<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14A-101)
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:
[_] Preliminary Proxy Statement [_] Confidential, For Use of the
Commission Only (as permitted by
[X] Definitive Proxy Statement Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
PREMIERE TECHNOLOGIES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(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: _____________________________________________________
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PREMIERE TECHNOLOGIES, INC.
3399 PEACHTREE ROAD, N.E.
THE LENOX BUILDING
SUITE 600
ATLANTA, GEORGIA 30326
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
----------------
TO BE HELD ON JULY 29, 1998
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Premiere
Technologies, Inc., a Georgia corporation, will be held on Wednesday, July 29,
1998, at 9:00 a.m., Atlanta time (the "Annual Meeting"), at the JW Marriott
Hotel at Lenox, 3300 Lenox Road, N.E., Atlanta, Georgia 30326, for the
following purposes:
1. To elect two directors for three-year terms; and
2. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on May 20, 1998, are
entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof.
All shareholders are cordially invited to attend the Annual Meeting in
person. HOWEVER, TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, YOU ARE
URGED TO MARK, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE AS PROMPTLY AS POSSIBLE. Any shareholder attending the Annual Meeting
may vote in person even if he or she has returned a proxy. In accordance with
Georgia law, a list of shareholders entitled to vote at the Annual Meeting
will be available for inspection by any shareholder, his agent or attorney at
the time and place of the meeting.
By Order of the Board of Directors,
/s/ Patrick G. Jones
---------------------------
Patrick G. Jones
Corporate Secretary
Atlanta, Georgia
July 7, 1998
<PAGE>
PREMIERE TECHNOLOGIES, INC.
3399 PEACHTREE ROAD, N.E.
THE LENOX BUILDING
SUITE 600
ATLANTA, GEORGIA 30326
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 29, 1998
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Premiere Technologies, Inc., a Georgia
corporation (the "Company" or "Premiere"), for use at the Annual Meeting of
the Shareholders of the Company to be held on Wednesday, July 29, 1998, at
9:00 a.m., Atlanta time, or at any adjournment thereof (the "Annual Meeting").
The Annual Meeting will be held at the JW Marriott Hotel at Lenox, 3300 Lenox
Road, N.E., Atlanta, Georgia 30326. These proxy solicitation materials were
first mailed on or about July 8, 1998, to all shareholders entitled to vote at
the Annual Meeting.
Shareholders of record at the close of business on May 20, 1998 (the "Record
Date"), are entitled to notice of and to vote at the Annual Meeting. As of the
close of business on the Record Date, there were 46,286,140 shares of the
Company's common stock, $.01 par value (the "Common Stock"), outstanding and
entitled to vote. The holders of Common Stock are entitled to one vote per
share on all matters to be voted upon by the shareholders at the Annual
Meeting. As of the close of business on the Record Date, there was one share
of the Company's Series B Voting Preferred Stock (the "Preferred Stock")
outstanding and entitled to vote. The holder of the outstanding share of
Preferred Stock is entitled to the number of votes that the holders of the
shares of exchangeable non-voting shares of Voice-Tel of Canada Limited, a
subsidiary of the Company (the "Exchangeable Shares"), would be entitled to
cast if all such Exchangeable Shares were exchanged for Common Stock on a one-
to-one ratio. As of the close of business on the Record Date, 329,840
Exchangeable Shares were outstanding.
At the Annual Meeting, the shareholders of the Company will be asked to: (i)
elect two Class I directors for three-year terms; and (ii) transact such other
business as may properly come before the Annual Meeting.
The presence at the Annual Meeting in person or by proxy of a majority of
the votes entitled to be cast by holders of Common Stock and Preferred Stock
will constitute a quorum for business at the Annual Meeting. In counting the
votes to determine whether a quorum exists at the Annual Meeting, the number
of votes "for" and abstentions (including instructions to withhold authority
to vote) will be used.
All properly executed proxies delivered to the Company by shareholders
entitled to be voted at the Annual Meeting and not revoked will be voted at
the Annual Meeting in accordance with the directions noted thereon. In voting
for the proposal to elect directors, shareholders may vote in favor of all
nominees, withhold their votes as to all nominees or withhold their votes as
to specific nominees. IN THE ABSENCE OF INSTRUCTIONS, THE SHARES REPRESENTED
BY A SIGNED AND DATED PROXY WILL BE VOTED "FOR" THE ELECTION OF ALL DIRECTOR
NOMINEES NAMED IN THE PROXY STATEMENT. In all other matters that properly come
before the Annual Meeting, the persons named as proxies will vote upon such
matters according to their judgment.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company a written notice of revocation or a duly executed proxy bearing a
later date or by attending the Annual Meeting and voting in person.
The cost of preparing, assembling, printing and mailing the proxy materials
and of reimbursing brokers, nominees and fiduciaries for the out-of-pocket and
clerical expenses of transmitting copies of the proxy materials
<PAGE>
to the beneficial owners of shares will be borne by the Company. Certain
officers and employees of the Company or its subsidiaries, without additional
compensation, may use their personal efforts, by telephone or otherwise, to
obtain proxies in addition to this solicitation by mail. In addition, the
Company has retained Morrow & Co. to assist with the solicitation of proxies,
the estimated cost of which is $4,500, plus expenses.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth to the best of the Company's knowledge
certain information regarding the beneficial ownership of Common Stock as of
June 30, 1998, with respect to the following: (i) each person known to the
Company to be the beneficial owner of more than 5% of the Common Stock; (ii)
each director and each person nominated to become a director; (iii) each Named
Executive Officer (as defined below); and (iv) all executive officers,
directors and each person nominated to become a director as a group.
<TABLE>
<CAPTION>
BENEFICIAL PERCENTAGE
OWNERSHIP OF OF CLASS
NAME OF BENEFICIAL OWNER COMMON STOCK(1) OUTSTANDING
- ------------------------ --------------- -----------
<S> <C> <C>
Boland T. Jones.................................. 3,594,248(2) 7.52%
West Highland Capital, Inc....................... 3,120,000(3) 6.74%
D. Gregory Smith................................. 1,763,814(4) 3.78%
George W. Baker, Sr.............................. 130,832(5) *
Raymond H. Pirtle, Jr. .......................... 63,030(6) *
Roy B. Andersen, Jr.............................. 230,999(7) *
Jeffrey A. Allred................................ 138,849(8) *
William P. Payne................................. 5,500 *
Patrick G. Jones................................. 375,552(9) *
Harvey A. Wagner................................. 4,750 *
All current executive officers and directors as a
group (8 persons)............................... 4,543,760(10) 9.43%
</TABLE>
- --------
* Less than one percent.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission that deem shares to be beneficially
owned by any person who has or shares voting or investment power with
respect to such shares. Shares of the Company's Common Stock subject to
warrants or options that are currently exercisable or exercisable within
60 days of June 30, 1998 are deemed to be outstanding and to be
beneficially owned by the person holding such warrants or options for the
purpose of computing the percentage ownership of such person, but are not
treated as outstanding for the purpose of computing the percentage
ownership of any other person.
