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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 22, 1998
REGISTRATION NO. 333-50003
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PREMIERE TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
GEORGIA 59-3074176
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) NUMBER)
3399 PEACHTREE ROAD, N.E.
LENOX BUILDING, SUITE 600
ATLANTA, GEORGIA 30326
(404) 262-8400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
BOLAND T. JONES
PRESIDENT AND CHIEF EXECUTIVE OFFICER
PREMIERE TECHNOLOGIES, INC.
3399 PEACHTREE ROAD, N.E.
LENOX BUILDING, SUITE 600
ATLANTA, GEORGIA 30326
(404) 262-8400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
THE COMMISSION IS REQUESTED TO SEND COPIES OF ALL COMMUNICATIONS TO:
JOEL J. HUGHEY PATRICK G. JONES
ALSTON & BIRD LLP SENIOR VICE PRESIDENT FINANCE AND
ONE ATLANTIC CENTER LEGAL
1201 WEST PEACHTREE STREET PREMIERE TECHNOLOGIES, INC.
ATLANTA, GEORGIA 30309-3424 3399 PEACHTREE ROAD, N.E.
(404) 881-7000 LENOX BUILDING, SUITE 600
ATLANTA, GEORGIA 30326
(404) 262-8400
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF ANY OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED APRIL 22, 1998
PROSPECTUS
4,595,464 SHARES
PREMIERE TECHNOLOGIES, INC.
COMMON STOCK
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This Prospectus relates to the offering for resale from time to time (the
"Offering") of 4,595,464 shares (the "Shares") of Common Stock, $0.01 par value
per share (the "Common Stock"), of Premiere Technologies, Inc., a Georgia
corporation (the "Company" or "Premiere"). The Shares may be offered from time
to time for the accounts of the selling shareholders named herein (the "Selling
Shareholders") or by pledgees, donees, transferees or other successors in
interest. See "Selling Shareholders." The Selling Shareholders may be deemed to
be "underwriters" within the meaning of the Securities Act of 1933, as amended
(the "Securities Act"). See "Sale of Shares."
All of the Shares were acquired by the Selling Shareholders from the Company
in transactions during April through June, 1997 and in September 1997 in
connection with the acquisitions of (i) Voice-Tel Enterprises, Inc. ("VTE") and
its affiliate Voice-Tel Network Limited Partnership ("VTN") and substantially
all of VTE's franchisees (the "Franchisees") (VTE, VTN and the Franchisees are
collectively referred to as the "Voice-Tel Entities" or "Voice-Tel," and such
acquisitions are referred to collectively as the "Voice-Tel Acquisitions") and
(ii) VoiceCom Holdings, Inc. ("VoiceCom").
The Shares may be sold from time to time by the Selling Shareholders, or by
pledgees, donees, transferees or other successors in interest. Such sales may
be made on the Nasdaq National Market or such other national securities
exchange or automated interdealer quotation system on which shares of Common
Stock are then listed, through negotiated transactions or otherwise at prices
related to the then current market price or in negotiated transactions. The
Shares may be sold by one or more at the following methods: (a) ordinary
brokerage transactions and transactions in which the broker solicits
purchasers; (b) purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this Prospectus; (c) a block trade
in which the broker or dealer so engaged will attempt to sell the Shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction; and (d) through the writing of options on the
Shares. See "Selling Shareholders" and "Sale of Shares."
None of the proceeds from the sale of the Shares by the Selling Shareholders
will be received by the Company. See "Use of Proceeds." The Company has agreed
to bear all expenses in connection with the registration of the Shares being
offered by the Selling Shareholder. The Selling Shareholders will bear the cost
of any brokerage commissions, discounts and other costs associated with respect
to the sale of the Shares. The Company also has agreed to indemnify the Selling
Shareholders against certain liabilities, including liabilities under the
Securities Act. See "Sale of Shares."
The shares of Common Stock of the Company are traded on the Nasdaq National
Market under the symbol "PTEK". On April 21, 1998, the last sales price for the
shares of Common Stock as reported on the Nasdaq National Market was $33 3/8
per share.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 5 FOR INFORMATION THAT SHOULD BE CONSIDERED BY
PROSPECTIVE PURCHASERS.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS APRIL 22, 1998
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements, information statements and other
information with the Securities and Exchange Commission (the "Commission").
Such reports, proxy statements, information statements and other information
may be inspected and copied at the public reference facilities maintained by
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices located at
Seven World Trade Center, Suite 1300, New York, New York 10048 and at the
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material can be obtained from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission also makes electronic filings publicly
available on the Internet within 24 hours of acceptance. Reports, proxy
statements and information statements and other information filed
electronically by the Company with the Commission are available at the
Commission's worldwide web site at http://www.sec.gov. The Company's Common
Stock is quoted on the Nasdaq National Market under the symbol "PTEK."
Reports, proxy statements and information statements and other information
concerning the Company may also be inspected at the Nasdaq Stock Market at
1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed a Registration Statement on Form S-3 under the
Securities Act with the Commission with respect to the Shares offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits thereto. For further information with
respect to the Company and the Shares offered hereby, reference is made to the
Registration Statement and the exhibits thereto. Statements contained in this
Prospectus regarding the contents of any contract or other document to which
reference is made are not necessarily complete, and in each instance reference
is made to the copy of such contract or other document filed as an exhibit to
the Registration Statement, each such statement being qualified in all
respects by such reference. A copy of the Registration Statement and the
exhibits thereto may be inspected without charge at the offices of the
Commission at Judiciary Plaza, 450 Fifth Street, Washington, D.C. 20549, and
copies of all or any part of the Registration Statement may be obtained from
the Public Reference Section of the Commission, Washington, D.C. 20549 upon
the payment of the fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are hereby
incorporated by reference in this Prospectus and made a part hereof:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, as amended by the Company's Form 10-K/A filed with the
Commission on April 22, 1998;
(b) the Company's Current Report on Form 8-K/A filed on January 27, 1998;
(c) the Company's Current Report on Form 8-K dated February 3, 1998 and
filed with the Commission on February 20, 1998;
(d) the Company's Current Report on Form 8-K dated February 27, 1998 and
filed with the Commission on March 13, 1998, as amended by the Company's
current report on Form 8-K/A filed with the Commission on April 13, 1998;
and
(e) the description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, declared effective on March
1, 1996, and any amendment or report filed for the purpose of updating any
such description.
All reports and other documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of this Offering shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of
filing of such reports and documents. Any statement incorporated or deemed to
be incorporated herein shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or
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supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been delivered, upon
written or oral request of such person, a copy of any or all of the foregoing
documents incorporated herein by reference (other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference
into such documents). Requests for such documents should be made orally or in
writing to the attention of Director of Corporate Communications, Premiere
Technologies, Inc., 3399 Peachtree Road, N.E., The Lenox Building, Suite 600,
Atlanta, Georgia 30326, Telephone: (404) 262-8400.
FORWARD LOOKING STATEMENTS
When used in this Prospectus and elsewhere by management or the Company from
time to time, the words "believes," "anticipates," "expects," "will" and
similar expressions are intended to identify forward-looking statements
concerning the Company's operations, economic performance and financial
condition, including in particular, the Company's business strategy and means
to implement the strategy, goals, the amount of capital expenditures, and the
likelihood of the Company's success in developing and expanding its business.
For those statements, the Company claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995. These statements are based on a number of assumptions and
estimates which are inherently subject to significant risks and uncertainties,
many of which are beyond the control of the Company, and reflect future
business decisions which are subject to change. A variety of factors could
cause actual results to differ materially from those anticipated in the
Company's forward-looking statements, including the following factors: (a)
those set forth under the caption "Risk Factors" in this Prospectus and
elsewhere herein; (b) those set forth from time to time in the Company's press
releases and reports and other filings made with the Securities and Exchange
Commission; (c) expected cost savings from the merger (the "Xpedite Merger")
with Xpedite Systems, Inc. ("Xpedite") and any other acquisitions may not be
fully realized or realized within the expected time frame; (d) revenues
following the Xpedite Merger and other acquisitions may be lower than
expected, operating costs or customer loss and business disruption following
the Xpedite Merger and any other acquisitions may be greater than expected;
(e) competitive pressures among enhanced communications services providers may
increase significantly; (f) costs or difficulties related to the integration
of the businesses of Xpedite and Premiere and other businesses, if any, that
may be acquired by Premiere may be greater than expected; (g) general economic
or business conditions, internationally, nationally or in the local
jurisdiction in which Premiere is doing business, may be less favorable than
expected; (h) legislative or regulatory changes may adversely affect the
business in which Premiere is engaged; (i) changes may occur in the securities
markets; and (j) the Company's ability to manage the Company's growth and to
respond to rapid technological change and risk of obsolescence of the
Company's products, services and technology. The Company cautions that such
factors are not exclusive. Consequently, all of the forward-looking statements
made in this Prospectus are qualified by these cautionary statements and
readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company undertakes no
obligation to publicly release the results of any revisions to such forward-
looking statements that may be made to reflect events or circumstances after
the date hereof, or thereof, as the case may be, or to reflect the occurrence
of unanticipated events.
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This Prospectus contains forward-looking statements which involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in the forward-looking statements. Factors that might cause
such a difference include, but are not limited to, those discussed in "Risk
Factors." Unless otherwise indicated, the terms "Premiere" and the "Company"
refer collectively to Premiere Technologies, Inc. and its subsidiaries.
THE COMPANY
Premiere Technologies, Inc. ("Premiere" or the "Company") is a leading
provider of enhanced communications services. The Company's services include
800-based services, voice messaging, enhanced document distribution (including
e-mail and fax), conference calling and, beginning in mid-1998, Internet-based
communication services. The Company's goal is to become a single source
provider of an integrated suite of enhanced communication services to
businesses and individuals. By becoming a single source provider of these
services, management believes it can eliminate for its customers the
complexity of managing the rapidly evolving enhanced communication services
environment. The Company's network-based computer telephony technology
integrates these services by providing customers the flexibility of access to
its services through a computer or a telephone. The Company believes that this
multiple access provides users ease and flexibility of use and allows users to
efficiently and economically manage their communications regardless of whether
they are at or away from their home base. Further, the Company's network-based
solution allows its customers to avoid the cost of purchasing and maintaining
potentially costly communications equipment. Although Premiere offers stand-
alone communications services, it targets business and individual users who
have multiple communications devices and a need to integrate them for greater
functionality and convenience.
On February 27, 1998, Premiere acquired Xpedite Systems, Inc. ("Xpedite") in
a merger accounted for as a pooling-of-interests. Xpedite is a worldwide
leader and innovator in the enhanced document distribution business including
fax, e-mail, telex, Internet and mailgram services. Xpedite serves customers
who require high-quality, cost-effective, rapid, and confirmed communications.
Xpedite has developed sophisticated applications in a wide range of industries
that enable customers to deliver common or customized documents to hundreds or
thousands of recipients around the world via fax or electronic mail using
Xpedite's proprietary, private, world-wide document distribution network (the
"Xpedite Network").
Premiere is a Georgia corporation with its principal executive offices
located at 3399 Peachtree Road, N.E., Lenox Building, Suite 600, Atlanta,
Georgia 30326, and its telephone number is (404) 262-8400. For additional
information regarding Premiere and its business, see "Available Information"
and "Incorporation of Certain Documents by Reference."
This Prospectus includes product names, trade names, service marks and
trademarks of Premiere and its subsidiaries and other companies including,
without limitation, Premiere WorldLink, Orchestrate SM, Voice-Tel(TM),
VoiceCom(TM) and VoiceCom AccessOne SM.
RECENT DEVELOPMENTS
Mr. Eduard J. Mayer resigned as a director of the Company on April 16, 1998.
As of the date of this Prospectus, the Company's Board of Directors is
composed of Messrs. Boland T. Jones, George W. Baker, Sr., Raymond H. Pirtle,
Jr., and Roy B. Andersen, Jr.
