officer effective
June 18, 1999.
(2) Mr. Delavan resigned his positions with the Company effective June 18,
1999.
(3) Includes severance payments to Mr. Delavan of $105,000 and premiums
paid for life and disability insurance coverage of $1,000.
(4) Mr. Burbage resigned his positions with the Company effective August
13, 1999.
(5) Includes severance payments to Mr. Burbage of $78,200, attorney's fees
paid on behalf of Mr. Burbage of $2,800, and premiums paid for life and
disability insurance coverage of $100.
-6-
<PAGE> 9
OPTION GRANTS DURING 1999
The following table sets forth information related to options granted
during 1999 and options held at year-end by the only person named in the Summary
Compensation Table who received a grant. We do not have any outstanding SARs.
<TABLE>
<CAPTION>
Potential Realizable Value at
Number of % of Total Assumed Annual Rates of
Securities Options Stock Price Appreciation
Underlying Granted to Exercise for Option Term (1)
Options Employees Price Expiration -----------------------------
Granted (2) in 1999 ($/SH) Date 5% ($) 10% ($)
----------- ---------- -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Eric C. Jackson 100,000 50% $2.8125 8/3/04 $77,704 $171,706
</TABLE>
- ---------------
(1) The potential realizable value illustrates value that might be realized
upon the exercise of the options immediately prior to the expiration of
their terms, assuming the specified compounded rates of appreciation of
the Company's common stock from the date of grant through the term of
the options.
OPTION EXERCISES AND COMPANY'S YEAR-END VALUES
Shown below is information with respect to the unexercised options to
purchase the Company's common stock granted in 1999 and prior years to the
persons named in the Summary Compensation Table and held by them at December 31,
1999.
<TABLE>
<CAPTION>
Number of
Shares Securities Underlying Value of Unexercised
Acquired on Value Unexercised Options In-the-Money Options at
Name Exercise Realized at December 31, 1999 December 31, 1999 (1)
---- -------- -------- -------------------- -----------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Eric C. Jackson -- -- 100,000 -- -- --
John P. Delavan 5,000 $ 3,125 111,667 -- $31,406 --
Roger T. Burbage 20,000 $12,500 80,000 -- $22,500 --
</TABLE>
- ---------------
(1) The closing price of the Company's common stock as reported by Nasdaq
for December 31, 1999, was $2.40625. Value is calculated as the
difference between the exercise price and $2.40625, multiplied by the
number of shares underlying "in-the-money" options.
-7-
<PAGE> 10
SEVERANCE AGREEMENTS
The Company entered into severance agreements with two of its former
executive officers during 1999. The Company agreed to pay Mr. Delavan a total of
$220,000 and Mr. Burbage a total of $185,000 and also agreed to extend the
exercise period of their vested options for a period of one year from the date
of termination of their employment.
OPTION PLANS
On April 6, 1993, the Board of Directors adopted the Company's 1993
Stock Option and Incentive Plan (the "1993 Plan"). The 1993 Plan was approved by
shareholders on May 19, 1993. The 1993 Plan authorizes the Incentive
Compensation Committee of the Board of Directors to make awards of non-qualified
and incentive stock options and restricted stock to officers or key employees of
the Company and its subsidiaries. The total number of shares of common stock
available for awards is 833, subject to antidilution adjustments. At December
31, 1999, 726,667 unexercised options were outstanding under the 1993 Plan. The
Board of Directors is recommending that shareholders approve a new plan to
replace the 1993 Plan. See "Proposal 3: Approval of the 2000 Stock Option and
Incentive Plan."
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation programs for the Company's executive officers are designed
to attract, retain and motivate employees who will contribute to achievement of
corporate goals and objectives. Elements of executive compensation include
salaries, bonuses, and awards of stock and options to purchase stock, with the
latter two being discretionary. The Company takes into account factors relevant
to the specific compensation component being considered, including compensation
paid by other business organizations of comparable size and complexity, the
generation of income and cash flow by the business, the attainment of annual
individual and business objectives and an assessment of business performance
against peer groups of companies in the Company's business.
The Compensation Committee did not make any compensation determinations
for the Company's executive officers during 1999; rather all such determinations
were made by the entire Board of Directors or, in the case of stock option
grants, by the Incentive Compensation Committee.
John P. Delavan served as the Company's chief executive officer until
his resignation effective June 16, 1999. Mr. Delavan's 1999 compensation was set
by his employment agreement, amended most recently in 1998. The terms of Mr.
Delavan's compensation arrangements were not altered during 1999, except in
connection with his severance from the Company. The Board of Directors approved
the terms of the severance agreement with Mr. Delavan which is described
elsewhere in this report.
Mr. Jackson was appointed chief executive officer effective June 16,
1999. On August 3, 1999, the Board of Directors approved paying Mr. Jackson
$10,000 per month for his services. In addition, the Incentive Compensation
Committee granted Mr. Jackson options to purchase 100,000 shares of the
Company's common stock exercisable upon grant through August 3, 2004, at an
exercise price of $2.8125 per share.
-8-
<PAGE> 11
The Board of Directors also approved the terms of the severance
agreement with Roger T. Burbage which is described elsewhere in this report.
The only other executive officer as to whom a compensation decision was
made during 1999 involved the employment of John P. Chandler as the Company's
chief operating officer. The Board of Directors of the Company approved an
employment agreement with Mr. Chandler which became effective September 9, 1999.
The employment agreement has an initial term through September 9, 2000 and is
automatically renewed on an annual basis unless six months notice of non-renewal
is provided to Mr. Chandler. The Company agreed to pay Mr. Chandler an annual
base salary of not less than $200,000 and a bonus, based on a percentage of net
income before taxes, up to a maximum of $500,000. The Company also agreed to
make future grants of options to purchase not less than 50,000 or more than
100,000 shares if the Company's operating ratio for 2000 is 96.5 or less. The
agreement is terminable by the Company with cause or, on 30 days notice, without
cause. In addition, the Incentive Compensation Committee granted Mr. Chandler
options to purchase 100,000 shares of the Company's common stock, exercisable
six months after grant through September 9, 2004, at an exercise price of
$2.84375 per share.