(2) Includes 1,925,744 shares held of record by Mr. Jones, 1,523,624 shares
subject to warrants or options that are currently exercisable or
exercisable within 60 days, 590 shares held of record by Mr. Jones' wife
for which Mr. Jones holds the right to vote pursuant to an irrevocable
proxy granted by Mrs. Jones to Mr. Jones, and 144,290 shares held of
record by 22 shareholders for which Mr. Jones holds the right to vote
pursuant to irrevocable proxies granted by such shareholders to Mr.
Jones. Does not include (i) 200 shares held of record by Mr. Jones' wife,
as custodian for the benefit of an unrelated minor child under the
Uniform Gifts to Minors Act, or (ii) 90,900 shares held in three grantor
retained annuity trusts, as to which shares Mr. Jones disclaims
beneficial ownership. The address of Mr. Jones is 3399 Peachtree Road
N.E., The Lenox Building, Suite 600, Atlanta, Georgia 30326.
(3) This information is based solely on a Schedule 13G filed jointly by West
Highland Capital, Inc. ("WHC"), Lang H. Gerhard ("Gerhard"), Estero
Partners, LLC ("LLC"), West Highland Partners, L.P. ("WHP") and
Buttonwood Partners, L.P. ("BW") (collectively, the "Filers"). Such
Schedule 13G states that WHC and Gerhard have shared voting and
dispositive power with respect to 3,120,000 shares of Common Stock, and
LLC, WHP and BW have shared voting and dispositive power with respect to
2,589,850 shares, 2,214,948 shares and 374,902 shares, respectively. Such
Schedule 13G also states that: (i) WHC is a registered investment
advisor; (ii) Gerhard is the sole shareholder of WHC and the manager of
LLC; and (iii) WHC, LLC and Gerhard are general partners of WHP and BP,
which are investment limited partnerships. The address of these Filers is
300 Drake's Landing Road, Suite 290, Greenbrae, California 94904.
(4) Includes 1,403,814 shares held of record by Mr. Smith and 360,000 shares
subject to options or warrants that are currently exercisable or
exercisable within 60 days.
3
<PAGE>
(5) Includes 110,832 shares held of record by Mr. Baker and 20,000 shares
subject to warrants or options that are currently exercisable or
exercisable within 60 days. Does not include 44,000 shares held of record
by Mr. Baker's wife, as to which shares Mr. Baker disclaims beneficial
ownership.
(6) Includes (i) 50,000 shares and (ii) 3,030 shares issuable upon conversion
of $100,000 of the 5 3/4% Convertible Subordinated Notes Due 2004 of
Premiere (the "Notes") which are convertible into Common Stock at an
exercise price of $33.00 per share, all of which are held in a 401(k)
plan for the benefit of Mr. Pirtle. Also includes 10,000 shares subject
to warrants or options that are currently exercisable or exercisable
within 60 days.
(7) Includes 229,059 shares held of record by Mr. Andersen and 1,940 shares
subject to options that are currently exercisable or exercisable within
60 days.
(8) Consists of 138,849 shares subject to warrants or options that are
currently exercisable or exercisable within 60 days.
(9) Includes 9,528 shares held of record by Mr. Jones, 208,000 shares subject
to warrants or options that are currently exercisable or exercisable
within 60 days, and 158,024 shares owned by five trusts of which Mr.
Jones is the sole trustee.
(10) Includes 1,902,413 shares subject to warrants or options that are
currently exercisable or exercisable within 60 days, and 3,030 shares
issuable upon conversion of $100,000 of the Notes that are held in a
401(k) plan for the benefit of Mr. Pirtle.
4
<PAGE>
ELECTION OF DIRECTORS
(ITEM NO. 1 ON PROXY CARD)
The Amended and Restated Bylaws (the "Bylaws") of the Company provide that
the Board of Directors shall consist of not less than three nor more than
seven members, as fixed from time to time by resolution of the Board of
Directors. The Board of Directors is currently set at six members. The Bylaws
also provide for the division of the Board of Directors into three classes,
with the directors in each class serving for a term of three years. The terms
of the two directors in the class to be elected at this Annual Meeting ("Class
I") will expire at the annual meeting of shareholders in 2001; the terms of
the two directors in the second class ("Class II") will expire at the annual
meeting of shareholders in 1999; and the terms of the two directors in the
third class ("Class III") will expire at annual meeting of shareholders in
2000.
At the Annual Meeting, the shareholders will be asked to elect two Class I
directors to serve until the annual meeting of shareholders in 2001. The Board
of Directors has nominated William P. Payne and Jeffrey A. Allred for election
as the Class I directors. These individuals are currently serving as directors
of the Company. Mr. Payne was appointed by the Board of Directors in May 1998
to fill the vacancy created by the resignation of Eduard J. Mayer as a Class I
director in April 1998. Mr. Allred was appointed by the Board of Directors as
a Class I director in May 1998 to fill the vacancy created when the size of
the Board of Directors was increased, thereby creating an additional Class I
director.
Directors are to be elected by a plurality of the votes cast at the Annual
Meeting in person or by proxy by the holders of shares entitled to vote. Votes
that are withheld will not be counted and will have no effect. If any of the
nominees should become unavailable to serve for any reason (which is not
anticipated), the Board of Directors, in its discretion, may designate a
substitute nominee or nominees (in which case the persons named as proxies on
the enclosed form of proxy will vote all valid proxies for the election of
such substitute nominee or nominees), allow the vacancy or vacancies to remain
open until the Board of Directors elects a suitable candidate or candidates or
by resolution reduce the authorized number of directors.
5
<PAGE>
NOMINEES FOR DIRECTORS
The names of the nominees, their ages as of the Record Date and certain
other information about them are set forth below:
<TABLE>
<CAPTION>
NAME AGE DIRECTOR CLASS POSITION WITH COMPANY DIRECTOR SINCE
- ---- --- -------------- --------------------- --------------
<S> <C> <C> <C> <C>
William P. Payne........ 50 Class I Director(1) 1998
Jeffrey A. Allred....... 44 Class I Executive Vice President of 1998
Strategic Development and
Director
</TABLE>
- --------
(1)Mr. Payne is also the Chairman of Orchestrate.com, Inc., a wholly-owned
subsidiary of the Company ("Orchestrate.com").
William P. Payne has served as a director of the Company since May 1998.
Effective July 6, 1998, Mr. Payne became the Chairman of Orchestrate.com. Mr.
Payne was a Vice Chairman of NationsBank Corporation from 1997 until June
1998. He was President and Chief Executive Officer of the Atlanta Committee
for the Olympic Games from 1991 to 1997. Mr. Payne is also a director of
Cousins Properties, Inc., Jefferson-Pilot Corporation, Anheuser-Busch
Companies, Inc. and ACSYS, Inc.