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RISK FACTORS
Prospective purchasers of the Shares should carefully consider the risk
factors set forth below, as well as the other information contained in this
Prospectus, in evaluating an investment in the Shares. This Prospectus and the
documents incorporated herein contain certain forward-looking statements which
are inherently uncertain. The Company's actual results could differ materially
from those anticipated in these forward-looking statements as a result of
certain factors, including those set forth below and elsewhere in this
Prospectus and in the Company's reports and other filings with the Commission.
Ability to Manage Growth; Acquisition Risks. Premiere continually evaluates
acquisition opportunities and, as a result, frequently engages in acquisition
discussions, conducts due diligence activities in connection with possible
acquisitions, and, where appropriate, engages in acquisition negotiations.
Premiere has experienced substantial growth in revenue and personnel in recent
years, particularly in 1997. A substantial portion of such growth has been
accomplished through acquisitions, including the Voice-Tel Acquisitions, the
acquisition of VoiceCom Holdings, Inc. ("VoiceCom") and the Xpedite Merger.
Premiere's growth has placed significant demands on all aspects of Premiere's
business, including its administrative, technical and financial personnel and
systems. Additional expansion by Premiere, including the Xpedite Merger, may
further strain Premiere's management, financial and other resources. There can
be no assurance that Premiere's systems, procedures, controls and existing
space are or will be adequate to support expansion of Premiere's operations.
Premiere's future operating results will substantially depend on the ability
of its officers and key employees to manage changing business conditions and
to implement and improve its administrative, technical and financial control
and reporting systems. If Premiere is unable to respond to and manage changing
business conditions, then the quality of Premiere's services, its ability to
retain key personnel and its results of operations could be materially
adversely affected. At certain stages of growth in network usage, Premiere
will be required to add capacity to its computer telephony platform and its
digital central office switches and will need to continually add capacity to
its private frame relay network, thus requiring Premiere continuously to
attempt to predict growth in its network usage and add capacity accordingly.
Difficulties in managing continued growth, including difficulties in
predicting the growth in network usage, could have a material adverse effect
on Premiere's business, financial condition and results of operations.
Acquisitions, including the Xpedite Merger, also involve numerous additional
risks, including difficulties in the assimilation of the operations, services,
products and personnel of the acquired company, the diversion of Premiere's
management's attention from other business concerns, entry into markets in
which Premiere has little or no direct prior experience and the potential loss
of key employees of the acquired company. Premiere is unable to predict
whether or when any prospective acquisition candidate will become available or
the likelihood that any acquisition will be completed.
Future acquisitions by Premiere may result in potentially dilutive issuances
of equity securities, the incurrence of additional debt, the assumption of
known and unknown liabilities, the write-off of software development costs and
the amortization of expenses related to goodwill and other intangible assets,
all of which could have a material adverse effect on Premiere's business,
financial condition and results of operations. For example, the Voice-Tel
Entities and VoiceCom established reserves for certain potential tax
liabilities that Premiere's management believes to be adequate based on
certain assumptions which Premiere's management believes are reasonable. If,
however, such assumptions prove to be incorrect and the potential liabilities
ultimately exceed established reserves, Premiere's business, financial
condition and results of operations could be materially adversely affected.
Premiere has recorded approximately $14.8 million of goodwill and other
intangible assets in connection with the Voice-Tel Acquisitions. Premiere is
amortizing the goodwill on a straight-line basis over 40 years, and Premiere
believes the useful life of the Voice-Tel Entities to be at least 40 years. If
the amortization period is accelerated due to a reevaluation of the useful
life of the Voice-Tel Entities or otherwise, amortization expense may
initially increase on a quarterly basis or require a write-down of the
goodwill. An increase in the rate of amortization of goodwill or future write-
downs and restructuring charges could have a material adverse effect on
Premiere's business, financial condition and results of operations.
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Premiere has taken, and in the future may take, charges in connection with
acquisitions. During the second quarter of 1997, Premiere took a pre-tax
charge of approximately $45.4 million in connection with the Voice-Tel
Acquisitions and during the third quarter of 1997, Premiere took a pre-tax
charge of approximately $28.2 million in connection with the acquisition of
VoiceCom. The Company anticipates that it will record restructuring and other
special charges before income taxes in the range of $50 million in connection
with the Xpedite Merger. Such amount includes charges recorded by Xpedite in
the fourth quarter of 1997 expected by management to be in the range of $20
million before income taxes. Moreover, Premiere may take additional charges in
connection with future acquisitions. There can be no assurance that the costs
and expenses incurred will not exceed the estimates upon which such charges
are based.
In June 1997, Premiere completed the Voice-Tel Acquisitions. Prior to the
Voice-Tel Acquisitions, the Voice-Tel Entities operated approximately 210 POPs
in five countries. VTE operated as a franchisor, and each of the approximately
100 Franchisees was independently owned and operated. Premiere is in the
process of
consolidating these separate businesses by attempting to eliminate duplicative
and unnecessary costs and to operate them under common management. Potential
challenges to the successful consolidation of the Voice-Tel Entities include,
but are not limited to: (i) centralization and consolidation of financial,
operational and administrative functions; (ii) consolidation of the service
centers, network and work force; (iii) elimination of unnecessary costs; and
(iv) realization of economies of scale. Premiere is in the process of
integrating Voice-Tel's service offerings, operations and systems with those
of Premiere, and therefore, the Voice-Tel integration plans may materially
change in the future. Challenges to the successful integration of the Voice-
Tel Entities include, but are not limited to: (i) localization of Premiere
products; (ii) integration of the Premiere platform with the Voice-Tel
network; (iii) cross-selling of products and services to the customer base of
Voice-Tel and Premiere; (iv) integration of new personnel; and (v) compliance
with regulatory requirements.
Because of the size and fragmented nature of the facilities and businesses
of the Voice-Tel Entities and the technical complexity of integrating
Premiere's products with those of Voice-Tel, the integration process is
particularly complex and will place significant demands on Premiere's
management, engineering, financial and other resources. There can be no
assurance that the Voice-Tel Entities will be successfully consolidated or
integrated with Premiere's operations on schedule or at all, that the Voice-
Tel Acquisitions will result in sufficient net sales or earnings to justify
Premiere's investment therein or the expenses related thereto, or that
operational synergies will develop. The successful consolidation of the Voice-
Tel Entities and their integration into Premiere's operations are critical to
Premiere's future performance. Failure to successfully consolidate and
integrate the Voice-Tel Entities or to achieve operating synergies would have
a material adverse effect on Premiere's business, financial condition and
results of operations.
Competition. The market for the Company's services is intensely competitive,
rapidly evolving and subject to rapid technological change. The Company
expects competition to increase in the future. Many of the Company's current
and potential competitors have longer operating histories, greater name
recognition, larger customer bases and substantially greater financial,
personnel, marketing, engineering, technical and other resources than the
Company. The Company believes that existing competitors are likely to expand
their service offerings and that new competitors are likely to enter the
personal communications market and to attempt to integrate such services,
resulting in greater competition for the Company. Such competition could have
a material adverse effect on the Company's business, financial condition and
results of operations.
The Company attempts to differentiate itself from its competitors by
offering an integrated suite of enhanced personal communications services.
Other providers currently offer each of the individual services and certain
combinations of the services offered by the Company. The Company's worldwide
mobile communications services and features compete with services provided by
companies such as AT&T Corp. ("AT&T"), MCI Communications Corp. ("MCI") and
Sprint Corp. ("Sprint") as well as smaller interexchange long distance
providers. The Company's voice mail services, including those acquired in the
Voice-Tel Acquisitions and the VoiceCom acquisition, compete with voice mail
services provided by AT&T, certain regional Bell Operating Companies ("RBOCs")
and other service bureaus as well as by equipment manufacturers, such as Octel
Communications Corporation ("Octel"), Northern Telecom, Inc. ("Northern
Telecom"), Siemens Business Communications Systems, Inc. ("Siemens"),
Centigram Communications Corporation ("Centigram"), Boston Technology, Inc.
("Boston Technology") and Digital Sound Corporation ("Digital Sound"). The
Company's
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enhanced travel, concierge, news and e-mail services compete with services
provided by America Online, Inc. ("America Online"), Prodigy Services Co.
("Prodigy") and numerous Internet service providers. The Company's paging
services compete with paging services offered by companies such as AT&T and
MCI.
The Company's Orchestrate service, which the Company anticipates beginning
marketing during the second quarter of 1998, is expected to compete with
products offered by companies such as Octel, Microsoft Corp. ("Microsoft"),
Novell, Inc. ("Novell"), Lucent Technologies, Inc. ("Lucent") and numerous
other entities. For example, Octel and Microsoft recently announced a service,
called "Unified Messenger," which places all voice mail, e-mail and fax
messages in a single mailbox accessible by computer or telephone. In addition,
the number of companies offering call center technology, including AT&T, MCI
and Lucent, has grown dramatically over the past few years, primarily in
response to major outsource initiatives and significantly lower technology
costs.
The Company expects that other parties will develop and implement information
and telecommunications service platforms similar to its platform, thereby
increasing competition for the Company's services.
Through the recently completed Xpedite Merger, Premiere offers enhanced
document distribution services ("Enhanced Services"). Xpedite's fax
communication services currently compete with services provided by each of
AT&T, MCI and Sprint, and many of the national postal, telephone and telegraph
companies ("PTTs") around the world. Neither Premiere nor Xpedite can predict
whether AT&T, MCI, Sprint, any Internet service provider or PTT or any other
competitor will expand its fax communications services business, and there can
be no assurance that these or other competitors will not commence or expand
their businesses. Moreover, Xpedite's receiving, queuing, routing and other
systems logic and architecture are not proprietary to Xpedite, and as a
result, there can be no assurance that such information will not be acquired
or duplicated by Xpedite's existing and potential competitors. Xpedite does
not typically have long-term contractual agreements with its customers, and
there can be no assurance that its customers will continue to transact
business with Premiere in the future. In addition, even if there is continued
growth in the use of electronic document distribution services, there can be
no assurance that potential customers will not elect to use their own
equipment to fulfill their needs for electronic document distribution
services. There also can be no assurance that customers will not elect to use
alternatives to Xpedite's electronic document distribution services, including
the Internet, to carry such customers' communications or that companies
offering such alternatives will not develop product features or pricing which
are more attractive to customers than those currently offered by Xpedite.
Furthermore, on February 8, 1996, President Clinton signed into law the
Telecommunications Act of 1996, as amended (the "1996 Act"), which allows
local exchange carriers ("LECs"), including the RBOCs, to provide long
distance telephone service between Local Access and Transport Areas ("LATAs"),
which will likely significantly increase competition for long distance
services. The new legislation also grants the Federal Communications
Commission (the "FCC") the authority to deregulate other aspects of the
telecommunications industry, which in the future may, if authorized by the
FCC, facilitate the offering of an integrated suite of information and
telecommunications services by regulated entities, including the RBOCs, in
competition with the Company. Such increased competition could have a material
adverse effect on the Company's business, financial condition and results of
operations.
Telecommunications companies compete for consumers based on price, with
major long distance carriers conducting extensive advertising campaigns to
capture market share. There can be no assurance that a decrease in the rates
charged for communications services by the major long distance carriers or
other competitors, whether caused by general competitive pressures or the
entry of the RBOCs and other LECs into the long distance market, would not
have a material adverse effect on the Company's business, financial condition
and results of operations.
The Company expects that the information and telecommunications services
markets will continue to attract new competitors and new technologies,
possibly including alternative technologies that are more sophisticated and
cost effective than the technology of the Company. The Company does not have
the contractual right to prevent its Premiere WorldLink subscribers from
changing to a competing network, and the Company's subscribers may generally
terminate their service with the Company at will.
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Dependence on Key Management and Personnel. The Company's success is largely
dependent upon its executive officers and other key personnel, the loss of one
or more of whom could have a material adverse effect on the Company. The
Company believes that its continued success will depend to a significant
extent upon the efforts and abilities of Boland T. Jones, Chairman and
President, and certain other key executives. Mr. Jones has entered into an
employment agreement with the Company which expires in December 1999, and the
Company maintains key man life insurance on Mr. Jones in the amount of $3.0
million. During the fourth quarter of 1997, D. Gregory Smith, a co-founder of
the Company, resigned as a director, Executive Vice President and Assistant
Secretary of the Company and as a director and officer of PCI and certain
other subsidiaries, and Leonard A. DeNittis resigned as the Vice President of
Engineering and Operations of PCI.