The Compensation Committee
Edwin H. Morgens
Gerald Anthony Ryan
Philip Scaturro
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999, the Compensation Committee included Messrs. Morgens, Ryan
and Scaturro. No member of the Compensation Committee is involved in a
relationship requiring disclosure as an interlocking executive officer/director
or under Item 404 of Regulation S-K or as a former officer or employee of the
Company.
-9-
<PAGE> 12
COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total shareholder return on the
common stock for the last five years with a cumulative total return on the
Nasdaq Stock Market (US) Index (the "Nasdaq Index") and the Nasdaq Trucking and
Transportation Stock Index (the "Trucking Index") over the same period assuming
the investment of $100 in the common stock, the Nasdaq Index and the Trucking
Index on the first trading day of January 1995. The shareholder return shown on
the graph is not necessarily indicative of future performance.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
01/01/95 12/29/95 12/31/96 12/31/97 12/31/98 12/31/99
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTRENET 100.00 38.89 52.78 63.89 75.00 53.47
- ---------------------------------------------------------------------------------------------------------------------
NASDAQ INDEX 100.00 141.32 173.87 213.05 300.22 542.37
- ---------------------------------------------------------------------------------------------------------------------
TRUCKING INDEX 100.00 116.68 128.79 164.85 148.30 158.39
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
[LINE GRAPH]
-10-
<PAGE> 13
PROPOSAL 2: APPROVAL OF COMPANY'S
2000 STOCK OPTION AND INCENTIVE PLAN
On February 4, 2000, the Board of Directors of the Company approved the
Company's 2000 Stock Option and Incentive Plan (the "Plan") and directed that
the Plan be submitted to the shareholders of the Company for consideration and
approval at the 2000 annual meeting.
The following is a summary of the principal features of the Plan. The
summary is qualified in its entirety by reference to the complete text of the
Plan, a copy of which is appended to this Proxy Statement as Annex A.
If approved, the Plan will replace the 1993 Stock Option and Incentive
Plan. As of April 24, 2000, there were only 833 shares of common stock available
for issuance under the 1993 Plan. If the Plan is approved, no further awards
will be made under the 1993 Plan.
PURPOSE
The purpose of the Plan is to promote the long-term interests of the
Company and its shareholders by providing a means for attracting and retaining
employees and directors of the Company and its Affiliates. The Company believes
that employees and directors who own shares of common stock will have a closer
identification with the Company and greater motivation to work for the Company's
success by reason of their ability as shareholders to participate in the
Company's growth and earnings.
ELIGIBLE PERSONS
Recipients of awards under the Plan must be, or have been at the time
of grant, employees or directors of the Company. There are presently
approximately 1,850 persons who would be eligible for awards under the Plan.
SHARES SUBJECT TO THE PLAN
The number of shares of common stock subject to the Plan is 1,000,000.
The number of shares of common stock subject to the Plan is subject to
adjustment in certain events. The number of shares of common stock which may be
granted in any calendar year to any one participant may not exceed 150,000
shares.
The number of shares covered by an award under the Plan reduces the
number of shares available for future awards; however, any awards that terminate
or are surrendered or forfeited without exercise or issuance will become
available for further awards under the Plan.
The closing sale price of common stock on April 17, 2000, as quoted on
the Nasdaq SmallCap Market, was $1.3125 per share.
-11-
<PAGE> 14
ADMINISTRATION OF THE PLAN
The Plan will be administered by the Compensation Committee of the
Board of Directors (the "Committee"). Subject to the terms of the Plan, the
Committee has sole authority to determine and designate persons who are to be
granted awards under the Plan and the nature and terms of the awards to be
granted, including the number of shares to be subject to such awards.
GRANT OF STOCK OPTIONS
With respect to the grant of stock options under the Plan that are
intended to qualify as "incentive stock options" under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), the option price must be
at least 100% (or 110% in the case of any holder of more than 10% of the voting
power of the Company or any Affiliate) of the fair market value of the common
stock on the date of the grant of the stock option. The aggregate fair market
value (determined on the date of grant) of the shares of stock subject to
"incentive stock options" that become exercisable for the first time by a
grantee in any calendar year may not exceed $100,000. The exercise price of
nonqualified stock options must be at least 85% of the fair market value of the
common stock on the date of grant.
The number and class of shares subject to an option may be adjusted by
the Committee in the event of stock splits, stock dividends, recapitalizations
and certain other events involving changes in the Company's capital.
EXERCISE OF STOCK OPTIONS
No incentive stock options granted under the Plan may be exercised more
than ten years, or five years in the case of any holder of more than 10% of the
voting power of the Company or any Affiliate, (or such shorter period as the
Committee may determine) from the date it is granted. Further, no incentive
stock option granted under the Plan may be exercised more than three months
after the participant's termination of service for any reason other than
disability or death, unless the participant dies during such three-month period
and the Committee or the terms of the award agreement permit later exercise.
Nonqualified stock options may be exercised during such period as the Committee
determines at the time of grant.
Stock options granted under the Plan become exercisable in one or more
installments in the manner and at the time or times specified by the Committee
at the time of grant.
PERFORMANCE SHARES
The Committee may grant awards of performance shares, in which case the
grantee could be granted shares of the Company's common stock, subject to
satisfaction of specified performance goals established by the Committee.
Performance goals may be established on one or more of the following business
criteria: earnings per share; return on equity; return on assets; operating
income; or market value per share. The applicable performance goals and all
other terms and conditions of the award are determined at the discretion of the
Committee.
-12-
<PAGE> 15
After an award of performance shares has vested (that is, after the
applicable performance goal or goals have been achieved), the grantee will be
entitled to a payment of shares of the Company's common stock, cash or a
combination thereof. However, no grantee shall receive any such payment unless
the Committee has certified, in writing, that the performance goals established
by the Committee were in fact satisfied. If a grantee terminates employment
prior to the end of the period of time over which the performance shares are
being earned for any reason other than death, disability or retirement, all of
such grantee's rights with respect to performance shares that have not yet been
earned shall be forfeited.