Jeffrey A. Allred has served as Executive Vice President of Strategic
Development of the Company since August 1997 and as a director of the Company
since May 1998. From June 1996 until July 1997, Mr. Allred was a partner in
the Atlanta, Georgia office of the law firm of Alston & Bird LLP. From
February 1992 until June 1996, Mr. Allred was a partner in the Atlanta,
Georgia office of the law firm of Nelson Mullins Riley & Scarborough, L.L.P.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE
ABOVE NOMINEES. PROXIES SOLICITED BY THE BOARD WILL BE SO VOTED UNLESS
SHAREHOLDERS SPECIFY IN THEIR PROXIES A CONTRARY CHOICE.
6
<PAGE>
INCUMBENT DIRECTORS AND EXECUTIVE OFFICERS
The names of the incumbent directors and executive officers (other than the
director nominees), their ages as of the Record Date and certain other
information about them are set forth below:
<TABLE>
<CAPTION>
NAME AGE DIRECTOR CLASS POSITION WITH COMPANY DIRECTOR SINCE
- ---- --- -------------- --------------------- --------------
<S> <C> <C> <C> <C>
Boland T. Jones......... 38 Class III President and Chief Executive 1991
Officer, Chairman of the Board
and Director
George W. Baker, Sr..... 63 Class III Director 1991
Raymond H. Pirtle, Jr... 57 Class II Director 1997
Roy B. Andersen, Jr..... 49 Class II Director(1) 1998
Harvey A. Wagner........ 57 -- Executive Vice President of --
Finance and Administration and
Chief Financial Officer
Patrick G. Jones........ 47 -- Senior Vice President, Chief --
Legal Officer and Corporate
Secretary
</TABLE>
- --------
(1) Mr. Andersen is also the President and Chief Executive Officer of Xpedite
Systems, Inc. ("Xpedite"), a wholly-owned subsidiary of the Company.
Boland T. Jones, a founder of the Company, has served as a director and
Chief Executive Officer and President of the Company since its inception in
July 1991. Since September 1993, Mr. Jones has served as the Chairman of the
Board of Directors. From 1986 until founding the Company, Mr. Jones served as
Chairman, Chief Executive Officer and President of American Network Exchange,
Inc., a diversified transmission provider specializing in niche markets. Mr.
Jones' term as a director expires in 2000.
George W. Baker, Sr. has been a director of the Company since the Company's
inception in July 1991. Since July 1988, Mr. Baker has served as a Director,
President and Chief Executive Officer of Taco Tico, Inc., a Wichita, Kansas
based franchisor of Mexican restaurants. Mr. Baker's prior experience also
includes service on the Board of Directors of Kentucky Fried Chicken
Corporation, as President of Kentucky Fried Chicken Operating Company and as
President, Chief Executive Officer and shareholder of Mr. Gatti's, Inc., a
pizza restaurant chain. Mr. Baker's term as a director expires in 2000.
Raymond H. Pirtle, Jr. has been a director of the Company since June 1997.
Mr. Pirtle has been a managing director and a member of the Board of Directors
of SunTrust Equitable Securities Corporation since February 1989. Prior to
that date, Mr. Pirtle was a general partner of J.C. Bradford & Co. Mr. Pirtle
is a member of the Board of Directors of Sirrom Capital Corporation, a
publicly traded small business investment company. Mr. Pirtle's term as a
director expires in 1999.
Roy B. Andersen, Jr. serves as the President and Chief Executive Officer of
Xpedite and since February 27, 1998, as a director of the Company. Prior to
Xpedite's acquisition by Premiere on February 27, 1998, Mr. Andersen served as
President, Chief Executive Officer and a director of Xpedite since its
formation in July 1988. From February 1987 until July 1988, Mr. Andersen
served as Executive Vice President and Chief Operating Officer of Electronic
Courier Systems, Inc. Mr. Andersen's term as a director expires in 1999.
Harvey A. Wagner has served as Executive Vice President of Finance and
Administration and Chief Financial Officer of the Company since May 1998. From
June 1994 until April 1998, Mr. Wagner was Senior Vice President of Finance,
Chief Financial Officer and Treasurer of Scientific-Atlanta, Inc. From
September 1989 until April 1994, Mr. Wagner was Vice President of Finance and
Chief Financial Officer of ComputerVision Corporation, a supplier of
CAD/CAM/CAE software and services.
Patrick G. Jones has served as Senior Vice President and Chief Legal Officer
of the Company since May 1998. From November 1995 until May 1998, Mr. Jones
served as Senior Vice President of Finance and Legal of the Company. Since
December 1995, Mr. Jones has also served as the Company's Corporate Secretary.
From February 1993 until November 1995, Mr. Jones was a partner in the
Atlanta, Georgia office of the law firm of Nelson Mullins Riley & Scarborough,
L.L.P. From February 1989 until February 1993, Mr. Jones was a partner in the
Atlanta, Georgia law firm of Long, Aldridge & Norman.
7
<PAGE>
COMMITTEES, MEETINGS AND ATTENDANCE
The Company's Board of Directors has established the following committees:
The Executive Committee, which did not meet in 1997, may, within certain
limitations, during the interval between Board meetings, exercise all of the
powers of the Company's Board of Directors. The Executive Committee was
comprised of Boland T. Jones and D. Gregory Smith until Mr. Smith's
resignation from the Board of Directors on September 4, 1997. The Executive
Committee is currently comprised of Mr. Jones.
The Audit Committee, which met two times in 1997, is responsible for
reviewing and making recommendations regarding the Company's independent
auditors, the annual audit of the Company's financial statements and the
Company's internal accounting practices and policies. The Audit Committee was
comprised of Raymond H. Pirtle, Jr. and Eduard J. Mayer until Mr. Mayer's
resignation from the Board of Directors. The Audit Committee is currently
comprised of Mr. Pirtle.
The Compensation Committee, which did not meet, but took action by unanimous
written consent on one occasion in 1997, is responsible for making
recommendations to the Board of Directors regarding compensation arrangements
for key employees and key consultants of the Company. The Compensation
Committee is comprised of George W. Baker, Sr. and Mr. Pirtle.
The Strategic Planning Committee, which did not meet in 1997, is responsible
for the Company's strategic planning. The Strategic Planning Committee was
comprised of Mr. Pirtle and Mr. Mayer until Mr. Mayer's resignation from the
Board of Directors. The Strategic Planning Committee is currently comprised of
Mr. Pirtle.
The 1994 Stock Option Plan Committee, which did not meet in 1997,
administers the 1994 Stock Option Plan. The 1994 Stock Option Plan Committee
was comprised of Boland T. Jones, D. Gregory Smith and George W. Baker, Sr.
until Mr. Smith's resignation from the Board of Directors. The 1994 Stock
Option Plan Committee is currently comprised of Messrs. Boland T. Jones and
Baker.
