STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT ("Agreement"), dated as of
November 4, 1996, between Intrenet, Inc., an Indiana corporation
(the "Company"), and John Delavan (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 200,000 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 November 4, 1996). The
Options shall become exercisable as provided in this section
and, once exercisable, shall remain exercisable for a period of
five (5) years from the date hereof. A total of 100,000 Options
shall become exercisable in each of 1997, 1998 and 1999,
depending upon whether the Company meets the following earnings
per share targets ("Targets") for the years indicated:
Number of Options Year
Targets
33,334 1997 $0.22 per share 33,333
1998 The greater of $.30 per share or
15% above 1997 earnings per share 33,333 1999
The greater of $.45 per share or
15% above 1998 earnings per share
If the Company does not meet the Target for a year, but earnings
per share are 90% or more of the Target, the number of Options
that shall become exercisable for such year will be 70% of the
amount in the table. If earnings per share are less than 90%
and more than 80% of the Target, the number of Options that
shall become exercisable for such year will be 60% of the amount
in the table. If earnings per share are less than 80% and more
than 70% of the Target, the number of Options that shall become
exercisable for such year will be 50% of the amount in the
table. If earnings per share are less than 70% of the Target,
no Options shall become exercisable for such year. If the
Company's actual earnings per share exceed the Target for a
year, then up to additional 100,000 Options may become
exercisable for all three years depending upon the percentage
amount by which actual earnings per share exceed the Target for
a year. Each percentage point by which actual earnings per
share exceed the Target shall result in 333.33 additional
Options (rounded to the nearest whole number) becoming
exercisable for a year, up to the number of Options for such
year specified in the table. The determination of the Company's
earnings per share for a year shall be made as of the date that
the Company publicly releases earnings for such year. For
example, if the Company's earnings per share for 1997 are $0.33
per share (50% above the 1997 Target), 16,667 Options in
addition to the 33,334 Options specified in the table (or 50,001
Options in total) shall become exercisable in 1998 when 1997
earnings are released by the Company. The Company, through its
Incentive Compensation Committee, may change the Targets for
1998 and 1999 with the consent of the Participant. Any Options
which do not become exercisable with respect to a specified year
shall not be carried over into a subsequent year.
2. Condition to 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, to the extent permitted by the Plan and applicable law.
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 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/ Edwin H, Morgens
Edwin H. Morgens, Chairman of the Board
By /s/ John Delavan
John Delavan, Participant