MISCELLANEOUS PROVISIONS
In general, if the service of a recipient of performance shares is
involuntarily terminated without cause within twelve months following a change
in control of the Company, a recipient of performance shares is entitled to a
pro rata payment as though the recipient had retired [confirm]. In addition, in
the event of a tender offer or exchange offer for the common stock or upon the
occurrence of certain other events, all options granted under the Plan will
become exercisable in full, unless otherwise provided by the Committee.
AMENDMENT OF THE PLAN
The Board of Directors may at any time terminate or amend the Plan. No
amendments to the Plan will require shareholder approval unless such approval is
required to comply with Rule 16b-3 under the Securities Exchange Act of 1934,
Section 422 of the Code or any other applicable law or regulation, including the
requirements of the Nasdaq SmallCap Market.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of the principal federal income tax
consequences of awards under the Plan. The summary is based on current federal
income tax laws and interpretations thereof, all of which are subject to change
at any time, possibly with retroactive effect. The summary is not intended to be
exhaustive.
Limitation on Amount of Deduction. The Company generally will be
entitled to a tax deduction for awards under the Plan only to the extent that
the participants recognize ordinary income from the award. Section 162(m) of the
Code contains special rules regarding the federal income tax deductibility of
compensation paid to the Company's Chief Executive Officer and to each of the
other four most highly compensated executive officers of the Company. The
general rule is that annual compensation paid to any of these specified
executives will be deductible only to the extent that it does not exceed
$1,000,000 or it qualifies as "performance-based compensation" under section
162(m). The Plan has been designed to permit the Compensation Committee to grant
awards which qualify for deductibility under section 162(m).
Taxation of Ordinary Income and Capital Gains. Subject to certain
exceptions, the maximum federal tax rate on "net capital gains" from the sale or
exchange of capital assets is 20%. "Net capital gain" is the excess of net
long-term capital gain over net short-term capital loss. Short-term capital
gains are taxed at the same rates applicable to ordinary income. Gains or losses
-13-
<PAGE> 16
from the sale or exchange of capital assets will be "long-term" if the capital
asset was held for more than one year and "short-term" if the capital asset was
held for one year or less. For taxpayers with certain income levels, the
marginal tax rate applicable to ordinary income can range up to 39.6%. The
classification of income as ordinary compensation income or capital gain is also
relevant for income tax purposes for taxpayers who have capital losses and
investment interest.
Nonqualified Stock Options. A participant who is granted a nonqualified
option does not recognize taxable income upon the grant of the option, and the
Company is not entitled to a tax deduction. The participant will recognize
ordinary income upon the exercise of the option in an amount equal to the excess
of the fair market value of the option shares on the exercise date over the
option price. Such income will be treated as compensation to the participant
subject to the applicable withholding requirements. The Company is generally
entitled to a tax deduction in an amount equal to the amount taxable to the
participant as ordinary income in the year the income is taxable to the
participant. Any appreciation in value after the time of exercise will be
taxable to the participant as capital gain and will not result in a deduction by
the Company.
The participant may also be required to recognize gain or loss upon the
sale of the option shares. If the selling price of the option shares exceeds the
participant's basis in the shares, the participant will recognize long-term
capital gain if the option shares were held for more than one year, and
short-term capital gain if the shares were held for one year or less. If the
selling price of the option shares is less than the participant's basis in the
shares, the participant will recognize long-term or short-term capital loss
depending on how long the shares were held. The participant's basis in the
option shares will equal the amount of ordinary income recognized by the
participant upon exercise of the option, plus any cash paid to exercise the
option.
Incentive Stock Options. Incentive stock options may be granted only to
participants who are employees. An employee who receives an incentive stock
option does not recognize taxable income upon the grant or exercise of the
option, and the Company is not entitled to a tax deduction. The difference
between the option price and the fair market value of the option shares on the
date of exercise, however, will be treated as a tax preference item for purposes
of determining the alternative minimum tax liability, if any, of the employee in
the year of exercise. The Company will not be entitled to a deduction with
respect to any item of tax preference.
An employee will recognize gain or loss upon the disposition of shares
acquired from the exercise of incentive stock options. The nature of the gain or
loss depends on how long the option shares were held. If the option shares are
not disposed of pursuant to a "disqualifying disposition" (i.e., no disposition
occurs within two years from the date the option was granted nor one year from
the date of exercise), the employee will recognize long-term capital gain or
capital loss depending on the selling price of the shares. If option shares are
sold or disposed of as part of a disqualifying disposition, the employee must
recognize ordinary income in an amount equal to the lesser of the amount of gain
recognized on the sale, or the difference between the fair market value of the
option shares on the date of exercise and the option price. Any additional gain
will be taxable to the employee as a long-term or short-term capital gain,
depending on how long the option shares were held. The Company is generally
entitled to a deduction in computing its federal income taxes for the year of
disposition in an amount equal to any amount taxable to the employee as ordinary
income.
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<PAGE> 17
Performance Shares. A participant who receives performance shares will
generally recognize additional compensation taxable as ordinary income and
subject to withholding, and the Company will be entitled to a tax deduction, at
the time payment is made, whether in the form of cash or shares of the Company's
common stock. To the extent that payment is made in the form of stock, the
amount taxable as compensation to the participant and deductible by the Company
is measured by the then fair market value of the shares, which constitutes an
addition to the participant's tax basis in such shares.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE PLAN.
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<PAGE> 18
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the number of shares of Common Stock
owned by any person (including any group) known by management to beneficially
own more than 5% of the Common Stock as of April 24, 2000. Unless indicated
otherwise in a footnote, each individual or group possesses sole voting and
investment power with respect to the shares indicated as beneficially owned.
<TABLE>
<CAPTION>
Number of Shares Percent
Name and Address of Beneficially of
Beneficial Owner Owned Class
------------------- ---------------- -------
<S> <C> <C>
Brookhaven Capital Management 5,128,913 34.1%
Co., Ltd., et al. (1)(4)
3000 Sandhill Road, Building 4, Suite 130
Menlo Park, CA 94025
Morgens, Waterfall, Vintiadis & 3,382,938 22.5%
Company, Inc., et al. (2)(4)
10 East 50th Street, 26th Floor
New York, NY 10022
Allen Holdings, Inc., et al. (3)(4) 2,509,660 16.7%
711 Fifth Avenue
New York, NY 10022
</TABLE>
- ---------------
(1) The sources of the information relating to this group of shareholders
are Amendment No. 3 to a statement filed with the Securities and
Exchange Commission by such group and dated March 29, 1999, and the
Company's records. Other members of the group are: Brookhaven Capital
Management, LLC, Vincent Andrew Carrino, Watershed Partners, L.P.,
Piton Partners, L.P., Watershed (Cayman) Ltd., Robert B. Fagenson, and
Gerald Anthony Ryan. Certain members of the group have disclaimed
beneficial ownership of Common Stock by other members of the group. Mr.