The 1995 Stock Plan Committee, which did not meet, but took action by
unanimous written consent on five occasions in 1997, administers the 1995
Stock Plan. The 1995 Stock Plan Committee was comprised of Messrs. Baker and
Mayer until Mr. Mayer's resignation from the Board of Directors. The 1995
Stock Plan Committee is currently comprised of Messrs. Baker and Pirtle.
The Board of Directors as a whole acts as a nominating committee to select
management's nominees for election as directors of the Company. The Board of
Directors will consider nominees recommended by shareholders if submitted to
the Board in accordance with the procedures specified in the Company's Bylaws.
The Bylaws provide that a shareholder seeking to nominate candidates for
election as directors at a meeting of shareholders must provide notice of such
nomination not less than 60 nor more than 90 days prior to the meeting, and
such notice must provide the Company certain information regarding the
nominees.
During 1997, ten meetings of the Board of Directors were held and the Board
took action by unanimous written consent on 18 occasions. Each director
attended in excess of 75% of the total number of meetings of the Board and
each committee on which he served in 1997.
8
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth certain information concerning compensation
earned for services rendered in all capacities to the Company by (i) the
Company's Chairman and President and the two other most highly compensated
executive officers of the Company (determined as of December 31, 1997), who
represent the only other executive officers whose total annual salary and
bonus exceeded $100,000 during the year ended December 31, 1997, and (ii) D.
Gregory Smith, who resigned as an executive officer and director of the
Company on September 4, 1997 (each person listed in (i) and (ii) are
hereinafter referred to as the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------ ------------
OTHER ANNUAL SECURITIES ALL OTHER
BONUS COMPENSATION UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY $(1) ($)(2) OPTIONS (#) ($)(3)
- --------------------------- ---- -------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Boland T. Jones......... 1997 $213,429 $ -0- $ 16,500 250,000 $ 75,681
Chairman of the Board 1996 200,000 -0- 16,500 50,000 21,902
of Directors and 1995 175,450 126,128 52,415 1,464,000 24,359
President and Director
Patrick G. Jones(4)..... 1997 157,188 -0- 12,000 50,000 2,683
Senior Vice President, 1996 150,000 -0- 12,000 15,000 2,690
Chief Legal Officer and 1995 25,000 -0- 2,000 246,000 1,066
Secretary
Jeffrey A. Allred(5).... 1997 66,667 50,000 4,000 450,000 -0-
Executive Vice
President of Strategic
Development and
Director
D. Gregory Smith(6)..... 1997 178,929 -0- 48,640 250,000(7) 42,783
Former Executive Vice 1996 200,000 -0- 16,500 50,000 24,681
President, Assistant 1995 151,250 126,128 40,660 1,464,000 27,601
Secretary and Former
Director
</TABLE>
- --------
(1) For Boland T. Jones and D. Gregory Smith, reflects bonuses paid pursuant
to their employment agreements which provided for bonuses calculated, in
1995, as a percentage of the Company's operating revenues and adjusted
earnings before interest and taxes and determined in accordance with such
employment agreements. Messrs. Boland Jones and Smith and Patrick G. Jones
waived their rights under their employment agreements to bonuses in 1996
and 1997, and in consideration therefore, received a grant of certain
stock options. The stock options granted to Mr. Smith in 1997 in lieu of
bonus compensation were canceled. See "--Option Grants in Last Fiscal
Year." For Jeffrey A. Allred, $50,000 represents a bonus paid upon joining
the Company.
(2) For Boland T. Jones, consists of: (i) for 1997, $4,500 of club dues paid
on Mr. Jones' behalf and $12,000 paid related to Mr. Jones' auto
allowance; (ii) for 1996, $4,500 of club dues paid on Mr. Jones' behalf
and $12,000 paid related to Mr. Jones' auto allowance; and (iii) for 1995,
$39,665 of initiation fees and club dues paid on Mr. Jones' behalf and
$12,750 paid related to Mr. Jones' auto allowance. For D. Gregory Smith,
consists of: (i) for 1997, $38,140 of initiation fees and club dues paid
on Mr. Smith's behalf and $10,500 paid related to Mr. Smith's auto
allowance; (ii) for 1996, $4,500 of club dues paid on Mr. Smith's behalf
and $12,000 paid related to Mr. Smith's auto allowance; and (iii) for
1995, $27,910 of initiation fees and club dues paid on Mr. Smith's behalf
and $12,750 paid related to Mr. Smith's auto allowance. For Patrick G.
Jones, for 1997, 1996 and 1995, consists of $12,000, $12,000 and $2,000,
respectively, paid to Mr. Jones' for his auto allowance. For Jeffrey A.
Allred, consists of $4,000 paid related to Mr. Allred's auto allowance.
(3) For Boland T. Jones, consists of: (i) for 1997, $19,770 of premiums on
split dollar life insurance, $26,850 paid related to tax planning and
$29,061 paid related to personal aircraft usage; (ii) for 1996, $20,370 of
premiums on split dollar life insurance, $877 of legal fees and $655 of
premiums paid on term life
9
<PAGE>
insurance; and (iii) for 1995, $18,440 of premiums on split dollar life
insurance, $4,245 of imputed interest on non-interest bearing loans made by
the Company to Mr. Jones, $1,019 for certain estate planning expenses and
$655 of premiums paid on term life insurance. For D. Gregory Smith,
consists of: (i) for 1997, $22,740 of premiums paid on split dollar life
insurance, $11,850 paid related to tax planning and $8,193 paid related to
personal aircraft usage; (ii) for 1996, $23,180 of premiums paid on split
dollar life insurance, $575 of legal fees and $926 of premiums paid on term
life insurance; and (iii) for 1995, $21,080 of premiums on split dollar
life insurance, $4,529 of imputed interest on non-interest bearing loans
made by the Company to Mr. Smith, $1,066 for certain estate planning
expenses and $926 of premiums paid on term life insurance. For Patrick G.
Jones, consists of: (i) for 1997, $2,683 for premiums paid on term life
insurance; (ii) for 1996, $2,690 of premiums paid on term life insurance;
and (iii) for 1995, $1,066 for certain estate planning expenses.
(4) Mr. Jones joined the Company as an executive officer on November 1, 1995.
(5) Mr. Allred joined the Company as an executive officer on August 11, 1997.
(6) Mr. Smith resigned as an executive officer and director of the Company
effective September 4, 1997.