The Company also believes that to be successful it must hire and retain
highly qualified engineering and product development personnel. Competition in
the recruitment of highly qualified personnel in the information and
telecommunications services industry is intense. The inability of the Company
to locate, hire and retain such personnel may have a material adverse effect
on the Company. No assurance can be given that the Company will be able to
retain its key employees or that it will be able to attract qualified
personnel in the future.
Reliance on Amway and Certain other Relationships. Historically, the Voice-
Tel Entities have relied on sales through Amway Corporation ("Amway") for a
substantial portion of their revenue. Such sales accounted for approximately
27.5%, 23.7% and 17.5% of the Company's revenue (excluding Xpedite's revenue
for such periods) for 1995, 1996 and 1997, respectively. Amway's relationship
with VTE commenced in 1990 when VTE began managing the voice messaging
operations previously conducted by Amway's subsidiary, Amvox, Inc. ("Amvox").
VTE subsequently acquired and franchised the former Amvox service centers from
Amway in exchange for an equity interest in VTE. Amway later invested in the
development of the private frame relay digital messaging network through VTN.
As a result of these transactions, Amway also became the single largest equity
holder in VTE and VTN. VTE and Amway have entered into a service and reseller
agreement (the "Amway Agreement") providing, among other things, for the sale
by VTE of voice messaging and network transmission services on an exclusive
basis to Amway in the United States, Canada, New Zealand and Australia for
resale by Amway to its independent distributors under the "Amvox" tradename.
The Amway Agreement does not bind the Amway distributors, who are free to
acquire messaging services from alternative vendors. The Amway Agreement may
be canceled by either party upon 180 days prior written notice or upon shorter
notice in the event of a breach. The Amway Agreement does not prohibit VTE
from continuing to provide voice messaging and network transmission services
to Amway's distributors following termination of the Amway Agreement. However,
in the event that Amway recommended a voice messaging and network transmission
services provider other than the Company, there can be no assurance that
Amway's distributors would not follow such recommendation. Amway sold a
significant portion of the Common Stock that it acquired in the Voice-Tel
Acquisitions in an offering pursuant to a demand registration by certain
former owners of the Voice-Tel Entities. Such sale decreased Amway's interest
in the Company and may increase the possibility that Amway will recommend a
voice messaging and network transmission services provider other than the
Company. There can be no assurance that the Company's relationship with Amway
and the Amway distributors will continue at historical levels or at all, nor
can there be any assurance of long-term price protection for services provided
to Amway. Loss or diminution in the Amway relationship, or a decrease in
average sales price without an offsetting increase in volume, could have a
material adverse effect on the Company's business, financial condition and
results of operations.
In September 1997, Premiere entered into an agreement with Digitec 2000,
Inc. ("Digitec") pursuant to which Digitec will act as a distributor to market
and sell prepaid telephone cards. Under the terms of such agreement, Digitec
agreed, starting January 1, 1998, to sell cards with a minimum retail value
each month. In the event that Digitec has not sold all of the cards by August
31, 1998, Digitec will be obligated to pay Premiere an amount equal to the
retail value of the unsold cards less commissions that would have been payable
on such cards. Digitec is not currently selling the monthly minimum amount and
no assurance can be given that Digitec will be able to sell the amount of
cards that it is obligated to sell under the terms of such agreement. In the
event that Digitec is unable to do so, the Company believes that it is
unlikely that Digitec would have the financial resources available to it to
make the payment required on August 31, 1998 under such agreement.
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Technological Change; Risk of Obsolescence; Dependence on New Services. The
market for the Company's services is characterized by rapid technological
change, frequent new product introductions and evolving industry standards.
The Company's future success will depend in significant part on its ability to
anticipate industry standards, continue to apply advances in technologies,
enhance its current services, develop and introduce new services in a timely
fashion, enhance its software and its computer telephony platform and compete
successfully with products and services based on evolving or new technologies.
The Company expects new products and services, and enhancements to existing
products and services, to be developed and introduced which will compete with
the services offered by the Company. Among the new and evolving technologies
with which the Company expects to compete are notebook computers equipped with
sound cards, fax modems and
cellular modems, portable Internet appliances which would allow connection to
the Internet over wireless networks and personal digital assistants with
enhanced communications features. In addition, aspects of the Company's
Orchestrate product line, which has been marketed to customers during the
first quarter of 1998, is expected to compete within markets where larger
companies are working to provide a unified messaging solution. The Company is
also aware that products currently exist which provide text-to-voice e-mail
conversion and "call connect/call screening" services.
Through the recently completed Xpedite Merger, Premiere offers Enhanced
Services. See "--Risks Associated with Expansion of Enhanced Document
Distribution Services." Technological advances may result in the availability
of new services, products or methods of electronic document delivery that
could compete with the electronic document distribution services currently
provided by Premiere and Xpedite or decrease the cost of existing products or
services which could enable Premiere's and/or Xpedite's established or
potential customers to meet their own needs for electronic document
distribution services more cost efficiently than through the use of Premiere
or Xpedite or in the future through the use of the combined company's
services. In addition, Premiere may experience difficulty integrating
incompatible systems of acquired businesses into its network. There can be no
assurance that Premiere will not be materially adversely affected in the event
of such technological change or difficulty, or that changes in technology will
not enable additional companies to offer services which could replace, or be
more cost-effective than, some or all of the services offered now by Premiere
or Xpedite or in the future by the combined company.
The Voice-Tel Acquisitions constitute a significant investment by the
Company in a private frame relay network architecture. Alternative
architectures currently exist, and technological advances may result in the
development of additional network architectures. There can be no assurance
that the telecommunications industry will not standardize on a protocol other
than frame relay or that the Company's frame relay architecture will not
become obsolete. Such events would require the Company to invest significant
capital in upgrading or replacing its private frame relay network and could
have a material adverse effect on the Company's business, financial condition
and results of operations.
The Company must continually introduce new products in response to evolving
industry standards and customer demands for enhancements to the Company's
existing products. One such new product is Orchestrate, which is operational
and has been available in limited release. The Company anticipates commencing
marketing of the Orchestrate product during the second quarter of 1998. The
Company believes that its competitors have not yet developed a publicly
available network-based product which incorporates all of the functionalities
of Orchestrate, although the Company's competitors have developed products
which the Company believes offer some, but not all, of the bundled services
offered through Orchestrate . There can be no assurance that: (i) the Company
will be successful in developing and marketing service enhancements or new
services that respond to these or other technological changes or evolving
industry standards; (ii) the Company will not experience difficulties that
could delay or prevent the successful development, introduction and marketing
of its services, including Orchestrate; or (iii) its new services and the
enhancements thereto, including Orchestrate, will adequately meet the
requirements of the marketplace and achieve market acceptance. Delays in the
introduction of new services, the inability of the Company to develop such new
services or the failure of such services to achieve market acceptance could
have a material adverse effect on the Company's business, financial condition
and results of operations.
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Uncertainty of Market Acceptance of Computer Telephony. The Company's future
success depends upon the market acceptance of its existing and future computer
telephony product lines and services. Computer telephony integrates the
functionality of telephones and computers and thus represents a departure from
standards for information and telecommunications services. Market acceptance
of computer telephony products and services generally requires that
individuals and enterprises accept a new way of exchanging information. The
Company believes that broad market acceptance of its computer telephony
product lines and services will depend on several factors, including ease of
use, price, reliability, access and quality of service, system security,
product functionality and the effectiveness of strategic marketing and
distribution relationships. There can be no assurance that the Company's
computer telephony products and services will achieve broad market acceptance
or that such market acceptance will occur at the rate which the Company
currently anticipates. A decline in the demand for, or the failure to achieve
broad market acceptance of, the Company's computer telephony product lines and
services would have a material adverse effect on the Company's business,
financial condition and results of operations.
Limited Protection of Proprietary Rights and Technology. The Company relies
primarily on a combination of intellectual property laws and contractual
provisions to protect its proprietary rights and technology. These laws and
contractual provisions provide only limited protection of the Company's
proprietary rights and technology. The Company's proprietary rights and
technology include confidential information and trade secrets which the
Company attempts to protect through confidentiality and nondisclosure
provisions in its licensing, services, reseller and distribution agreements.
The Company typically attempts to protect its confidential information and
trade secrets through these contractual provisions for the term of the
applicable agreement and, to the extent permitted by applicable law, for some
negotiated period of time following termination of the agreement, typically
one to two years at a minimum. Although the Company is not aware of any
current or previous infringement of its proprietary rights and technology,
there can be no assurance that the Company's means of protecting its
proprietary rights and technology will be adequate or that the Company's
competitors will not independently develop similar technology. In addition,
the laws of some foreign countries do not protect the Company's proprietary
rights to as great an extent as the laws of the U.S.
Risks of Infringement Claims. Many patents, copyrights and trademarks have
been issued in the general areas of information and telecommunications
services and computer telephony. The Company believes that in the ordinary
course of its business third parties will claim that the Company's current or
future products or services infringe the patent, copyright or trademark rights
of such third parties. No assurance can be given that actions or claims
alleging patent, copyright or trademark infringement will not be brought
against the Company with respect to current or future products or services, or
that, if such actions or claims are brought, the Company will ultimately
prevail. Any such claiming parties may have significantly greater resources
than the Company to pursue litigation of such claims. Any such claims, whether
with or without merit, could be time consuming, result in costly litigation,
cause delays in introducing new or improved products and services, require the
Company to enter into royalty or licensing agreements, or cause the Company to
discontinue use of the challenged technology, tradename or service mark at
potentially significant expense to the Company associated with the marketing
of a new name or the development or purchase of replacement technology, all of
which could have a material adverse effect on the Company's business,
financial condition and results of operations.
The Company is aware of other companies that use the terms "WorldLink" or
"Premiere" in describing their products and services, including
telecommunications products and services. Certain of those companies hold
registered trademarks which incorporate the names "WorldLink" or "Premiere."
The Company has received correspondence from a provider of prepaid calling
cards which claims that the Company's use of the term "WorldLink" infringes
upon its trademark rights. In addition, the Company has received
correspondence from a major bank, which is among the holders of registered
trademarks incorporating the term "WorldLink," inquiring as to the nature of
the Company's use of the term "WorldLink" as part of its mark "Premiere
WorldLink." Based on, among other things, the types of businesses in which the
other companies are engaged and the low likelihood of confusion, the Company
believes these claims to be without merit.
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In October 1996, VTE received a letter from a third party claiming that
certain aspects of VTE's products and services may be infringing upon one or
more of the third party's patents. The Company has reviewed the patent claims
of the third party and does not believe that the Company's products or
services infringe on the claims of the third party. No patent infringement
claims against the Company have been filed by the third party at this time.
Should the third party file patent infringement claims against the Company,
the Company believes that it would have meritorious defenses to any such
claims. However, due to the inherent uncertainties of litigation, the Company
is unable to predict the outcome of any potential litigation with the third
party, and any adverse outcome could have a material adverse effect on the
Company's business, results of operations or financial condition. Even if the
Company were to ultimately prevail, the Company's business could be adversely
affected by the diversion of management attention and litigation costs.
Because of this risk, the Company
withheld in escrow approximately 123,000 shares of Common Stock from the
purchase price of VTE and VTN. This escrow arrangement terminates in April
2000. There can be no assurance that such escrow will be sufficient to fully
cover the Company's exposure in the event of litigation or an adverse outcome
to the potential infringement claims.
In May 1997, Premiere received a letter from a manufacturer and marketer of
certain telecommunications equipment asserting that Premiere is offering
certain "calling card and related enhanced services," "single number service"
and "call connecting services" covered by three patents held by that company
and inviting Premiere to obtain a license. Premiere has preliminarily reviewed
the subject patents and, based on that review, presently believes that its
products and services currently being marketed do not infringe these patents.