Carrino is President and Chief Executive Officer of the Company and
Messrs. Fagenson and Ryan are directors of the Company.
(2) The source of the information relating to this group of shareholders is
Amendment No. 5 to a statement filed with the Securities and Exchange
Commission by such group and dated April 7, 2000. Other members of the
group are: Phoenix Partners, L.P., Betje Partners, L.P., Phaeton (BVI)
Ltd. (f/k/a Phaeton International, N.V.), Restart Partners, L.P.,
Restart Partners II, L.P., Restart Partners III, L.P., Restart Partners
IV, L.P., Endowment Restart LLC (f/k/a The Common Fund for Non-Profit
Organizations), Morgens Waterfall Income Partners, L.P., Edwin H.
Morgens and John C. "Bruce" Waterfall. Mr. Morgens is a director of the
Company.
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<PAGE> 19
(3) The source of the information relating to this group of shareholders is
Amendment No. 3 to a statement filed with the Securities and Exchange
Commission by such group and dated April 20, 1999. Other members of the
group are Allen & Company Inc., Allen Value Partners, L.P., and Allen
Value Limited. According to such statement, the number of shares
beneficially owned by the group are: Allen Holdings, Inc.--2,509,660;
Allen & Company Inc.--313,442; Allen Value Partners, L.P.--1,962,545;
and Allen Value Limited--233,672. Philip Scaturro, a director of the
Company, is Executive Vice President and a Managing Director of Allen &
Company, Inc.
(4) Brookhaven Capital Management Co., Ltd., Morgens, Waterfall, Vintiadis
& Company, Inc., Allen Holdings, Inc., and Messrs. Fleming, Jackson,
and Noonan are parties to the Shareholders Agreement, which contains
voting arrangements with respect to the election of Directors. The
parties to the Shareholders Agreement have not agreed to vote or act as
a group in matters other than those discussed above.
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<PAGE> 20
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the number of shares of Common Stock
beneficially owned by all directors and nominees, each of the persons named in
the Summary Compensation Table and directors, nominees and executive officers as
a group as of April 24, 2000. Unless indicated otherwise in a footnote, each
person possesses sole voting and investment power with respect to the shares
indicated as beneficially owned.
<TABLE>
<CAPTION>
Name of Number of Shares Percent
Beneficial Owner Beneficially Owned of Class
---------------- ------------------ --------
<S> <C> <C>
Vincent A. Carrino 5,128,913 (1) 34.1%
John P. Chandler 150,000 (2) *
John P. Delavan 160,167 (3) 1.1%
Robert B. Fagenson 5,128,913 (4) 34.1%
Ned N. Fleming, III 142,474 (5) *
Eric C. Jackson 498,673 (6) 3.3%
Edwin H. Morgens 3,382,938 (7) 22.5%
Thomas J. Noonan, Jr. 30,610 *
Gerald Anthony Ryan 5,128,913 (8) 34.1%
Philip Scaturro 2,509,660 (9) 16.7%
Roger T. Burbage 101,000 (10) *
All directors, nominees and executive 11,843,268 (11) 77.7%
officers as a group (10 persons)
</TABLE>
- ---------------
* Less than one percent.
(1) Includes 5,045,113 shares as to which Mr. Carrino shares voting and
investment power.
(2) Includes 100,000 shares that may be purchased pursuant to stock options
that are exercisable.
(3) The information as to shares owned by this former executive officer may
not be accurate as of April 24, 2000. Includes 86,667 shares that may
be purchased pursuant to stock options that are exercisable.
(4) Includes 5,076,913 shares as to which Mr. Fagenson shares voting and
investment power.
(5) Includes 95,474 shares held by an affiliate of Mr. Fleming and 37,500
shares held by Mr. Fleming's minor children.
(6) Includes 323,673 shares as to which Mr. Jackson shares voting and
investment power, and 100,000 shares that may be purchased pursuant to
stock options that are exercisable.
(7) Represents shares owned of record by various entities who may be deemed
affiliates of Mr. Morgens. Mr. Morgens has disclaimed beneficial
ownership of such securities.
(8) Includes 4,948,913 shares as to which Mr. Ryan shares voting and
investment power, and 10,000 shares which Mr. Ryan holds as Trustee for
the Ryan Children's Trust.
(9) Represents shares owned of record by various entities who may be deemed
affiliates of Mr. Scaturro.
(10) The information as to shares owned by this former executive officer may
not be accurate as of April 24, 2000. Includes 75,000 shares that may
be purchased pursuant to stock options that are exercisable.
(11) Includes 200,000 shares that may be purchased pursuant to stock options
that are exercisable.
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<PAGE> 21
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Great Basin Companies ("Great Basin"), a Salt Lake City-based truck
dealership, is an affiliate of Eric C. Jackson, the Company's President and
Chief Executive Officer. In 1999, Great Basin sold approximately 224 tractors to
unaffiliated leasing companies which leased the tractors to the Company's
subsidiaries. As selling dealer, Great Basin was paid a commission by the
lessors equal to approximately 2% of the fair market value of the tractors. The
terms of the leases entered into with such leasing companies are the result of
arm's-length negotiations between the Company and the lessors. The Company
believes that the involvement of Great Basin as selling dealer has not resulted
and will not result in lease terms that are less favorable to the Company than
would otherwise be available to it. The Company also purchases maintenance parts
and services from Great Basin from time to time. Total payments to Great Basin
in 1999 for these services were $735,000.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
The date by which shareholder proposals must be received by the Company
for inclusion in the proxy materials relating to the 2001 annual meeting of
shareholders is December 29, 2000. Notice of any other shareholder proposals
must be received by the Company not less than 60 days prior to the 2001 annual
meeting; provided, however, that in the event that less than 70 days' notice or
prior public disclosure of the date of the meeting is given or made to
shareholders (which notice or public disclosure shall include the date of the
annual meeting specified in the By-Laws of the Company, if the By-Laws have been
filed with the Securities and Exchange Commission, and if the annual meeting is
held on such date), notice by the shareholder to be timely must be received not
later than the close of business on the tenth day following the day on which
such notice of the date of the annual meeting was mailed or such public
disclosure was made. Such proposals must comply with all of the requirements set
forth in the rules and regulations of the Commission. In addition, any
shareholder interested in making a proposal is referred to the advance
notification requirements set forth in the Company's By-Laws. Proposals must
comply with all of the requirements of Rule 14a-8 of the Securities and Exchange
Commission, as well as the advance notification requirements set forth in the
Company's By-Laws. A copy of the advance notification requirements may be
obtained from Thomas J. Bell, Chief Financial Officer, Intrenet, Inc., 400
Technecenter Drive, Milford, Ohio 45150.