(7) All options to acquire 250,000 shares of Common Stock were canceled
effective September 4, 1997.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning each grant of stock
options to the Named Executive Officers during the year ended December 31,
1997.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM(2)
OPTIONS EMPLOYEES BASE PRICE EXPIRATION --------------------------
NAME GRANTED(1) IN FY ($/SH) DATE 5%($) 10%($)
- ---- ---------- ---------- ----------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Boland T. Jones......... 250,000 7.04% $ 24.50 12/31/02 $1,692,500 $ 3,740,000
Patrick G. Jones........ 50,000 1.41% 24.50 12/31/02 338,500 748,000
Jeffrey A. Allred....... 450,000 12.68% 23.375 08/11/05 5,025,000 12,029,000
D. Gregory Smith........ 250,000(3) 7.04% 24.50 12/31/02 1,692,500 3,740,000
</TABLE>
- --------
(1) All options were granted at the market value on the date of grant as
determined by the Board of Directors.
(2) The dollar amounts under these calculations are the result of calculations
at the 5% and 10% rates set by the Securities and Exchange Commission (the
"Commission") and therefore are not intended to forecast possible future
appreciation, if any, of the price of the Company's Common Stock or the
present or future value of the options.
(3) All options to acquire 250,000 shares of Common Stock were canceled
effective September 4, 1997.
10
<PAGE>
AGGREGATE OPTION EXERCISES AND YEAR END OPTION VALUES
The following table sets forth information concerning option exercises by
each of the Named Executive Officers during the year ended December 31, 1997,
and information concerning the value of unexercised options held by each of
the Named Executive Officers as of December 31, 1997.
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT FY-END FY-END($)(2)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE# REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Boland T. Jones......... 100,000 $ 2,597,710 1,523,624 480,000 $33,360,486 $12,489,600
Patrick G. Jones........ -0- -0- 225,000 80,000 4,456,650 2,081,600
Jeffrey A. Allred....... -0- -0- 150,000 300,000 637,500 1,275,000
D. Gregory Smith........ 893,624 20,140,430 360,000 -0- 9,367,200 -0-
</TABLE>
- --------
(1) These values have been calculated by subtracting the option exercise price
from the market price of the Common Stock on the date of exercise and
multiplying that figure by the total number of options exercised.
(2) These values have been calculated by subtracting the option exercise price
from the market price of the Common Stock on The Nasdaq Stock Market's
National Market on December 31, 1997, and multiplying that figure by the
total number of exercisable/unexercisable options.
DIRECTORS' COMPENSATION
Directors are reimbursed for reasonable expenses incurred by them in
connection with their attendance at Board meetings. In 1997, Messrs. Baker,
Pirtle, Mayer and Robert A. Jetmundsen were granted options to purchase 10,000
shares of Common Stock at an exercise price of $24.50 per share, the market
value on the date of the grant. Mr. Jetmundsen's options vested on the date of
the grant and the remaining options vest on the date of the 1998 Annual
Meeting if the optionee is a member of the Board of Directors on that date.
Mr. Mayer's options were canceled in April 1998 upon his resignation from the
Board of Directors. Mr. Mayer also was granted options to purchase 50,000
shares of Common Stock in March 1997 at an exercise price of $16.75 per share,
the market value on the date of the grant, and such options vested on the date
of the grant.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with certain executive
officers, as follows:
Boland T. Jones. The base annual salary under Boland Jones' employment
agreement was $210,000 for 1997. His base salary increases 5.0% each year,
with additional increases, if any, as set by the Board of Directors. The term
of Boland Jones' employment agreement expires on December 31, 1999; although
it renews automatically for successive one-year terms unless either party
elects not to renew at least 30 days prior to expiration of the term. The
employment agreement provides that Boland Jones will not compete with the
Company during the term of his employment and for one year thereafter. The
Company may not terminate Boland Jones' employment without cause. If his
employment is terminated for any reason, Boland Jones will be entitled to
severance compensation of two and one-half times his base salary in effect on
the date of termination.
Boland Jones' employment agreement provided for annual performance bonus
compensation equal to 1.5% of the Company's adjusted net income before
interest and taxes, as determined in accordance with his employment agreement
("Adjusted EBIT"). This bonus arrangement has been terminated and in future
years Boland Jones may receive bonus compensation at the discretion of the
Board of Directors. In June 1997, Boland Jones agreed to waive any rights to
bonuses otherwise due under his employment agreement for 1997. In
consideration for such waiver, Boland Jones was granted options to acquire
250,000 shares of Common Stock at an exercise price of $24.50 per share, which
was the market value on the date of the grant, and such options vested on
December 31, 1997.
11
<PAGE>
In consideration for entering into certain amendments to his employment
agreement in 1995, Boland Jones was granted options to acquire 1,440,000
shares of Common Stock at an exercise price of $1.61 per share. One-third of
these options vested on each of November 5, 1996 and 1997 and the remaining
one-third vest on November 5, 1998, subject to accelerated vesting upon a
change in control of the Company or the termination of his employment
agreement for any reason. Boland Jones' employment agreement also set the
terms of certain other stock options granted to him and permits him to borrow
funds from the Company for the exercise of options and warrants and the
payment of taxes related to such options and warrants. Any such borrowings
must be secured by shares acquired upon the exercise of the options and
warrants, and the net proceeds from the sale of any such shares must be
applied to the outstanding principal and interest owed to the Company.
Patrick G. Jones. The base annual salary under Patrick Jones' employment
agreement was $157,000 for 1997. His base salary increases 5.0% each year,
with additional increases, if any, as set by the Board of Directors. The term
of Patrick Jones' employment agreement expires on December 31, 1999; although
it renews automatically for successive one-year terms unless either party
elects not to renew at least 30 days prior to expiration of the term. The
employment agreement provides that Patrick Jones will not compete with the
Company during the term of his employment and for one year thereafter. The
employment agreement also provides that the Company may terminate Patrick
Jones' employment only for cause. Notwithstanding such provision, if his
employment is terminated without cause, Patrick Jones will be entitled to
severance compensation of two and one-half times his base salary in effect on
the date of termination.
Patrick Jones' employment agreement provided for annual performance bonus
compensation equal to 0.45% of Adjusted EBIT. This bonus arrangement has been
terminated and in future years Patrick Jones may receive bonus compensation at
the discretion of the Board of Directors. In June 1997, Patrick Jones agreed
to waive any rights to bonuses otherwise due under his employment agreement
for 1997. In consideration for such waiver, Patrick Jones was granted options
to acquire 50,000 shares of Common Stock at an exercise price of $24.50 per
share, which was the market value on the date of the grant, and such options
vested on December 31, 1997.
In consideration for entering into his employment agreement, Patrick Jones
was granted options to acquire 240,000 shares of Common Stock at an exercise
price of $1.61 per share. One-third of these options vested on each of October
31, 1996 and 1997 and the remaining one-third vest on October 31, 1998,
subject to accelerated vesting upon a change in control of the Company.
Patrick Jones' employment agreement permits him to borrow funds from the
Company for the exercise of options and warrants. Any such borrowings must be
secured by shares acquired upon the exercise of the options and warrants, and
the net proceeds from the sale of any such shares must be applied to the
outstanding principal and interest owed to the Company.