Premiere intends, however, to conduct a further review of these patents in
order to determine whether it would be helpful to its future products and
services to license the patents. If Premiere ultimately determines that it is
infringing these patents, or any one of them, it could seek to license the
technology or discontinue using it and employ an alternate technology. There
can be no assurance that Premiere would be able to license the technology on
commercially reasonable terms or that it could easily and inexpensively
migrate to a new call reorigination technology. Premiere's call reorigination
service is only one service that it offers, and management does not believe
that this service is critical to the marketing of Premiere's overall suite of
services. Consequently, Premiere does not believe that its inability to
license the technology or migrate to a new technology would have a material
adverse effect on its business, financial condition and results of operations.
No claim has been asserted beyond this letter, but no assurance can be given
that the third party will not commerce an infringement action against
Premiere. If a patent infringement claim is brought against Premiere, there
can be no assurance that Premiere would prevail and any adverse outcome could
have a material adverse effect on Premiere's business, financial condition and
results of operations.
In May 1997, the Company received a letter from counsel for a provider of
goods and services in the telecommunications field objecting to the Company's
use of the phrase "personal assistant" based on that company's federally
registered "personal assistant" service mark. On June 18, 1997, counsel for
the Company responded to the objections, noting that the Company did not
intend to use, nor would it use in the future, the words "personal assistant"
as a trademark or service mark, but instead would merely use these words to
describe the nature of its product. The Company has not heard anything further
from the potential claimant and believes that the matter has been resolved.
In July 1997, the Company received a letter from counsel for a French
publishing company objecting to the Company's use of the "Premiere" trademark.
Based on, among other things, the type of business in which the French company
is engaged and the unlikelihood that the Company will engage in competitive
activities using the Premiere mark in France, the Company believes that no
action will be brought. Due to the inherent uncertainties of litigation,
however, the Company is unable to predict the outcome of any potential
litigation with the French company, and any adverse outcome could have a
material effect on the Company's business, financial condition and results of
operations. Even if the Company were to prevail in such a challenge, the
Company's business could be adversely affected by the diversion of management
attention and litigation costs.
In February 1997, the Company entered into a long-term nonexclusive license
agreement with AudioFAX settling a patent infringement suit filed by AudioFAX
in June 1996. In the third quarter of 1996, the Company
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took a one-time charge for the estimated legal fees and other costs that the
Company expected to incur to resolve this matter. In September 1997, VoiceCom
also entered into a long-term nonexclusive license agreement with AudioFAX.
In July 1996, Xpedite received a letter from counsel for AudioFAX, which
informed Xpedite that AudioFAX is the owner of certain U.S. and Canadian
patents relevant to the fax processing business, and inquired as to Xpedite's
interest in obtaining a license to use these patents. The Company and Xpedite
recently entered into agreements with AudioFAX with respect to resolution of
these claims. In the first quarter of 1998, the Company expects to take a one-
time charge of approximately $2.85 million for the estimated settlement costs
and expenses related to resolution of these claims.
Uncertainty of Strategic Relationships. A principal element of the Company's
strategy is the creation and maintenance of strategic relationships that will
enable the Company to offer its services to a larger customer base than the
Company could otherwise reach through its direct marketing efforts. The
Company has experienced growth in its existing strategic relationships during
1996 and 1997 and has entered into or initiated new strategic relationships
with several companies, including WorldCom and American Express. Although the
Company intends to continue to expand its direct marketing channels, the
Company believes that strategic partner relationships may offer a potentially
more effective and efficient marketing channel. Consequently, the Company's
success depends in part on the ultimate success of these relationships and on
the ability of these strategic partners to market the Company's services
effectively. Failure of one or more of the Company's strategic partners to
successfully develop and sustain a market for the Company's services, or the
termination of one or more of the Company's relationships with a strategic
partner, could have a material adverse effect on the Company's overall
performance. The telecommunications industry is experiencing rapid
consolidation. Recently WorldCom, which is a strategic partner of the Company,
entered into an agreement to acquire MCI, which competes with the Company with
respect to certain services. Consolidation in the communications industry,
including consolidations involving the Company's customers and strategic
partners, could have a material adverse effect on the Company's business,
financial condition and results of operations.
In November 1996, the Company entered into a strategic alliance agreement
with WorldCom, whereby WorldCom is required, among other things, to provide
the Company with the right of first opportunity to provide certain enhanced
computer telephony services for a period of at least 25 years. In connection
with this agreement, the Company issued to WorldCom 2,050,000 shares of Common
Stock valued at approximately $25.2 million (based on an independent
appraisal) and paid WorldCom $4.7 million in cash. The Company recorded the
value of this agreement as an intangible asset. While the Company believes
that the intangible asset will be recovered over the life of the agreement,
this recoverability is dependent upon the success of the strategic
relationship. The Company will continually evaluate the realizability of the
intangible asset recorded, and there can be no assurance that future
evaluations will not require a write-down of this asset.
Although the Company views its strategic relationships as a key factor in
its overall business strategy and in the development and commercialization of
its services, there can be no assurance that its strategic partners view their
relationships with the Company as significant for their own businesses or that
they will not reassess their commitment to the Company in the future. The
Company's arrangements with its strategic partners do not always establish
minimum performance requirements for the Company's strategic partners, but
instead rely on the voluntary efforts of these partners in pursuing joint
goals. Certain of these arrangements prevent the Company from entering into
strategic relationships with other companies in the same industry as the
Company's strategic partners, either for specified periods of time or while
the arrangements remain in force. In addition, even when the Company is
without contractual restriction, it may be restrained by business
considerations from pursuing alternative arrangements. The ability of the
Company's strategic partners to incorporate the Company's services into
successful commercial ventures will require the Company, among other things,
to continue to successfully enhance its existing services and develop new
services. The Company's inability to meet the requirements of its strategic
partners or to comply with the terms of its strategic partner arrangements
could result in its strategic partners failing to market the Company's
services, seeking alternative providers of communications and information
services or canceling their contracts with the Company, any of which could
have a material adverse impact on the Company's business, financial condition
and results of operations.
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Dependence on Licensing and Strategic Relationships. The Company has
licensing relationships with companies that have chosen to outsource part or
all of their communications card services to Premiere. License fees accounted
for approximately 7.0% of Premiere's revenues in 1996 and 11.8% of Premiere's
revenues during 1997. One licensee, Communications Network Corporation
("CNC"), accounted for approximately 19.6% of Premiere's 1996 license fees and
approximately 1.4% of the Company's total 1996 revenues. On August 6, 1996,
CNC was placed into bankruptcy under Chapter 11 of the United States
Bankruptcy Code. CNC owed the
Company approximately $627,000 as of December 31, 1996. However, CNC's
transmission provider, WorldCom Network Services, Inc., d/b/a WilTel, is also
obligated to pay this amount to the Company. In addition, WorldCom accounted
for approximately 43.5% of the Company's 1996 license fees and approximately
3.0% of the Company's total 1996 revenues, and approximately 66.8% of the
Company's license fees and 7.8% of the Company's total 1997 revenues. The
Company believes that through a combination of new licensing agreements, the
strategic alliance agreement with WorldCom and increased revenues from
existing licensees, the Company has replaced all of the anticipated CNC
revenue.
The Company intends to increase its number of licensees and its licensee
transaction volume in the future. The Company's success depends in part upon
the ultimate success or failure of its licensees. The telecommunications
industry is intensely competitive and rapidly consolidating. The majority of
companies that have chosen to outsource communications card services to
Premiere are small or medium-sized telecommunications companies that may be
unable to withstand the intense competition in the telecommunications
industry. Licensees that ceased doing business with Premiere due to financial
difficulties contributed in the aggregate approximately $2.9 million of
Premiere's 1996 revenues. Although the Company was able to add new licensees
in 1996 and the first three quarters of 1997, there can be no assurance that
the failure of one or more of the Company's licensees to develop and sustain a
market for the Company's services, or termination of one or more of the
Company's licensing relationships, will not have a material adverse effect on
the Company's business, financial condition and results of operations.
Year 2000 Problem. It is possible that a significant portion of the
Company's currently installed computer systems, software products, billing
systems, telephony platforms, networks, database or other business systems
(hereinafter referred to collectively as "Systems"), or those of the Company's
customers, vendors or resellers, working either alone or in conjunction with
other software or systems, will not accept input of, store, manipulate and
output dates for the years 1999, 2000 or thereafter without error or
interruption (commonly known as the "Year 2000" problem). The Company is
currently in the process of evaluating its Systems to determine whether or not
modifications will be required to prevent problems related to the Year 2000.
There can be no assurance that the Company will identify all such Year 2000
problems in its Systems or those of its customers or vendors, including
network transmission providers, in advance of their occurrence or that the
Company will be able to successfully remedy any problems that are discovered.
In addition, the Company is dependent upon third parties for transmission of
its calls and other communications. There can be no assurance that these third
party providers will identify and remedy any Year 2000 problems in their
transmission facilities. The expenses of the Company's efforts to identify and
address such problems, the expenses or liabilities to which the Company may be
subject as a result of such problems, or the failure of third party providers
of transmission facilities, could have a material adverse effect on the
Company's business, financial condition and results of operations. The
financial stability of existing customers may be adversely impacted by Year
2000 problems which could have a material adverse impact on the Company's
revenues. In addition, failure of the Company to identify and remedy Year 2000
problems could put the Company at a competitive disadvantage relative to
companies that have corrected Year 2000 problems.
Risks of Leverage. In connection with the issuance of its convertible notes
to the public on June 30 and July 30, 1997 (the "Convertible Notes"), Premiere
incurred $172.5 million in indebtedness. As a result of this increased
leverage, Premiere's principal and interest obligations have increased
substantially. The degree to which Premiere is leveraged could adversely
affect Premiere's ability to obtain additional financing for working capital,
acquisitions or other purposes and could make it more vulnerable to economic
downturns and competitive pressures. Premiere's increased leverage could also
adversely affect its liquidity, as a substantial
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portion of available cash from operations may have to be applied to meet debt
service requirements, and in the event of a cash shortfall, Premiere could be
forced to reduce other expenditures and forego potential acquisitions to be
able to meet such requirements. The indenture related to the Convertible Notes
does not contain any financial covenants or any other agreements restricting
the payments of dividends, the repurchase of securities of Premiere, the
issuance of additional equity or the incurrence of additional indebtedness. In
December 1997, Xpedite entered into a credit agreement with certain banks
which provides a $150 million revolving credit facility, a $70 million portion
of which is available for pound sterling borrowings. All borrowing under this
Credit Agreement become due and payable on December 16, 1998. Substantially
all of the assets of Xpedite collateralize the revolving credit facility. The
credit agreement also contains certain financial covenant provisions.
Management is currently evaluating the Company's options regarding refinancing
this indebtedness which could result in increased leverage and greater
restrictions on the Company's activities due to financial covenants and other
similar restrictions.
Shares Eligible for Future Sale; Registration Rights. As of March 26, 1998,
the Company had approximately 45,260,000 shares of Common Stock outstanding
(including 329,840 Exchangeable Non-Voting Shares of Voice-Tel of Canada Ltd.,
a subsidiary of the Company (the "Exchangeable Shares"), which are convertible
at any time into a like number of shares of Common Stock) and approximately
10,984,000 shares issued or issuable in connection with the Xpedite Merger. Of
these shares, approximately 31,348,000 shares of Common Stock are freely
transferable without restriction or limitation under the Securities Act. The
remaining shares (approximately 13,912,000 shares) are "restricted securities"
("the Restricted Shares") within the meaning of Rule 144 ("Rule 144") adopted
under the Securities Act. Approximately 7,032,000 Restricted Shares are
immediately eligible for sale in the public market pursuant to Rule 144.
Beginning on April 30, 1998 and September 30, 1998, approximately 6,434,000
additional shares and approximately 446,000 additional shares, respectively,
will be eligible for sale pursuant to Rule 144, subject to the volume, manner
of sale and notice requirements of Rule 144. The Company is aware that Mr. D.