ANNUAL REPORT ON FORM 10-K
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR 1999 AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING FINANCIAL STATEMENTS, BUT
EXCLUDING EXHIBITS, HAS BEEN SENT ALONG WITH THIS PROXY STATEMENT AND MAY BE
OBTAINED WITHOUT CHARGE UPON REQUEST TO THOMAS J. BELL, CHIEF FINANCIAL OFFICER,
INTRENET, INC., 400 TECHNECENTER DRIVE, SUITE 200, MILFORD, OHIO 45150, (513)
576-6666.
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<PAGE> 22
INDEPENDENT ACCOUNTANTS
The Audit Committee of the Board of Directors has not yet acted to
select independent accountants for the Company for the year 2000. A
representative of Arthur Andersen LLP, the Company's independent accountant for
1999, is expected to be present at the meeting and will be given an opportunity
to make a statement if he so desires and to respond to appropriate questions.
INCORPORATION BY REFERENCE
To the extent this Proxy Statement has been or will be specifically
incorporated by reference into any filing by the Company under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, the
sections of this Proxy Statement entitled "Compensation Committee Report on
Executive Compensation" and "Comparative Stock Performance" shall not be deemed
to be so incorporated unless specifically otherwise provided in any such filing.
-20-
<PAGE> 23
ANNEX A
INTRENET, INC.
2000 STOCK OPTION AND INCENTIVE PLAN
1. PLAN PURPOSE. The purpose of the Plan is to promote the long-term
interests of the Company and its stockholders by providing a means for
attracting and retaining Employees and Directors who provide services to the
Company and its Affiliates.
2. DEFINITIONS. The following definitions are applicable to the Plan:
"Affiliate" means any "parent corporation" or "subsidiary corporation"
of the Company as such terms are defined in Code Sections 424(e) and (f),
respectively.
"Award" means the grant by the Committee of Incentive Stock Options,
Nonqualified Stock Options, Performance Shares or any combination of the
foregoing, pursuant to the terms of the Plan.
"Award Agreement" means the written agreement setting forth the terms
and provisions applicable to an Award granted under the Plan.
"Board" means the Board of Directors of the Company.
"Cause" means, in connection with a Participant's Termination of
Service, theft or embezzlement from the Company or any Affiliate, violation of a
material term or condition of employment, disclosure of confidential information
of the Company or any Affiliate, conviction of the Participant of a crime of
moral turpitude, stealing of trade secrets or intellectual property owned by the
Company or any Affiliate, any act by the Participant in competition with the
Company or any Affiliate, or any other act, activity or conduct of a Participant
which in the opinion of the Board is adverse to the best interests of the
Company or any Affiliate.
"Change in Control" means any one of the following events: (a) any
third person, including a "group" as defined in Section 13(d)(3) of the Exchange
Act after the date of the adoption of the Plan by the Board, first becomes the
beneficial owner of shares of capital stock of the Company with respect to which
25% or more of the total number of votes for the election of the Board of
Directors of the Company may be cast, (b) as a result of, or in connection with,
any cash tender offer, exchange offer, merger or other business combination,
sale of assets or contested election, or combination of the foregoing, the
persons who were Directors of the Company shall cease to constitute a majority
of the Board of the Company or (c) the stockholders of the Company shall approve
an agreement providing either for a transaction in which the Company will cease
to be an independent publicly owned entity or for a sale or other disposition of
all or substantially all the assets of the Company; provided, however, that the
occurrence of any of the foregoing events shall not be deemed a Change in
Control if, prior to occurrence, a resolution specifically approving the
occurrence shall have been adopted by at least a majority of the Board.
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<PAGE> 24
"Code" means the Internal Revenue Code of 1986, as amended, and
interpretive rules and regulations thereunder.
"Committee" means the Committee appointed by the Board to administer
the Plan.
"Company" means Intrenet, Inc., an Indiana corporation.
"Date of Grant" means the date on which an Award is granted, as
determined by the Committee; provided, however, that in the absence of a
Committee determination, the date on which the Committee adopts a resolution
granting the Award.
"Director" means any individual who is a member of the Board regardless
of whether the Director is an Employee of the Company or any Affiliate.
"Disability" means total and permanent disability as determined by the
Committee pursuant to Code Section 22(e)(3).
"Employee" means any person employed by the Company or an Affiliate, or
expected to be employed by the Company or Affiliate, provided the individual
becomes actually so employed.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exercise Price" means the price per Share at which the Shares subject
to an Option may be purchased upon exercise of the Option.
"Incentive Stock Option" means an Option to purchase Shares which is
intended to qualify under Code Section 422.
"Market Value" means the last reported sale price on the date in
question (or, if there is no reported sale on such date, the last preceding date
on which any reported sale occurred) of one Share on the principal exchange or
the Nasdaq Small Cap Market on which the Shares are then listed for trading, as
the case may be, or if the Shares are not listed for trading on any exchange or
on the Nasdaq Small Cap Market or any similar system then in use, the mean
between the closing high bid and low asked quotations of one Share on the date
in question as reported by Nasdaq or any similar quotation system then in use,
or, if no such quotations are available, the fair market value on such date of
one Share as the Committee shall determine.