Jeffrey A. Allred. Under his employment agreement, Jeffrey Allred was paid a
base annual salary of $200,000 for the year ended December 31, 1997, prorated
for the period of his employment. Commencing in 1999, his base salary
increases 5.0% each year, with additional increases, if any, as set by the
Board of Directors. The term of Mr. Allred's employment agreement expires on
August 11, 2002; although it renews automatically for successive one-year
terms unless either party elects not to renew at least 30 days prior to
expiration of the term. Mr. Allred's employment agreement provides that he
will not compete with the Company during the term of his employment and for
one year thereafter. The employment agreement also provides that the Company
may terminate his employment only for cause. Notwithstanding such provision,
if Mr. Allred's employment is terminated without cause, he will be entitled to
severance compensation equal to two and one-half times his base salary in
effect on the date of termination.
Mr. Allred's employment agreement provides for bonus compensation of
$50,000, which was paid in 1997. In future years, Mr. Allred may receive bonus
compensation at the discretion of the Board of Directors. As a material
inducement to his employment by the Company, Mr. Allred was granted options to
acquire 450,000 shares of Common Stock at an exercise price of $23.375, which
was the market value on the date of the grant. One-third of Mr. Allred's
options vested on August 11, 1997 and the remaining two-thirds vest ratably on
August 11, 1999 and 2000, subject to accelerated vesting upon a change in
control of the Company. Mr. Allred's employment agreement permits him to
borrow funds from the Company for the exercise of options and warrants. Any
such borrowings must be secured by shares acquired upon the exercise of the
options and warrants, and the net proceeds from the sale of any such shares
must be applied to the outstanding principal and interest owed to the Company.
12
<PAGE>
Roy B. Andersen, Jr. In connection with the merger with Xpedite, Mr.
Andersen's existing employment agreement with Xpedite continued in full force
and effect. Under the terms of his employment agreement, Mr. Andersen is paid
an annual base salary of $288,750 and an annual bonus of up to $135,000,
subject to adjustment in any particular year. Mr. Andersen's base annual
salary and his maximum annual bonus amount increase annually by the greater of
five percent or the increase over the prior 12 months in the all cities
Consumer Price Index, as published by the U.S. Bureau of Labor Statistics. Mr.
Andersen's employment agreement, entered into as of April 30, 1997, has a
three-year term, and is renewed automatically for a new three-year term on
each anniversary date of the agreement, unless it is terminated by either
party not less than 90 days prior to the anniversary date.
Mr. Andersen is prohibited from competing with Xpedite during the term of
his agreement and, following termination of his agreement, for the longer of
two years or what would have been the remaining term of his agreement. In the
event Mr. Andersen is unable to perform his duties on behalf of Xpedite as a
result of illness or mental or physical disability or incapacity, payment of
his base salary will continue for six months, after which such payments shall
be suspended. Base salary payments would be resumed at such time as Mr.
Andersen resumed his duties under his employment agreement. Upon termination
of Mr. Andersen's employment agreement by Xpedite under certain circumstances,
or upon the termination of such agreement by Mr. Andersen under certain
circumstances (including upon a change in control of Xpedite), he will
continue to receive payments of salary, bonus and benefits for the longer of
two years or what would have been the remaining term of his agreement.
In connection with the Xpedite merger, each outstanding option to acquire
Xpedite common stock held by Mr. Andersen was converted into the right to
acquire Premiere Common Stock and the Company agreed to assume the terms of
these stock options, except that (i) the Company and its Compensation
Committee will administer the stock option plans and (ii) the number of shares
subject to the options and the exercise price were adjusted based upon the
exchange ratio utilized in the merger. In order to facilitate Mr. Andersen's
retention, the Company agreed to pay a "stay bonus" of $530,000, which vested
as follows: $176,666 as of February 27, 1998, $176,000 on the 91st day after
February 27, 1998 and $176,667 on the 121st day after February 27, 1998. The
Company also agreed to pay Mr. Andersen a bonus of $250,000, which vested as
of March 1, 1998, and which is payable on February 27, 1999. The Company is
not required to pay these bonus amounts if Mr. Andersen terminates his
employment without "good reason" or if he is terminated for "cause." On March
2, 1998, Mr. Andersen was also granted stock options to acquire 583,000 shares
of the Company's Common Stock at an exercise price of $29.25 per share, the
fair market value on the date of the grant. These options vest ratably on
February 27, 1999, 2000, 2001 and 2002, and expire March 2, 2007, and will
vest immediately upon the occurrence of certain events, including a change in
control or a termination without cause.
D. Gregory Smith. Mr. Smith's employment agreement was terminated effective
November 29, 1997 in accordance with that certain Mutual Release dated
December 5, 1997 (the "Mutual Release"). Under the Mutual Release, the Company
and Mr. Smith acknowledged that Mr. Smith resigned as an officer and director
of the Company, effective September 4, 1997, and as an employee, officer and
director of Premiere Communications, Inc., effective November 29, 1997. The
Company and Mr. Smith agreed that Mr. Smith would retain options to purchase
360,000 shares of Common Stock which were attributable to his services to the
Company for 1997. Mr. Smith waived any right to options to purchase 120,000
shares of Common Stock which were attributable to his services to the Company
for 1997 and options to purchase 250,000 shares of Common Stock which were
granted in lieu of bonus compensation in June 1997, and agreed that all such
options were canceled. In addition, Mr. Smith agreed to comply with certain
restrictive covenants in his Employment Agreement, including his covenant not
to compete. The Mutual Release also provides that the Company and Mr. Smith
each released the other from any and all claims they have or may have against
one another.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, the members of the Compensation Committee were George W. Baker,
Sr. and Raymond H. Pirtle, Jr. Neither of Messrs. Baker or Pirtle has ever
been an employee of the Company. Mr. Baker is Boland T. Jones' father-in-law.
13
<PAGE>
The Company has made previous filings under the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, that incorporate
future filings, including this Proxy Statement, in whole or in part. However,
the following Report of the Compensation Committee of the Board of Directors
and Performance Graph shall not be incorporated by reference into any such
filings.
COMPENSATION COMMITTEE REPORT
The Compensation Committee is responsible for recommending to the Board of
Directors the compensation arrangements for the Company's senior management.
Under rules established by the Commission, the Company is required to provide
to shareholders a report of the committee(s) of the Board responsible for
compensation recommendations that sets forth both the committee(s)'
compensation policies applicable to the Company's executive officers and the
committee(s)' bases for the chief executive officer's compensation for the
last fiscal year. With respect to this requirement, the following report
addresses the compensation of the executive officers.
Compensation Policies Applicable to Executive Officers. Generally, in
establishing levels of compensation for executive officers, the Compensation
Committee considers all factors they deem appropriate, which may include,
among others: (i) the Company's recent operating results compared to prior
operating results; (ii) achievement of specific business initiatives; (iii)
experience and special expertise; (iv) appropriate inducements to initial
employment; and (v) alignment of the interests of executive officers with
those of shareholders through award opportunities that can result in ownership
of Common Stock. These factors, however, are only generally considered and all
compensation decisions involve subjectivity.