Gregory Smith, the beneficial owner of approximately 1.8 million shares,
executed a letter agreement with a third party broker that restricts his
ability to sell or offer for sale any shares of Common Stock of Premiere until
December 5, 1998 without the consent of the third party. There can be no
assurance such third party will not give its consent to the sale of shares of
Common Stock by Mr. Smith or will enforce its rights under such agreement.
As of December 31, 1997 options and warrants to purchase an aggregate of
approximately 7,413,000 shares of Common Stock were outstanding, of which
options and warrants to purchase approximately 3,302,000 shares of Common
Stock are vested and immediately exercisable. Substantially all of the shares
issuable upon the exercise of outstanding options and warrants will be
eligible for immediate resale, if and when issued, under Rule 701 adopted
under the Securities Act or pursuant to Registration Statements on Form S-8.
In addition, an aggregate of approximately 543,000 shares of Common Stock are
issuable upon the exercise of options and warrants previously granted by
Xpedite and converted into the right to acquire Premiere Common Stock in the
Merger. The Company intends to file a Registration on Form S-8 to register the
share issuable upon the exercise of the options and warrants assumed in the
Merger.
The Convertible Notes are convertible into a maximum of approximately
3,227,000 shares of Common Stock at any time prior to final maturity at a
conversion price of $33.00 per share, subject to adjustment. The Convertible
Notes and the Common Stock issuable upon conversion of the Convertible Notes
are currently registered for resale under the Securities Act and may be resold
pursuant to such registration statement.
Excluding certain holders of shares of Common Stock issued in connection
with the Xpedite Merger discussed below, the holders of approximately
10,641,494 shares of Common Stock and their permitted transferees are entitled
to certain rights with respect to the registration of such shares under the
Securities Act.
Prior to the Company's initial public offering in March 1996, the Company
granted certain registration rights to holders of convertible preferred stock
and warrants. Although these contractual rights remain in force, the shares
subject to such registration rights may be freely disposed of pursuant to Rule
144 under the Securities Act.
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Subsequent to the Company's initial public offering, the Company has granted
registration rights in connection with the Company's execution of a strategic
alliance agreement with WorldCom, and the Company's acquisitions of TeleT
Communications, LLC ("TeleT"), the Voice-Tel Entities and VoiceCom. In each of
these instances, the Company is required to notify the holders of the
Company's intent to register any of its Common Stock under the Securities Act
and allow such holders an opportunity to include their shares of Common Stock
in the Company's registration; provided, however, that (i) with respect to
WorldCom such notice must be given only if the Company intends to register and
sell newly issued shares; (ii) with respect to CMG@Ventures, L.P. ("CMG"),
such notice must be given only if 20% of the shares held by CMG remain
outstanding; and (iii) with respect to the former owners of the Voice-Tel
Entities, such notice must be given only until April 30, 1998. These
registration rights are subject to certain limitations and restrictions,
including the right of the underwriters of an underwritten offering to limit
the number of shares offered in such registration if such underwriter
determines that the number of shares requested to be registered cannot be
underwritten.
WorldCom has a one-time right to require the Company to file a registration
statement under the Securities Act, provided that such request is made: (i)
between November 13, 1998 and November 13, 1999; or (ii) within 60 days from
the date of a change in control of Premiere, the termination of Boland T.
Jones as an executive officer or the termination of the strategic alliance
agreement with WorldCom if the events described in clause (ii) occur prior to
November 13, 1999. In addition, the registration must be with respect to such
minimum number of shares of Common Stock having an aggregate proposed offering
price equal to $10.0 million.
With respect to the former owners of the Voice-Tel Entities, the Company
agreed to file a shelf registration statement (the "Voice-Tel Shelf") as soon
as practicable following December 15, 1997 to include any shares of Common
Stock then held by the former owners of the Voice-Tel Entities. The Company
exercised certain contractual rights to postpone this requirement for up to 90
days. In addition, the Company agreed to file a shelf registration statement
for the former holders of VoiceCom within 30 days after the filing of the
Company's Annual Report on Form 10-K, and use reasonable commercial efforts to
have the registration statement declared effective as soon as practicable
thereafter. The shares offered hereby are registered pursuant to these
contractual rights.
The shares of Premiere Common Stock issued in connection with the Xpedite
Merger were registered under the Securities Act and, unless issued to
affiliates of Xpedite as of the date of the Xpedite stockholders meeting to
consider the Xpedite Merger, are freely transferable without restriction or
limitation under the Securities Act.
For a period of three months commencing 30 days after financial results
covering at least 30 days of combined operations of Premiere and Xpedite have
been published, each person who is precluded by the Securities Act from
selling or disposing of all of their shares of Premiere Common Stock received
in the Xpedite Merger within one calendar quarter (a "Large Stockholder") will
have a one-time right to require Premiere to file a registration statement
under the Securities Act relating to all or part of their registrable
securities (an "Xpedite Demand Registration"). Premiere is obligated to use
its commercially reasonable efforts to effect an Xpedite Demand Registration
as soon as reasonably practical after the request is made, except that
Premiere has the right, under certain circumstances, to delay the effective
date of a registration statement or any sales thereunder for a period not to
exceed 120 days from the date of the request for registration. In addition,
Premiere is not obligated to effect an Xpedite Demand Registration (i) for
less than one million shares or (ii) within three months of a Large
Stockholder selling any registrable securities pursuant to an Xpedite
Piggyback Registration (defined below). Unless Premiere shall otherwise
consent, any offering pursuant to an Xpedite Demand Registration shall be
underwritten and Premiere shall select the underwriters and any additional
investment bankers to be used.
If Premiere proposes to file a registration statement under the Securities
Act with respect to an offering for Premiere's own account (other than for
offerings pursuant to certain acquisitions or employee benefit plans, non-
underwritten offerings or offerings of certain convertible securities), or for
the account of any holders of Premiere Common Stock other than the Large
Stockholders (other than for non-underwritten offerings), any Large
Stockholder may request registration under the Securities Act of all or part
of its Registrable Securities on the
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same terms and conditions as Premiere or such other holders of Premiere Common
Stock (an "Xpedite Piggyback Registration"). In the case of an Xpedite
Piggyback Registration, Premiere has the right to terminate or withdraw any
registration undertaken by it prior to the effectiveness of such registration
whether or not any Large Stockholder has elected to include registrable
securities in such registration.
No prediction can be made as to the effect, if any, that the availability of
additional shares for sale will have on the market prices of the Common Stock
prevailing from time to time. Nevertheless, sales of substantial amounts of
the Common Stock in the public market could adversely affect prevailing market
prices of the Common Stock and the ability of the Company to raise equity
capital in the future.
Potential Adverse Impact of Pending Litigation. In the ordinary course of
its business, the Company is subject to claims and litigation from third
parties alleging that the Company's products and services infringe the
patents, trademarks and copyrights of such third parties. See "--Risk of
Infringement Claims." The Company has several litigation matters pending not
involving infringement claims, as described below, which the Company is
defending vigorously. Due to the inherent uncertainties of the litigation
process and the judicial system, the Company is unable to predict the outcome
of such litigation matters. If the outcome of one or more of such matters is
adverse to the Company, it could have a material adverse effect on the
Company's business, financial condition and results of operations.
On January 21, 1997, Eric Bott, E.B. Elliott and Cost Recovery Systems, Inc.
("CRS") filed a complaint against the Company, PCI and the Company's
president, Boland T. Jones, in the Superior Court of Fulton County, Georgia
("Civil Action"). As of December 2, 1997, the Company, PCI and Mr. Jones
entered into a settlement agreement with Mr. Bott which settled and disposed
of Mr. Bott's claims in connection with this litigation. On December 12, 1997,
Mr. Elliott and CRS filed a Second Amended Complaint against Premiere and
Boland T. Jones in the Civil Action. The first count seeks an accounting of
commissions that Mr. Elliott and CRS allege may be due to them under a sales
commission agreement between CRS and Premiere. The second count seeks options
for 72,000 shares of Premiere Common Stock that Mr. Elliott and CRS claim are
due to them, or damages in the alternative. The third count seeks to recover
the Plaintiffs' reasonable attorneys' fees. In the Second Amended Complaint,
the remaining plaintiffs have dropped their prior request for punitive
damages. The Company believes it has meritorious defenses to Mr. Elliott's and
CRS' remaining allegations, but due to the inherent uncertainties of the
litigation process, the Company is unable to predict the outcome of this
litigation. If the outcome of this litigation is adverse to the Company, it
could have a material adverse effect on the Company's business, financial
condition and results of operations. The settlement with Mr. Bott will not
have a material adverse effect on the Company's business, financial condition
or results of operations.
On August 6, 1996, CNC, a licensing customer of the Company, was placed into
bankruptcy (the "Bankruptcy Case") under Chapter 11 of the United States
Bankruptcy Code (the "Bankruptcy Code"). On August 23, 1996, CNC filed a
motion to intervene in a separate lawsuit brought by a CNC creditor in the
United States District Court for the Southern District of New York against
certain guarantors of CNC's obligations and to file a third-party action
against numerous entities, including such CNC creditor and PCI for alleged
negligent misrepresentations of fact in connection with an alleged fraudulent
scheme designed to damage CNC (the "Intervention Suit"). The District Court
has denied CNC's requests to intervene and to file a third party action and
has transferred the remainder of the Intervention Suit to the Bankruptcy Case.
Based upon the bankruptcy examiner's findings and the subsequently appointed
bankruptcy trustee's investigation of potential actions directed at PCI,
including an avoidable preference claim under the Bankruptcy Code of an amount
up to approximately $950,000, the bankruptcy trustee (the "Trustee") and PCI
have reached a tentative settlement on all issues between the parties, subject
to Bankruptcy Court approval. The terms of the proposed settlement have been
incorporated into a proposed plan of reorganization (the "Plan") filed by the
Trustee with the Bankruptcy Court, which is also subject to Bankruptcy Court
approval. Based upon hearings before the Bankruptcy Court, the Trustee filed
on November 18, 1997, a motion requesting approval of the settlement to
accompany the Plan. If only the settlement is approved, PCI will obtain a
release from the Trustee and the Trustee will dismiss the Intervention Suit in
consideration of PCI making a cash payment of $1,200,000 to the Trustee. If
the Plan is subsequently approved by the Court, PCI will make an additional
cash payment of up to $300,000 to the Trustee
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in consideration of PCI obtaining certain allowed subordinated claims and the
Court granting an injunction in Premiere's favor against possible nuisance
suits relating to the CNC business. The Company has previously established a
reserve for the settlement and Plan payments. If the outcome of this matter is
adverse to PCI, the settlement is not approved and the Trustee successfully
pursues possible litigation against the Company, it could have a material
adverse effect on the Company's business, operating results or financial
condition.
On November 26, 1997, Wael Al-Khatib ("Al-Khatib"), the sole shareholder and
former president of CNC, and his company, Platinum Network, Corp. ("Platinum")
(Al-Khatib and Platinum are collectively referred to herein as "Plaintiffs"),
filed a complaint against PCI, WorldCom Network Services, Inc. f/k/a WilTel,
Inc., Bernard J. Ebbers, David F. Meyers, Robert Vetera, Joseph Cusick,
William Trower, Don Wilmouth, Digital Communications of America, Inc., Boland
Jones, Patrick Jones, and John Does I-XX (the "Defendants") in the United
States District Court for the Eastern District of New York (the "Al-Khatib
lawsuit"). Plaintiffs contend that, during 1996, PCI, certain officers of PCI
and the other Defendants engaged in a fraudulent scheme to restrain trade in
the debit card market nationally and in the New York debit card sub-market and
made misrepresentations of fact in connection with the scheme. The Plaintiffs
are seeking at least $250 million in compensatory damages and $500 million in
punitive damages from PCI and the other Defendants. Pursuant to the local
rules of the District Court, PCI has filed a letter stating the reaons it
believes the lawsuit should be dismissed. PCI believes that it has meritorious
defenses to the Plaintiffs' allegations and will vigorously defend the same.