"Nonqualified Stock Option" means an Option to purchase Shares which is
not intended to qualify under Code Section 422.
"Option" means an Incentive Stock Option or a Nonqualified Stock
Option.
"Participant" means an individual selected by the Committee to receive
an Award.
"Performance Cycle" means the period of time, designated by the
Committee, over which Performance Shares may be earned.
A-2
<PAGE> 25
"Performance Shares" means Shares awarded to a Participant pursuant to
Section 11 of the Plan.
"Plan" means the Intrenet, Inc., 2000 Stock Option and Incentive Plan.
"Reorganization" means the liquidation or dissolution of the Company or
any merger, consolidation or combination of the Company (other than a merger,
consolidation or combination in which the Company is the continuing entity and
which does not result in the outstanding Shares being converted into or
exchanged for different securities, cash or other property or any combination
thereof).
"Retirement" means, with respect to an Employee, Termination of Service
with the Company or any Affiliate in accordance with the Company's retirement
policy as then in effect.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means the shares of common stock, without par value, of the
Company.
"Termination of Service" means, in the case of an Employee, the
termination of the employment relationship between the Employee and the Company
and all Affiliates; and in the case of an individual that is not an Employee,
the termination of the service relationship between the individual and the
Company and all Affiliates.
3. ADMINISTRATION. The Plan shall be administered by a Committee, which
shall consist of two or more members of the Board. The members of the Committee
shall be appointed by the Board. A majority of the Committee shall constitute a
quorum, and the acts of a majority of the members present at any meeting at
which a quorum is present, or acts approved in writing by all members of the
Committee without a meeting, shall be acts of the Committee.
Except as expressly limited by the Plan, the Committee shall have all
powers and discretion necessary or appropriate to administer the Plan and
control its operation, including, but not limited to, the power to (a) select
Participants, grant Awards and provide the terms and conditions of all Awards
(which need not be identical among Participants); (b) interpret the Plan and
Awards; and, (c) adopt rules and procedures for the administration,
interpretation and operation of the Plan. All determinations and decisions made
by the Committee pursuant to the provisions of the Plan shall be final,
conclusive, and binding on all persons, and shall be given the maximum deference
permitted by law.
4. PARTICIPANTS. The Committee, in its sole discretion, may select from
time to time Participants in the Plan from those Employees and Directors who, in
the opinion of the Committee, have the capacity for contributing in a
substantial measure to the successful performance of the Company or its
Affiliates; provided, however, Incentive Stock Options may be granted only to
Employees of the Company or its Affiliates.
5. SUBSTITUTE OPTIONS. In the event the Company or an Affiliate
consummates a transaction described in Code Section 424(a), persons who become
Employees or Directors on
A-3
<PAGE> 26
account of such transaction may be granted Options in substitution for Options
granted by the former employer. The Committee, in its sole discretion and
consistent with Code Section 424(a) shall determine the Exercise Price of the
substitute Options.
6. AWARD AGREEMENT. Each Award shall be evidenced by an Award Agreement
containing the terms and the conditions of the Award, as determined by the
Committee, in its sole discretion. With respect to Awards of Options, in
addition to any other terms and conditions the Committee establishes, the Award
Agreement shall specify the Exercise Price, the time or times at which an Option
will vest or become exercisable, the term of the Option, the number of Shares to
which the Option pertains, any conditions to exercise of the Option, and whether
the Option is intended to be an Incentive Stock Option or a Nonqualified Stock
Option.
7. SHARES SUBJECT TO PLAN, LIMITATIONS ON GRANTS AND EXERCISE PRICE.
Subject to adjustment by the operation of Section 12 of the Plan:
(a) The maximum number of Shares which may be issued under
Awards under the Plan shall not exceed 1,000,000 Shares. The Shares may
be either authorized and unissued Shares or Shares acquired by the
Company and held as treasury Shares. Shares that are withheld to
satisfy payment of the Exercise Price or any tax withholding obligation
and any Shares subject to an Award which expires, terminates or is
surrendered for cancellation may be subject to new Awards under the
Plan.
(b) The number of Shares which may be issued hereunder to any
single Employee during any calendar year under all forms of Awards
shall not exceed 150,000 Shares.
(c) The Exercise Price for Shares awarded under Incentive
Stock Options may not be less than the Market Value of the Shares on
the Date of Grant; provided, however, the Exercise Price may not be
less than 110% of Market Value with respect to Incentive Stock Options
granted to any Employee who, together with persons whose stock
ownership is attributed to the Employee pursuant to Code Section
424(d), owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any of its
Affiliates. The Exercise Price for Shares awarded under Nonqualified
Stock Options may not be less than 85% of the Market Value of the
Shares on the Date of Grant.
8. TERMINATION OF OPTIONS. Unless otherwise provided in the Award
Agreement, Options shall expire on, and may not be exercised after, the earliest
to occur of the following events:
(a) the tenth anniversary of the Date of Grant;
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<PAGE> 27
(b) three (3) months after any Termination of Service by
reason of Retirement, Disability or death; and
(c) the date of Termination of Service by the Company for
Cause or the date of any Termination of Service by the Participant for
any reason other than those reasons specified in (b) above.
9. METHOD OF EXERCISE OF OPTIONS. To exercise an Option under the Plan,
the Participant must give written notice to the Company (which shall specify the
number of Shares with respect to which the Participant elects to exercise the
Option) together with full payment of the Exercise Price. The date of exercise
shall be the date on which the notice and payment are received by the Company.
Payment of the Exercise Price shall be made in cash (including check, bank draft
or money order), except that the Committee, in its sole discretion, may permit a
Participant to pay the Exercise Price by delivering Shares owned by the
Participant for more than six months and having a Market Value on the date of
exercise equal to the Exercise Price.
10. INCENTIVE STOCK OPTIONS - ADDITIONAL PROVISIONS. Any provisions of
the Plan to the contrary notwithstanding, Incentive Stock Options shall be
subject to the following:
(a) The aggregate Market Value (determined on the Date of
Grant) of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by any Employee during any calendar year
(under all plans of the Company and its Affiliates) shall not exceed
$100,000.