The Company has employment agreements with its executive officers, Boland T.
Jones, Patrick G. Jones, Jeffrey A. Allred and Roy B. Andersen, Jr., and
expects to enter into employment agreements with Harvey A. Wagner and William
P. Payne in the near future. See "--Employment Agreements." These employment
agreements contain the general terms of each such officer's employment and
establish the minimum compensation that such officers are entitled to receive,
but do not prohibit, limit or restrict these officers' ability to receive
additional compensation from the Company, whether in the form of base salary,
bonus, stock options or otherwise. The Company terminated D. Gregory Smith's
employment agreement in accordance with the Mutual Release. See "--Employment
Agreements."
At present, the executive compensation program comprises salary, certain
bonus opportunities, long-term incentives in the form of stock options and
participation in Company-wide benefit programs. The higher that one rises in
the corporate hierarchy, the more the mix of compensation shifts towards
reliance on stock-based awards. In determining 1997 salary levels, bonuses and
stock option awards, the Compensation Committee took into account the
Company's improved performance during 1996 and 1997.
Bases for the Compensation of the Executive Officers During 1997. The
salaries paid to Messrs. Boland Jones, Patrick Jones, Allred and Smith for the
fiscal year ended December 31, 1997, were determined pursuant to their
respective employment agreements. The base annual salaries of Messrs. Boland
Jones, Patrick Jones, and Smith for the year ended December 31, 1997, were
$210,000, $157,000 and $210,00, respectively, representing increases of 5%
over their respective salaries for the year ended December 31, 1996, as
provided in their employment agreements. Mr. Smith received the prorated
portion of his salary through the date of his resignation as an employee of
the Company in the amount of $178,929. Mr. Allred's base annual salary of
$200,000 for the year ended December 31, 1997 was approved by the entire Board
of Directors. In setting Mr. Allred's salary, the Board exercised its judgment
and considered various factors, including his overall responsibilities and the
importance of these responsibilities to the Company's success, his experience
and ability, and his salary history.
The employment agreements of Messrs. Boland Jones, Patrick Jones, and Smith
provided annual incentives in the form of performance bonuses based on the
level of the Company's adjusted net income before interest and taxes, as
determined in accordance with their employment agreements. These bonus
arrangements have been terminated and in future years Boland Jones and Patrick
Jones may receive bonus compensation at the discretion
14
<PAGE>
of the Board of Directors. In June 1997, Messrs. Boland Jones, Patrick Jones,
and Smith waived any rights to bonuses otherwise due under their employment
agreements for 1997. In consideration for such waivers, Messrs. Boland Jones,
Patrick Jones, and Smith were granted options to acquire 250,000, 50,000 and
250,000 shares of Common Stock, respectively, at an exercise price of $24.50
per share, the fair market value on the date of the grant, which options
vested on December 31, 1997. These options were granted in lieu of bonus
compensation to further align the interests of Messrs. Boland Jones, Patrick
Jones and Smith with those of the Company's shareholders generally, and to
provide further incentives to Messrs. Boland Jones, Patrick Jones and Smith to
remain employed with the Company.
Mr. Allred's employment agreement provides for bonus compensation of
$50,000, which was paid in 1997. Mr. Allred was also granted options to
acquire 450,000 shares of Common Stock at an exercise price of $23.375, the
fair market value on the date of the grant. One-third of Mr. Allred's options
vested on August 11, 1997 and the remaining two-thirds vest ratably on August
11, 1999 and 2000, subject to accelerated vesting upon a change in control of
the Company. Mr. Allred's bonus and options were approved by the entire Board
of Directors as material inducements to his employment.
Mr. Smith's employment agreement was terminated in accordance with the
Mutual Release. The Company and Mr. Smith agreed that he would retain options
to purchase 360,000 shares of Common Stock which were attributable to his
services to the Company for 1997. Mr. Smith waived any right to options to
purchase 120,000 shares of Common Stock which were attributable to his
services to the Company for 1997 and options to purchase 250,000 shares of
Common Stock which were granted in June 1997 in lieu of his bonus, and agreed
that all such options were canceled. In addition, Mr. Smith agreed to comply
with certain restrictive covenants in his employment agreement, including his
covenant not to compete. The Mutual Release also provided that the Company and
Mr. Smith each released the other from any and all claims they have or may
have against one another.
Policy on Deductibility of Compensation. To the extent determinable and as
one of the factors in its consideration of compensation matters, the
Compensation Committee considers the anticipated tax treatment to the Company
and to the executive officers of various payments and benefits.
Interpretations of and changes in the tax laws and other factors beyond the
Compensation Committee's control affect the deductibility of compensation.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
generally limits the corporate tax deduction for compensation paid to
executive officers to $1,000,000 unless certain requirements are met. The
Compensation Committee believes that the Company's Amended and Restated 1995
Stock Plan complies with Section 162(m) and, therefore, stock options and
stock appreciation rights granted under such plan should qualify for the
corporate tax deduction.
The Compensation Committee may design future compensation awards for the
executive officers subject to the deduction limit so the corporate tax
deduction is maximized without limiting the Compensation Committee's
flexibility to attract and retain qualified executives to manage the Company.
However, the Compensation Committee will not necessarily limit executive
compensation to that deductible under Section 162(m). The Compensation
Committee will consider various alternatives to preserving the deductibility
of compensation payments and benefits to the extent reasonably practicable and
to the extent consistent with its other compensation objectives.
The foregoing report has been furnished by:
Compensation Committee
George W. Baker, Sr.
Raymond H. Pirtle, Jr.
15
<PAGE>
PERFORMANCE GRAPHS
The following graph shows the cumulative total shareholder return on the
Company's Common Stock, the Standard & Poor's 500 Composite Stock Price Index
(the "S&P 500") and a self-determined peer group of seven companies (the "1997
Peer Group"), for the period beginning March 5, 1996 (the date that trading
first began on the Nasdaq National Market) and ending December 31, 1997. The
graph assumes an investment in the Company's Common Stock and each index of
$100 on March 5, 1996, and that all dividends were reinvested. The 1997 Peer
Group is composed of the following companies: APAC Teleservices, Inc., Brite
Voice Systems, General Magic Inc., West Teleservices, Inc., Boston
Communication Group Inc., Executive Telecard, Ltd., and SmarTalk Teleservices,
Inc. Total return calculations were prepared by the Center for Research in
Security Prices, The University of Chicago ("CRSP").