Due to the inherent uncertainties of the judicial system, the Company is not
able to predict the outcome of the Al-Khatib lawsuit. If the Al-Khatib lawsuit
is not resolved in the Company's favor, it could have a material adverse
effect on the Company's business, financial condition and results of
operations.
On July 8, 1997, various limited partners purporting to act on behalf of
Telentry Research Limited Partnership, Telentry Development Limited
Partnership, Telentry XL Limited Partnership, Telentry Research Limited
Partnership II and Telentry Development Limited Partnership II (collectively,
the "Telentry Partnerships") filed a complaint in the Superior Court of New
Jersey for Morris County against Xpedite and two other defendants. The
complaint alleges, inter alia, that Xpedite is in breach of its obligations to
make royalty payments under a series of license agreements between Xpedite and
the Telentry Partnerships. In this action, the plaintiff's seek, inter alia,
damages of $2,030,040 and an accounting of royalties.
On February 23, 1998, Rudolf R. Nobis and Constance Nobis filed a complaint
in the Superior Court of Union County, New Jersey against 15 named defendants
including Xpedite Systems, Inc. ("Xpedite") and certain of its alleged current
and former officers, directors, agents and representatives. The lawsuit is
styled Rudolf R. Nobis and Constance Nobis v. Edward Angrisani, et al., Civil
Action File No. UNN-L-113698, Superior Court of New Jersey Law Division: Union
County. The plaintiffs allege that the 15 named defendants and certain
unidentified "John Doe defendants" engaged in wrongful activities in
connection with the management of the plaintiffs' investments with Equitable
Life Assurance Society of the United States and/or Equico Securities, Inc.
(collectively "Equitable"). More specifically, the complaint asserts
wrongdoing in connection with the plaintiffs' investment in securities of
Xpedite and in unrelated investments involving insurance-related products. The
defendants include Equitable and certain of its current or former
representatives. The allegations in the complaint against Xpedite are limited
to plaintiffs' investment in Xpedite. The plaintiffs have alleged that two of
the named defendants, allegedly acting as officers, directors, agents or
representatives of Xpedite, induced the plaintiffs to make certain investments
in Xpedite but that the plaintiffs failed to receive the benefits that they
were promised. The plaintiffs allege that Xpedite knew or should have known of
alleged wrongdoing on the part of other defendants. The plaintiffs' claims
against Xpedite include breach of contract, breach of fiduciary duty, unjust
enrichment, conversion, fraud, conspiracy, interference with economic
advantage and liability for ultra vires acts. The plaintiffs seek an
accounting of the corporate stock in Xpedite, compensatory damages of
$4,845,953.13, plus $200,000 in "lost investments," interest and/or dividends
that have accrued and have not been paid, punitive damages in an unspecified
amount, and for certain equitable relief, including a request for Xpedite to
issue 139,430 shares of common stock in the plaintiffs' names, attorneys' fees
and costs
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and such other and further relief as the Court deems just and equitable.
Xpedite intends to file an answer denying
the material allegations of the complaint and asserting various affirmative
defenses and a motion to dismiss the counts of the complaint against it.
Premiere believes that Xpedite has meritorious defenses to the plaintiffs'
allegations, but due to the inherent uncertainties of the litigation process,
Premiere is unable to predict the outcome of this litigation. If the outcome
of this litigation is adverse to Xpedite, it could have a material adverse
effect on the Company's business, operating results and financial condition.
Dependence on Switching Facilities and Computer Telephony Platforms; Damage,
Failure and Downtime. The Company currently maintains switching facilities and
computer telephony platforms in Atlanta, Georgia, Dallas, Texas and London,
England. The Company's network service operations are dependent upon its
ability to protect the equipment and data at its switching facilities against
damage that may be caused by fire, power loss, technical failures,
unauthorized intrusion, natural disasters, sabotage and other similar events.
The Company has taken precautions to protect itself and its subscribers from
events that could interrupt delivery of the Company's services. These
precautions include physical security systems, uninterruptible power supplies,
on-site power generators, upgraded backup hardware and fire protection
systems. The Company's network is further designed such that the data on each
network server is duplicated on a separate network server. Notwithstanding
such precautions, and although the Company has not experienced any significant
downtime of its network in the last three years due to technical failures,
natural disasters or similar events, there can be no assurance that a fire,
act of sabotage, technical failure, natural disaster or a similar event would
not cause the failure of a network server and its backup server, other
portions of the Company's network or one of the switching facilities as a
whole, thereby resulting in an interruption of the Company's services. Such an
interruption could have a material adverse effect on the Company's business,
financial condition and results of operations. Although the Company maintains
business interruption insurance providing for aggregate coverage of
approximately $10.8 million per policy year, there can be no assurance that
the Company will be able to maintain its business interruption insurance, that
such insurance will continue to be available at reasonable prices or that such
insurance will be sufficient to compensate the Company for losses it
experiences due to the Company's inability to provide services to its
subscribers.
Factors Affecting Operating Results; Potential Fluctuations in Quarterly
Results. The Company's operating results have varied significantly in the past
and may vary significantly in the future. Special factors that may cause the
Company's future operating results to vary include: (i) the unique nature of
strategic relationships into which the Company may enter in the future; (ii)
changes in operating expenses resulting from such strategic relationships and
other factors; (iii) the continued acceptance of the Company's licensing
program; (iv) the financial performance of the Company's licensees; (v) the
timing of new service announcements; (vi) market acceptance of new and
enhanced versions of the Company's services; (vii) potential acquisitions;
(viii) changes in legislation and regulation that may affect the competitive
environment for the Company's communications services; and (ix) general
economic and seasonal factors.
In the future, revenues from the Company's strategic relationships may
become an increasingly significant portion of the Company's total revenues.
Due to the unique nature of each strategic relationship, these relationships
may change the Company's mix of expenses relative to revenues.
Quarterly revenues are difficult to forecast because the market for the
Company's services is rapidly evolving. The Company's expense levels are
based, in part, on its expectations as to future revenues. If revenue levels
are below expectations, the Company may be unable or unwilling to reduce
expenses proportionately and operating results would likely be adversely
affected. As a result, the Company believes that period-to-period comparisons
of its results of operations are not necessarily meaningful and should not be
relied upon as indications of future performance. Due to all of the foregoing
factors, it is likely that in some future quarter the Company's operating
results will be below the expectations of public market analysts and
investors. In such event, the market price of the Company's Common Stock will
likely be materially adversely affected.
Risk of Software Failures or Errors. The software developed and utilized by
the Company in providing its services, including the Orchestrate software, may
contain undetected errors. Although the Company generally
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engages in extensive testing of its software prior to introducing the software
onto its network, there can be no assurance that errors will not be found in
the software after the software goes into use. Any such error may result in
partial or total failure of the Company's network, additional and unexpected
expenses to fund further product development or to add programming personnel
to complete a development project, and loss of revenue because of the
inability of subscribers to use Premiere's network or the cancellation by
subscribers of their service with Premiere, any of which could have a material
adverse effect on the Company. The Company maintains technology errors and
omissions insurance coverage of $10.0 million per policy aggregate. However,
there can be no assurance that the Company will be able to maintain its
technology errors and omissions insurance, that such insurance will continue
to be available at reasonable prices or will be sufficient to compensate the
Company for losses it experiences due to the Company's inability to provide
services to its subscribers.
Dependence upon Telecommunication Providers; No Guaranteed Supply. The
Company does not own a transmission network and, accordingly, depends on
WorldCom, LCI International Telecom Corp. ("LCI"), MCI, Sprint and other
facilities-based and non-facilities based carriers for transmission of its
subscribers' long distance calls. These long distance telecommunications
services generally are procured pursuant to supply agreements for terms of
three to five years, subject to earlier termination in certain events. Certain
of these agreements provide for minimum purchase requirements. Further, the
Company is dependent upon LECs for call origination and termination. If there
is an outage affecting one of the Company's terminating carriers, the
Company's platform automatically switches calls to another terminating carrier
if capacity is available. The Company has not experienced significant losses
in the past due to interruptions of service at terminating carriers, but no
assurance can be made in this regard in the future. The Company's ability to
maintain and expand its business depends, in part, on its ability to continue
to obtain telecommunication services on favorable terms from long distance
carriers and the cooperation of both interexchange and LECs in originating and
terminating service for its subscribers in a timely manner. The partial or
total loss of the ability to receive or terminate calls would result in a loss
of revenues by the Company and could lead to a loss of subscribers, which
could have a material adverse effect on the Company.
The Company leases capacity on the WorldCom backbone to provide connectivity
and data transmission within the Company's private data network. The
telecommunication agreement expires in September 2000. The Company's hub
equipment is collocated at various WorldCom sites pursuant to co-location
agreements that are terminable by either party upon 30 days written notice.
The Company's ability to maintain network connectivity is dependent upon its
access to transmission facilities provided by WorldCom or an alternative
provider. The Company has no assurance that it will be able to continue such
relationship with WorldCom beyond the terms of its current agreements with
WorldCom or that it will be able to find an alternative provider on terms as
favorable as those offered by WorldCom or on any other terms. If the Company
were required to relocate its hub equipment or change its network transmission
provider, it could experience shutdowns in its service and increase costs
which could have a material adverse effect on its customer relationships and
customer retention and, therefore, its business, financial condition and
results of operations.
Reliance on Supplier of Voice Messaging Equipment. The Company does not
manufacture voice messaging equipment used at its voice messaging service
centers, and such equipment is currently available from a limited number of
sources. Although the Company has not historically experienced any significant
difficulty in obtaining equipment required for its operations and believes
that viable alternative suppliers exist, no assurance can be given that
shortages will not arise in the future or that alternative suppliers will be
available. The inability of the Company to obtain this equipment could result
in delays or reduced delivery of messages which would materially and adversely
affect the Company's business, financial condition and results of operations.
Regulation. Various regulatory factors affect the Company's financial
performance and its ability to compete. The Company's operating subsidiaries
that provide regulated long distance telecommunications services ("Operating
Subsidiaries") are subject to regulation by the FCC and by various state
public service and public utility commissions ("PUCs"), and are otherwise
affected by regulatory decisions, trends and policies
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made by these agencies. FCC rules currently require interexchange carriers to
permit resale of their transmission services. FCC rules also require LECs to
provide all interexchange carriers with equal access to local exchange
facilities for purposes of origination and termination of long distance calls.
If either or both of these requirements were eliminated, the Company could be
adversely affected. Moreover, the underlying carriers that provide services to
the Operating Subsidiaries or that originate or terminate the Operating
Subsidiaries' traffic may increase rates or experience disruptions in service
due to factors outside the Company's control, which could cause the Operating
Subsidiaries to experience increases in rates for telecommunications services
or disruptions in transmitting their subscribers' long distance calls.
PCI, one of the Operating Subsidiaries, has made the requisite filings with
the FCC to provide interstate and international long distance services.
VoiceCom Systems, Inc. ("VCOM"), another Operating Subsidiary, is in the
process of making the requisite filings with the FCC to provide interstate and
international long distance services. There can be no assurance that the FCC
will approve VCOM's filings. Failure by VCOM to comply with FCC requirements
in connection with its provision of interstate and international long distance
services could have a material adverse effect on the Company's or on VCOM's
business, financial condition and results of operation.
In order to provide intrastate long distance service, the Operating
Subsidiaries generally are required to obtain certification from state PUCs,
to register with such state PUCs or to be found exempt from registration by
such state PUCs. Each of PCI and VCOM has either filed the applications
necessary to provide intrastate long distance telecommunications services
throughout the United States or is in the process of filing such applications.
To date, PCI is authorized to provide long distance telecommunications
services in 46 states and in the District of Columbia and is seeking
authorization to provide long distance telecommunications services in four
states. With the exception of three states, Colorado, Michigan and Arizona, in
which PCI's applications to provide operator service (i.e., "0+") are pending,
PCI is authorized to provide operator service in each state where PCI provides
long distance telecommunications service. VCOM, on the other hand, is
authorized to provide long distance telecommunications services in 13 states
and in the District of Columbia and is in the process of filing applications
for certificates to provide long distance telecommunications services in 37
states. The Operating Subsidiaries' facilities do not prevent subscribers from
using the facilities to make long distance calls in any state, including
states in which the Operating Subsidiaries currently are not authorized to
provide intrastate telecommunications services and operator services. There
can be no assurance that the Operating Subsidiaries' provision of long
distance telecommunications and operator services in states where the
Operating Subsidiaries are not authorized to provide such services will not
have a material adverse effect on the Company's or on the Operating
Subsidiaries' business, financial condition and results of operations.