(b) No Incentive Stock Option may be exercised more than three
(3) months after the Participant's Termination of Service for any
reason other than Disability or death, unless (a) the Participant dies
during such three-month period, and (b) the Award Agreement or the
Committee permits later exercise.
(c) No Incentive Stock Option may be exercised after the
expiration of ten (10) years from the Date of Grant; provided, however,
that if the Option is granted to an Employee who, together with persons
whose stock ownership is attributed to the Employee pursuant to Code
section 424(d), owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any of
its Affiliates, the Option may not be exercised after the expiration of
five (5) years from the Date of Grant.
Unless otherwise provided by the Committee in the Award Agreement, to the extent
that an Option does not qualify as an Incentive Stock Option, because of its
provisions, the time and manner of its exercise or otherwise, the Option or
portion thereof which does not so qualify, shall constitute a separate
Nonqualified Stock Option.
11. PERFORMANCE SHARES. The Committee, in its sole discretion, may from
time to time authorize the grant of Performance Shares upon the achievement of
performance goals (which may be cumulative and/or alternative) as may be
established, in writing, by the Committee based on any one or any combination of
the following business criteria: (a) earnings per Share;
A-5
<PAGE> 28
(b) return on equity; (c) return on assets; (d) operating income; or (e) Market
Value per Share. At the time as it is certified, in writing, by the Committee
that the performance goals established by the Committee have been attained or
otherwise satisfied within the Performance Cycle, the Committee shall authorize
the payment of cash in lieu of Performance Shares or the issuance of Performance
Shares registered in the name of the Participant, or a combination of cash and
Shares. The grant of an Award of Performance Shares shall be evidenced by an
Award Agreement containing the terms and conditions of the Award as determined
by the Committee. To the extent required under Code Section 162(m), the business
criteria under which performance goals are determined by the Committee shall be
resubmitted to stockholders for reapproval no later than the first stockholder
meeting that occurs in the fifth year following the year in which stockholders
previously approved the Plan.
In the case of a Participant's Termination of Service before the end of
a Performance Cycle for any reason other than Retirement, Disability, or death,
the Participant shall forfeit all rights with respect to any Performance Shares
that were being earned during the Performance Cycle. The Committee, in its sole
discretion, may establish guidelines providing that if a Participant incurs a
Termination of Service before the end of a Performance Cycle by reason of
Retirement, Disability, or death, the Participant shall be entitled to a
prorated payment with respect to any Performance Shares that were being earned
during the Performance Cycle.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of any
change in the outstanding Shares subsequent to the effective date of the Plan by
reason of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Company, the maximum aggregate number and
class of shares as to which Awards may be granted under the Plan and the number
and class of shares and Exercise Price of Options with respect to Awards
previously granted under the Plan may be adjusted by the Committee, in its sole
discretion, and the Committee's determination shall be conclusive.
13. EFFECT OF REORGANIZATION. Except as otherwise specifically provided
in the Award Agreement, Awards will be affected by a Reorganization as follows:
(a) If the Reorganization is a dissolution or liquidation of
the Company, then each outstanding Option shall terminate, but each
Participant to whom the Option was granted shall have the right,
immediately prior to such dissolution or liquidation to exercise his
Option in full, notwithstanding the provisions of Section 10, and the
Company shall notify each Participant of the Participant's right within
a reasonable period of time prior to any dissolution or liquidation.
(b) If the Reorganization is a merger or consolidation, other
than a Change in Control subject to Section 14 of this Plan, upon the
effective date of the Reorganization, each Optionee shall be entitled,
upon exercise of his Option in accordance with all of the terms and
conditions of the Plan, to receive in lieu of Shares, shares of stock
or
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other securities or consideration as the holders of Shares shall be
entitled to receive pursuant to the terms of the Reorganization.
The adjustments contained in this Section and the manner of application
of its provisions shall be determined solely by the Committee.
14. EFFECT OF CHANGE OF CONTROL. If a Participant incurs an involuntary
Termination of Service for any reason other than Cause at any time within twelve
months after a Change in Control, unless the Committee shall have otherwise
provided in the Award Agreement, the Participant shall be entitled to receive a
prorata payment with respect to Performance Shares to the same extent as the
Participant's Termination of Service for reason of Retirement under Section 11
of the Plan. If a tender offer or exchange offer for Shares (other than such an
offer by the Company) is commenced, or if the event specified in clause (c) of
the definition of a Change in Control contained in Section 2 shall occur, unless
the Committee shall have otherwise provided in the Award Agreement, all Options
theretofore granted and not fully exercisable shall become exercisable in full
upon the happening of the event and shall remain exercisable in accordance with
their terms.
15. ASSIGNMENTS AND TRANSFERS. Except as expressly authorized by the
Committee in the Award Agreement, Awards may not be assigned, encumbered or
transferred otherwise than by will or the laws of descent and distribution, and
during the Participant's lifetime, may be exercisable only by the Participant.
16. PARTICIPANT RIGHTS LIMITED. No Employee, Director or other person
shall have a right to be selected as a Participant nor, having been so selected,
to be selected again as a Participant, and no Employee, Director or other person
shall have any claim or right to be granted an Award under the Plan or under any
other incentive or similar plan of the Company or any Affiliate. Neither the
Plan nor any action taken pursuant to the Plan shall be construed as giving any
person any right to be retained in the employ or service of the Company or any
Affiliate.
17. SHAREHOLDER RIGHTS. No Participant or other person shall have any
of the rights or privileges of a shareholder of the Company with respect to any
Shares issuable pursuant to an Award unless and until certificates representing
the Shares shall have been issued, recorded on the records of the Company or its
transfer agents or registrars, and delivered to the Participant or other person
entitled to the Shares.
18. WITHHOLDING TAX. Prior to the delivery of any Shares or cash
pursuant to an Award, the Company shall have the right and power to deduct or
withhold, or require the Participant to remit to the Company, an amount
sufficient to satisfy all applicable tax withholding requirements. The
Committee, in its sole discretion and pursuant to such procedures as it may
establish from time to time, may permit or require a Participant to satisfy all
or part of the tax withholding obligations in connection with an Award by
delivering to the Company Shares which the Participant has owned for more than
six months having a Market Value equal to the amount required to be withheld.