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
3/5/96 6/28/96 12/31/96 6/30/97 12/31/97
------ ------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
Premiere Technologies, Inc............ 100.0 120.0 95.2 99.0 105.2
S & P 500............................. 100.0 103.0 115.2 138.9 153.7
Self-Determined 1997 Peer Group....... 100.0 139.3 133.4 85.7 70.4
</TABLE>
16
<PAGE>
The composition of the Company's self-determined peer group has been
changed. The peer group used for comparison in the Company's proxy statement
for its 1997 annual meeting of Shareholders (the "1996 Peer Group") included:
Electronic Data Systems Corp., E*TRADE Group, Inc., Executive Telecard, Ltd.,
NOVA Corporation, SmarTalk Teleservices, Inc. and WorldCom, Inc. Since the
date of the Company's proxy statement for the 1997 annual meeting of
shareholders, the Company has consummated several strategic acquisitions,
including Voice-Tel Enterprises, Inc., its affiliate Voice-Tel Network Limited
Partnership and substantially all of its franchisees; VoiceCom Holdings, Inc.;
Xpedite; and American Teleconferencing Services, Ltd. As a result of these
strategic acquisitions, Premiere has expanded its enhanced communications
service offerings, and the Company believes that the new 1997 Peer Group more
accurately reflects its broader line-of-business.
The following graph shows the cumulative total shareholder return on the
Company's Common Stock, the S&P 500 and the 1996 Peer Group, for the period
beginning March 5, 1996 (the date that trading first began on the Nasdaq
National Market) and ending December 31, 1997. The graph assumes an investment
in the Company's Common Stock and each index of $100 on March 5, 1996, and
that all dividends were reinvested. Total return calculations were prepared by
the CRSP.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
3/5/96 6/28/96 12/31/96 6/30/97 12/31/97
------ ------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
Premiere Technologies, Inc............ 100.0 120.0 95.2 99.0 105.2
S & P 500............................. 100.0 103.0 115.2 138.9 155.7
Self-Determined 1996 Peer Group....... 100.0 124.0 105.2 119.3 119.0
</TABLE>
17
<PAGE>
CERTAIN TRANSACTIONS
In November 1995, the Company loaned Patrick G. Jones $90,000 in connection
with Mr. Jones' transition from his previous employer to the Company. This
unsecured loan was evidenced by a promissory note bearing interest at 6.11%
per annum, the interest on which was payable beginning in November 1997 and
continuing each year until November 1999. This loan and accrued interest were
forgiven in January 1998.
In December 1997, Boland T. Jones exercised an option to purchase 100,000
shares of the Company's Common Stock at an exercise price of $0.52 a share,
and the Company loaned Boland Jones approximately $973,000 to pay the exercise
price for the shares and the federal and state taxes associated with the
exercise of these stock options. This loan is evidenced by a recourse
promissory note bearing interest at 6.0% per annum, which is secured by a
pledge of the Common Stock acquired upon the exercise of the options. All
principal and accrued interest are to be paid in December 2007.
Jeffrey A. Allred was a partner of the law firm of Alston & Bird LLP from
June 1996 until joining the Company in July 1997. Alston & Bird LLP rendered
legal services to the Company and its subsidiaries in 1997 and is expected to
render services to the Company and its subsidiaries in 1998.
18
<PAGE>
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 a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership of such securities with the Securities and
Exchange Commission and the National Association of Securities Dealers, Inc.
Officers, directors and greater than ten percent beneficial owners are
required by applicable regulations to furnish the Company with copies of all
Section 16(a) forms they file.
The Company is required to describe in this report whether it has knowledge
that any person required to file such a report may have failed to do so in a
timely manner. In this regard, all of the Company's directors, all officers
subject to the reporting requirements and each beneficial owner of more than
ten percent of any class of the Company's Common Stock satisfied all
applicable filing requirements except for the following: Raymond H. Pirtle,
Jr. failed to timely file an initial report upon becoming a director in June
of 1997 and Jeffrey A. Allred failed to timely file an initial report upon
becoming an officer in August of 1997. The foregoing is based upon reports
furnished to the Company and, in some cases, written representations and
information provided to the Company by the persons required to make such
filings.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP as auditors for the
Company for the current fiscal year ending December 31, 1998. Arthur Andersen
LLP served as independent auditors for the Company for the fiscal year ended
December 31, 1997, and representatives of that firm of independent accountants
are expected to be present at the Annual Meeting. Arthur Andersen LLP will
have an opportunity to make a statement if they desire to do so and respond to
appropriate questions.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1999 annual
meeting of shareholders must be received by the Company on or before December
10, 1998 to be eligible for inclusion in the Company's Proxy Statement and
proxy related to that meeting.
The Company's Bylaws provide that shareholders seeking to bring business
before a meeting of shareholders or to nominate candidates for election of
directors at a meeting of shareholders must provide notice thereof not less
than 60 nor more than 90 days prior to the meeting, and, in such notice,
provide to the Company certain information relating to the proposal or
nominee.
OTHER MATTERS
The Company knows of no other matters to be submitted at the Annual Meeting.
If any other matters properly come before the Annual Meeting, it is the
intention of the persons named in the enclosed form of proxy to vote the
shares they represent in accordance with their judgment.
A COPY OF THE 1997 ANNUAL REPORT ON FORM 10-K, INCLUDING FINANCIAL
STATEMENTS AND ALL AMENDMENTS THERETO, AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, MAY BE OBTAINED WITHOUT CHARGE UPON WRITTEN REQUEST TO:
CORPORATE SECRETARY, PREMIERE TECHNOLOGIES, INC., 3399 PEACHTREE ROAD, N.E.,
THE LENOX BUILDING, SUITE 600, ATLANTA, GEORGIA 30326.
By Order of the Board of Directors,
/s/ Patrick G. Jones
--------------------
Patrick G. Jones
Corporate Secretary
Atlanta, Georgia
July 7, 1998
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PROXY
PREMIERE TECHNOLOGIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Boland T. Jones and Patrick G. Jones, each
with full power of substitution, acting jointly or by any of them if only one
be present and acting, attorneys and proxies to vote in the manner specified
below (according to the number of shares which the undersigned would be
entitled to cast if then personally present), all the shares of common stock,
par value $.01 per share, or all the Series B voting preferred stock, par value
$.01 per share, of Premiere Technologies, Inc. held of record by the
undersigned at the close of business on May 20, 1998 at the Annual Meeting of
Shareholders to be held at 9:00 a.m., local time, on July 29, 1998, at the JW
Marriott Hotel at Lenox, 3300 Lenox Road, N.E., Atlanta, Georgia, 30326
including any adjournments thereof.
1.Election of the following nominees to serve as Class I directors for terms
expiring at the annual meeting of shareholders in 2001:
Nominees: Jeffrey A. Allred and William P. Payne
FOR nominees listed above [_] WITHHOLD authority to vote [_] for
nominees listed above
(Instruction: To withhold authority
to vote for any individual nominee,
write the nominee's name in the
space provided below)
_________________________
2.In their discretion, to vote upon such other business as may properly come
before the meeting.