The 1996 Act is intended to increase competition in the long distance and
local telecommunications markets. The 1996 Act opens competition in the local
services market and, at the same time, contains provisions intended to protect
consumers and businesses from unfair competition by incumbent LECs, including
the RBOCs. The 1996 Act allows RBOCs to provide long distance service outside
of their local service territories but bars them from immediately offering in-
region interLATA long distance services until certain conditions are
satisfied. An RBOC must apply to the FCC to provide in-region interLATA long
distance services and must satisfy a set of pro-competitive criteria intended
to ensure that RBOCs open their own local markets to competition before the
FCC will approve such application. Further, while the FCC has final authority
to grant or deny such RBOC application, the FCC must consult with the
Department of Justice to determine if, among other things, the entry of the
RBOC would be in the public interest, and with the relevant state to determine
if the pro-competitive criteria have been satisfied. While the FCC has yet to
grant any RBOC inter-LATA application, the Company is unable to determine how
the FCC will rule on any such applications in the future.
In response to a constitutional challenge filed by SBC Communications Inc.,
the United States District Court for the Northern District of Texas found the
1996 Act's restrictions on RBOC interLATA services to be an unconstitutional
bill of attainder, but stayed the effect of its decision pending further
appeal. As a result of the 1996 Act and if the interLATA restrictions are
ultimately struck down, the Company may experience increased competition from
others, including the RBOCs. In addition, the Operating Subsidiaries may be
subject to
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additional regulatory requirements and fees, including universal service
assessments and payphone compensation surcharges resulting from the
implementation of the 1996 Act.
In conducting its business, the Company is subject to various laws and
regulations relating to commercial transactions generally, such as the Uniform
Commercial Code and is also subject to the electronic funds transfer rules
embodied in Regulation E promulgated by the Board of Governors of the Federal
Reserve System (the "Federal Reserve"). Congress has held hearings regarding,
and various agencies are considering, whether to regulate providers of
services and transactions in the electronic commerce market. For example, the
Federal
Reserve recently completed a study, directed by Congress, regarding the
propriety of applying Regulation E to stored value cards. The Department of
Treasury recently promulgated proposed rules applying record keeping,
reporting and other requirements to a wide variety of entities involved in
electronic commerce. It is possible that Congress, the states or various
government agencies could impose new or additional requirements on the
electronic commerce market or entities operating therein. If enacted, such
laws, rules and regulations could be imposed on the Company's business and
industry and could have a material adverse effect on the Company's business,
financial condition and results of operations. The Company's proposed
international activities also will be subject to regulation by various
international authorities and the inherent risk of unexpected changes in such
regulation.
Risks Associated with International Expansion. A key component of the
Premiere strategy is its planned expansion into international markets. In
1996, the Company opened a POP site in London, England which is currently
being upgraded to a full switching facility and computer telephony platform.
In addition, the Company intends to pursue long term strategic relationships
with European partners. Premiere also intends to establish high speed
client/server networks of personal computers (called "Telnodes") and PCs
utilizing the Company's proprietary software (called "Network Managers") in
Canada, New Zealand and potentially other countries in 1998. The Company
currently has voice messaging service centers in Canada, Australia, New
Zealand and Puerto Rico, If international revenues are not adequate to offset
the expense of establishing and maintaining these international operations,
Premiere's business, financial condition and results of operations could be
materially adversely affected. To date, Premiere has only limited experience
in marketing and distributing its services internationally. There can be no
assurance that Premiere will be able to successfully establish the proposed
international Telnodes and Network Managers or to market, sell and deliver its
services in international markets. In addition to the uncertainty as to
Premiere's ability to expand its international presence, there are certain
difficulties and risks inherent in doing business on an international level,
such as burdensome regulatory requirements and unexpected changes in these
requirements, export restrictions, export controls relating to technology,
tariffs and other trade barriers, difficulties in staffing and managing
international operations, longer payment cycles, problems in collecting
accounts receivable, political instability, fluctuations in currency exchange
rates, seasonal reductions in business activity during the summer months in
Europe and certain other parts of the world and potentially adverse tax
consequences. The Company denominates foreign transactions in foreign currency
and does not engage in hedging transactions. The Company has not experienced
any material losses from fluctuations in currency exchange rates, but there
can be no assurance that the Company will not incur material losses due to
currency exchange rate fluctuations in the future.
Premiere recently completed the Xpedite Merger. A significant portion of
Xpedite's business is conducted outside the United States and a significant
portion of its revenues and expenses are derived in foreign currencies.
Accordingly, Xpedite's results of operations may be materially affected by
fluctuations in foreign currencies. Many aspects of Xpedite's international
operations and business expansion plans are subject to foreign government
regulations, currency fluctuations, political uncertainties and differences in
business practices. There can be no assurance that foreign governments will
not adopt regulations or take other actions that would have a
direct or indirect adverse impact on the business or market opportunities of
Xpedite within such governments' countries, including increased tariffs.
Furthermore, there can be no assurance that the political, cultural and
economic climate outside the United States will be favorable to Xpedite's
operations and growth strategy.
Risks Associated with Expansion of Enhanced Document Distribution
Services. Premiere intends to accelerate growth of Enhanced Document
Distribution Services throughout the world by expansion of Xpedite's
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proprietary private world-wide document distribution network (the "Xpedite
Network"), the integration of the Xpedite Network with Premiere's private
frame relay network and computer telephony platform and the acquisition of
entities engaged in the business of Enhanced Document Distribution Services.
There can be no assurance that Premiere will be able to expand its ability to
provide services at a rate or in a manner satisfactory to meet the demands of
existing or future customers, including, but not limited to, increasing the
capacity of the Xpedite Network to process increasing amounts of document
traffic, integrating and increasing the capability of the Xpedite Network to
perform tasks required by Premiere's customers or identifying and establishing
alliances with new partners in order to enable Premiere to expand its network
in new geographic regions. Such inability may adversely affect customer
relationships and perceptions of Premiere in the markets in which it provides
services, which could have a material adverse effect on Premiere's business,
financial condition or results of operations. In addition, such growth will
involve substantial investments of capital, management and other resources.
There can be no assurance that Premiere will generate sufficient cash for
future growth of the Enhanced Document Distribution Services business through
earnings or external financings, or that such external financings will be
available on terms acceptable to Premiere or that Premiere will be able to
employ any such resources in a manner that will result in accelerated growth.
Risk of Loss from Returned Transactions; Fraud; Bad Debt; Theft of
Services. Premiere uses two principal financial payment clearance systems: the
Federal Reserve's Automated Clearing House for electronic fund transfers; and
the national credit card systems for electronic credit card settlement. In its
use of these established payment clearance systems, Premiere generally bears
credit risks similar to those normally assumed by other users of these systems
arising from returned transactions caused by insufficient funds, stop payment
orders, closed accounts, frozen accounts, unauthorized use, disputes, theft or
fraud. From time to time, persons have gained unauthorized access to
Premiere's network and obtained services without rendering payment to Premiere
by unlawfully using the access numbers and Personal Identification Numbers
("PINs") of authorized users. In addition, in connection with Premiere's
wholesale prepaid telephone card relationships, Premiere has experienced
unauthorized activation of prepaid telephone cards. No assurance can be given
that losses due to unauthorized use of access numbers and PINs, unauthorized
activation of prepaid calling cards or activation of prepaid calling cards in
excess of the prepaid amount, or theft of prepaid calling cards will not be
material. Premiere attempts to manage these risks through its internal
controls and proprietary billing system. Premiere's computer telephony
platform is designed to prohibit a single access number and PIN from
establishing multiple simultaneous connections to the platform, and Premiere
establishes preset spending limits for each subscriber. Premiere also
maintains reserves for such risks. Past experience in estimating and
establishing reserves and Premiere's historical losses are not necessarily
accurate indicators of Premiere's future losses or the adequacy of the
reserves established by Premiere in the future. Although Premiere believes
that its risk management and bad debt reserve practices are adequate, there
can be no assurance that Premiere's risk management practices, including its
internal controls, or reserves will be sufficient to protect Premiere from
unauthorized or returned transactions or thefts of services which could have a
material adverse effect on Premiere's business, financial condition and
results of operations.
Anti-Takeover Effects of Certain Provisions of Articles of Incorporation,
Bylaws and Georgia Law. The Board of Directors of the Company is empowered to
issue preferred stock without shareholder action. The existence of this
"blank-check" preferred could render more difficult or discourage an attempt
to obtain control of the Company by means of a tender offer, merger, proxy
contest or otherwise. The Company's Articles of Incorporation, as amended (the
"Articles"), divide the Board of Directors into three classes, as nearly equal
in size as possible, with staggered three-year terms. One class will be
elected each year. The classification of the Board of Directors could have the
effect of making it more difficult for a third party to acquire control of the
Company. The Company is also subject to certain provisions of the Georgia
Business Corporation Code which relate to business combinations with
interested shareholders. In addition to considering the effects of any action
on the Company and its shareholders, the Company's Articles permit the Board
of Directors and the committees and individual members thereof to consider the
interests of various constituencies, including employees, customers,
suppliers, and creditors of the Company, communities in which the Company
maintains offices or
22
<PAGE>
operations, and other factors which such directors deem pertinent, in carrying
out and discharging the duties and responsibilities of such positions and in
determining what is believed to be in the best interests of the Company.
USE OF PROCEEDS
The Shares are offered by the Selling Shareholders and, accordingly,
Premiere will not receive any of the proceeds from the sales thereof.
23
<PAGE>
SELLING SHAREHOLDERS
The Company issued the Shares on various dates during April through June,
1997 and September 1997 to (i) the former owners of the Voice-Tel Entities in
connection with the Voice-Tel Acquisitions and (ii) certain of the former
shareholders of VoiceCom in connection with the acquisition of VoiceCom (the
"VoiceCom Acquisition"). In connection with the Voce-Tel Acquisitions and the
VoiceCom Acquisition, the Company entered into Registration Rights Agreements
dated April 30, 1997 and September 30, 1997 (the "Registration Rights
Agreements") with the former owners of the Voice-Tel Entities and certain
former shareholders of VoiceCom. The Registration Statement of which this
Prospectus forms a part was filed pursuant to the Registration Rights
Agreements, as amended.
The following table sets forth certain information as of the date of this
Prospectus concerning the name of each Selling Shareholder and the number of
shares of Common Stock beneficially owned and offered hereby that may be
offered from time to time pursuant to this Prospectus. As of the date of this
Prospectus, and except as noted below, none of the Selling Shareholders has
had a material relationship with Premiere or any of its affiliates within the
past three years. The table has been prepared (i) with respect to the former
owners of the Voice-Tel Entities, on the basis of information furnished to the
Company by or on behalf of the Selling Shareholders and by SunTrust Bank,
Atlanta, the Company's transfer agent, and on the basis of the Company's
records and (ii) with respect to the former VoiceCom shareholders, on the
basis of information furnished by SunTrust Bank, Atlanta and the Company's
records.
Information concerning the Selling Shareholders may change from time to time
and any such changed information will be set forth in supplements to this
Prospectus if and when necessary. Because the Selling Shareholders may offer
all or some of the Shares pursuant to this Offering, no estimate can be given
as to the amount of Shares that will be held by the Selling Shareholders upon
the termination of this Offering. See "Sale of Shares."