The amount of the withholding requirement shall be deemed to include any amount
which the Committee determines, not to exceed the amount determined by using the
maximum federal, state or local marginal income tax rates applicable to the
Participant with respect to the Award on the date that the
A-7
<PAGE> 30
amount of tax to be withheld is to be determined for these purposes. For these
purposes, the value of the Shares to be withheld or delivered shall be equal to
the Market Value as of the date that the taxes are required to be withheld.
19. SETTLEMENT OF AWARDS. The Company's obligation to deliver Shares
with respect to an Award shall be subject to such conditions, restrictions and
contingencies as the Company may establish, including but not limited to, the
receipt of a representation as to the investment intention of the person to whom
Shares are to be delivered, in such form as the Company shall determine to be
necessary or advisable to comply with the provisions of the Securities Act or
any other applicable federal or state securities legislation. It may be provided
that any representation requirement shall become inoperative upon a registration
of the Shares or other action eliminating the necessity of a representation
under the Securities Act or other securities legislation. The Company shall not
be required to deliver any Shares under the Plan prior to (a) the admission of
the Shares to listing on any stock exchange or system on which the Shares may
then be listed, and (b) the completion of any registration or other
qualification of the Shares under any state or federal law, rule or regulation,
as the Company shall determine to be necessary or advisable.
20. LOANS.
(a) The Company may make loans to a Participant in connection
with the exercise of Options subject to the following terms and
conditions and such other terms and conditions not inconsistent with
the Plan, including the rate of interest, if any, as the Company shall
impose from time to time.
(b) No loan made under the Plan shall exceed (i) with respect
to Options, the sum of (A) the aggregate Exercise Price option price
payable upon exercise of the Option in relation to which the loan is
made, plus (B) the amount of the reasonably estimated income taxes
payable by the Participant. In no event may any loan exceed the Market
Value of the related Shares at the time of the loan.
(c) No loan shall have an initial term exceeding three years;
provided, that loans under the Plan shall be renewable at the
discretion of the Company; provided, further, that the indebtedness
under each loan shall become due and payable on a date no later than
(i) one year after a Participant's Termination of Service by reason of
death, Retirement or Disability; or (ii) the day of the Participant's
Termination of Service for any reason other than death, Retirement or
Disability.
(d) Loans under the Plan may be satisfied by the Participant,
as determined by the Company, in cash or, with the consent of the
Company, in whole or in part in Shares at Market Value on the date of
such payment.
(e) When a loan shall have been made, Shares having an
aggregate Market Value equal to the amount of the loan may, in the
discretion of the Company, be required to be pledged by the Participant
to the Company as security for payment of the unpaid balance of the
loan. Portions of such Shares may, in the discretion of the Company, be
released from time to time as it deems not to be needed as security.
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<PAGE> 31
(f) Every loan shall meet all applicable laws, regulations and
rules of the Federal Reserve Board and any other governmental agency
having jurisdiction.
21. TERMINATION, AMENDMENT AND MODIFICATION OF PLAN. The Board may at
any time terminate, and may at any time and from time to time and in any respect
amend or modify, the Plan; provided however, that to the extent necessary and
desirable to comply with Rule 16b-3 under the Exchange Act or Code Section 422
(or any other applicable law or regulation, including requirements of any stock
exchange or quotation system on which the Shares are listed or quoted)
shareholder approval of any Plan amendment shall be obtained in such a manner
and to such a degree as is required by the applicable law or regulation; and
provided further, that no termination, amendment or modification of the Plan
shall in any manner affect any Award theretofore granted pursuant to the Plan
without the consent of the Participant to whom the Award was granted or
transferee of the Award.
22. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective
upon its adoption by the Board, subject to approval and ratification by the
shareholders of the Company at the 2000 annual meeting of shareholders. After
approval by the Company's shareholders, the Plan shall continue in effect for a
term of ten (10) years from the date of adoption by the Board of Directors
unless sooner terminated pursuant to Section 21 of the Plan.
23. GOVERNING LAW. The Plan and Award Agreements shall be construed in
accordance with and governed by the laws of the State of Indiana.
ADOPTED BY THE BOARD OF DIRECTORS OF
INTRENET, INC.
AS OF FEBRUARY 4, 2000
ADOPTED BY THE SHAREHOLDERS OF
INTRENET, INC.
AS OF ____________ __, 2000
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<PAGE> 32
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
INTRENET, INC.
The undersigned hereby appoints John P. Chandler and Thomas J. Bell, or
either of them, proxies with power of substitution, and hereby authorizes them
to represent and vote, as designated on the other side, all the shares of common
stock of Internet, Inc. standing in the name of the undersigned with all powers
which the undersigned would possess if present at the annual meeting of
shareholders of the Company to be held June 12, 2000, or at any adjournment or
postponement thereof:
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
<PAGE> 33
[X] Please mark your
vote as in this
example.
Vote
Vote WITHHELD
FOR ALL for all
nominees nominees
listed above listed above
in Proposal 1 in Proposal 1
l. [ ] [ ]
Election of Directors
FOR AGAINST ABSTAIN
2. [ ] [ ] [ ]
To approve the Company's
2000 Stock Option and Incentive Plan
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list below.)
Nominees: Vincent A. Carrino, John P. Chandler, Robert B. Fagenson,
Ned N. Fleming III, Eric C. Jackson, Edwin H. Morgens, Thomas J. Noonan, Jr.,
Gerald Anthony Ryan
1. To elect eight directors to serve for a term of one year.
2. To approve the Company's 2000 Stock Option and Incentive Plan.
3. In their discretion, the Proxy is authorized to vote upon such other
matters (none known at the time of solicitation of this proxy) as may
properly come before the annual meeting or any adjournment or postponement
thereof.
Dated:___________________________________________________________________ , 2000
________________________________________________________________________________
Signature
________________________________________________________________________________
Signature
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
o FOLD AND DETACH HERE o
- --------------------------------------------------------------------------------
ANNUAL MEETING
OF
INTRENET, INC. SHAREHOLDERS
MONDAY, JUNE 12, 2000
10:00 A.M.
THE CHASE MANHATTAN BANK
270 PARK AVENUE
11TH FLOOR -- CONFERENCE ROOM E
NEW YORK, N.Y. 10017