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
PRIOR TO OFFERING
-----------------------------------------
SHARES SHARES
TOTAL SHARES NOT HELD IN OFFERED
SELLING SHAREHOLDER SHARES(1)(12) SUBJECT TO ESCROW ESCROW(2) HEREBY
- ------------------- ------------- ----------------- --------- -------
<S> <C> <C> <C> <C>
Gerald L. Abbott, Jr......... 778 701 77 701
Barbara Jane Allan(3)(4)..... 3,645 0 3,645 3,645
Barbara Joan Allan(5)........ 9,370 7,718 1,652 4,079
Jeffrey J. Allan(3)(6)(12)... 56,240 33,691 3,660 1,731
Karin Allan(7)............... 3,660 0 3,660 3,660
Philip H. Allan(3)(8)(12).... 60,328 37,795 3,645 2,113
Pat W. Andresen.............. 98,965 89,069 9,896 48,965
The Stuart B. and Myrna J.
Aranoff Revocable Trust..... 311 280 31 280
Linda D. Aruffo.............. 316 285 31 285
James R. Averette(3)......... 7,302 6,572 730 7,302
Homayun Azarmsa.............. 883 795 88 795
Leo L. Azure, Jr............. 17,763 15,987 1,776 15,987
Leo L. Azure, Jr., IRA
Rollover ................... 1,207 1,087 120 1,087
Major Bashinsky.............. 67,394 59,516 7,878 50,000
Alan Beale................... 2,984 2,686 298 2,984
Richard W. Benson(3)(12)..... 22,182 19,215 2,134 21,349
Gwendolyn K. Benson(3)....... 21,349 19,215 2,134 21,349
J. Thomas Bentley(12)........ 4,742 4,045 449 4,045
Bertelsen Family Trust....... 1,788 1,610 178 1,610
Fiona M. Bland............... 1,626 0 1,626 1,626
Joan S. Boggess.............. 22,614 20,353 2,261 22,614
James L. Bogle............... 583 525 58 525
Joseph T. Braverman(3)....... 139,954 126,566 13,388 139,954
British Telecommunications,
plc......................... 77,833 70,050 7,783 70,050
Brooks Equipment Limited(9).. 95,311 86,057 9,254 95,311
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
PRIOR TO OFFERING
-----------------------------------------
SHARES SHARES
TOTAL SHARES NOT HELD IN OFFERED
SELLING SHAREHOLDER SHARES(1)(12) SUBJECT TO ESCROW ESCROW(2) HEREBY
- ------------------- ------------- ----------------- --------- -------
<S> <C> <C> <C> <C>
Michael S. Brownfield(12).... 22,888 20,376 2,264 20,376
Linda T. Busch............... 266 240 26 240
Paul F. Busch................ 375 338 37 338
Cable Family Partnership..... 951 856 95 856
Stephen C. Cadwallader....... 7,167 6,451 716 7,167
John R. Callahan............. 748 674 74 674
Alan J. Carter(12)........... 146,270 115,957 20,313 136,270
Carter Voice, Inc............ 181,358 153,779 27,579 181,358
Warren E. Carter II.......... 14,301 11,012 3,289 14,301
Carvo, Inc................... 107,193 96,474 10,719 107,193
Michael C. Chacho(3)(12)..... 60,166 52,050 6,450 18,500
Walter W. Challenger......... 3,523 0 3,523 3,523
Foster H. Chase, Jr.......... 4,872 0 4,872 4,872
Foster H. & Brenda J. Chase.. 52,270 51,429 841 52,270
Citigrowth Fund L.P.......... 87,012 78,311 8,701 78,311
Clam Cove Holdings Inc.(10).. 37,940 34,146 3,794 4,390
Frederick W. Clarke IV....... 25,874 23,406 2,468 10,350
George G. Clarke(3)(12)...... 28,763 25,199 2,731 12,900
Kendall J. Cooper............ 1,295 1,171 124 1,295
E. Thomas Costello(3)(12).... 8,911 6,521 724 7,245
Cecil D. Crow Jr............. 3,003 2,703 300 3,003
Geoffrey W. Crowley.......... 5,437 4,894 543 5,437
Dakle, Inc................... 6,946 5,166 1,780 6,946
Donald J. Dally(3)........... 66,757 60,573 6,184 66,757
Kitty C. Dally(3)............ 14,504 10,381 4,123 14,504
James E. Daly................ 103 93 10 93
Jeffrey B. Detwiler.......... 20 18 2 18
Lawrence J. Diana(3)(12)..... 144,430 92,551 10,212 35,000
John W. & Eileen Dodson(3)... 33,100 28,590 4,510 30,000
Marjorie Dowd(3)............. 28,583 25,725 2,858 28,583
Sean Dowd(3)(12)............. 30,683 25,325 2,858 28,183
Mark Dunaway................. 5,562 5,006 556 5,006
The Mark Dunaway Defined
Benefit Pension Plan
No. 001.................... 1,036 933 103 933
Edwina R. Dunlap............. 14 13 1 13
Polly Park Dyer.............. 1,710 1,539 171 1,539
George A. Earnest............ 1,101 991 110 991
Donald L. Eichler............ 2, 591 2,332 259 2,332
Mitchell E. Eil(3)........... 26,234 23,361 2,873 5,200
David A. Ellsworth(3)(12).... 50,926 42,134 5,459 47,593
Gerald S. Ellsworth.......... 50,341 44,882 5,459 50,341
Paul Escobosa................ 40 36 4 36
Peter D. Fagan............... 79,122 71,210 7,912 70,000
Thomas P. & Denna P. Fagan... 9,863 9,863 0 9,863
Thomas P. Fagan & Denna P.
Fagan Living Trust.......... 19,453 19,453 0 19,453
David Fann................... 62 56 6 56
Charles M. Feuer(12)......... 60,476 42,718 12,758 42,718
Ted Fick..................... 217 196 21 196
Joan Field................... 8,780 8,736 44 8,780
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
PRIOR TO OFFERING
-----------------------------------------
SHARES SHARES
TOTAL SHARES NOT HELD IN OFFERED
SELLING SHAREHOLDER SHARES(1)(12) SUBJECT TO ESCROW ESCROW(2) HEREBY
- ------------------- ------------- ----------------- --------- -------
<S> <C> <C> <C> <C>
L. Winston Lee, Trustee for
Marshall Field, Jr.(3)...... 32,752 31,825 927 31,825
Thomas W. Fife(3)(12)........ 25,155 18,549 2,060 18,549
Garvey, Schubert & Barer, a
partnership of professional
corporations................ 876 789 87 789
Ernst Gemassmer.............. 611 550 61 550
Peter Gerry.................. 186 168 18 168
Eugene Gertler(3)............ 8,235 0 8,235 8,235
Lauren A. Gertz, as
Custodian................... 248 224 24 224
Stephen A. Gertz............. 5,629 5,067 562 5,067
Mark Ginella(3).............. 32,273 28,546 3,727 32,273
Neal E. Gold(3)(12).......... 61,833 52,050 6,450 58,500
Allen Goldsher(3)(12)........ 38,106 33,546 3,727 30,000
Steven H. Grapstein.......... 3,484 3,186 298 2,984
Norman F.T. Hall............. 1,441 1,297 144 1,297
D.W.P. Hallahane............. 892 803 89 803
Paulene Hallahane............ 311 280 31 280
Patrick B. Haney(11)......... 95,311 86,057 9,254 95,311
J. Thomas Hannan (Directed
Investment Account, Lovitt &
Hannan Employee Retirement
Plan)....................... 348 314 34 314
Alan D. Hebert............... 5,366 4,530 836 5,366
Elberta A. Holt(3)........... 7,514 7,311 203 7,514
Benton B. Holt III........... 7,820 7,609 211 7,820
Nathan A. Horowitz........... 21,500 19,350 2,150 19,350
Howse Family Partnership..... 951 856 95 856
Banner K. Hughes(3)(12)...... 86,046 73,943 10,437 30,000
The Hughes Family Charitable
Trust (3)................... 20,000 20,000 0 20,000
John A. Hughes(3)(12)........ 72,763 60,051 10,212 38,500
Richard W. Hughes(3)......... 61,957 55,762 6,195 20,000
James R. & Betty M.
Humphrey(3)................. 21,936 19,367 2,569 7,000
Jane W. Ingles(12)........... 669 9 1 9
The Michael Dean Jabara
Revocable Trust............. 10,097 9,088 1,009 9,088
Carol Johnson................ 36 33 3 33
Henry C. & Mary E. Johnson... 45,849 40,265 5,584 45,849
Edward P.
Kalankiewicz(3)(12)......... 6,111 3,721 724 4,445
Barbara Kasoff(3)............ 10,589 3,804 6,785 10,589
Barbara Kasoff Revocable
Trust....................... 61,079 61,079 0 61,079
David Kasoff(3).............. 23,589 20,431 3,158 8,000
Marvin Kasoff(3)............. 6,888 0 6,888 6,888
Marvin & Barbara Kasoff(3)... 2,454 2,454 0 2,454
Marvin Kasoff Revocable
Trust....................... 42,009 42,009 0 42,009
Ralph Kincaid................ 16,265 14,639 1,626 14,639
C. Jay Kurtz ................ 51 46 5 46
Richard Lapin................ 93 84 9 84
Robert A. Larson(3)(12)...... 11,067 7,361 2,040 9,401
Richard A. LaSalle........... 214,699 193,230 21,469 20,000
Lee Smith Family Trust....... 4,665 0 4,665 4,665
David M. Lewis............... 8,610 7,455 1,155 7,455
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
PRIOR TO OFFERING
-----------------------------------------
SHARES SHARES
TOTAL SHARES NOT HELD IN OFFERED
SELLING SHAREHOLDER SHARES(1)(12) SUBJECT TO ESCROW ESCROW(2) HEREBY
- ------------------- ------------- ----------------- --------- -------
<S> <C> <C> <C> <C>
Ronald Lovitt (Directed
Investment Account, Lovitt &
Hannan Employee Retirement
Plan)....................... 331 298 33 298
James Luikert................ 186 168 18 168
Marvin and Catherine
Madsen(3)................... 37,997 0 37,997 7,599
Sabiniano B. Martinez........ 38 35 3 35
Gloria J. Matthews........... 18,117 16,306 1,811 18,117
Marion Gene Matthews......... 29,370 27,559 1,811 29,370
James M. Mattson, Jr......... 622 560 62 560
John Maveety................. 1,290 1,161 129 1,161
Kenneth McCauley............. 62 56 6 56
Douglas J. McMillan.......... 45,756 40,582 5,174 10,000
Mark J. and Julie A. Mon-
ro(3)(12)................... 4,011 611 67 678
Thomas E. Nemic.............. 37,276 33,000 4,276 37,276
Robert B. Nesmith(3)......... 18,567 15,357 3,210 15,000
North American Trust, Trustee
f/b/o Edwin H. Taylor, IRA.. 166 150 16 150
Thomas R. Oliver............. 3,868 3,482 386 3,482
Garrie C. O'Neill(3)(12)..... 67,833 58,050 6,450 64,500
Barbara Page................. 3,705 3,035 670 3,705
Jeet Pahwa(3)................ 21,491 19,342 2,149 21,491
Neerja R. Pahwa(3)........... 20,648 18,584 2,064 20,648
PaineWebber International
(U.K.) LTD.................. 46,345 46,345 0 46,345
Alex R. Papagan(3)(12)....... 14,227 13,069 742 13,811
Charlene Papagan............. 7,423 6,681 742 7,423
Alex R. and Charlene
Papagan(3).................. 1,481 1,481 0 1,481
CH Partners III.............. 76,929 69,237 7,692 69,237
Irene R. Pasarew............. 86,141 73,054 13,087 4,430
Barry S. and Marvlyn K.
Pasarew(3)(12).............. 197,285 141,309 14,309 21,000
Bradley R. Patullo(3)(12).... 8,929 7,287 809 8,096
Christina M. Patullo......... 552 497 55 552
Dorothy Paul(3).............. 29,177 26,260 2,917 29,177
Russell Paul(3).............. 29,177 26,260 2,917 29,177
Edward P. Pearsall(3)........ 41,068 36,253 4,815 20,000
D. Conrad Pearson(3)(12)..... 11,429 7,287 809 8,096
Philip C. Perry.............. 4,154 3,739 415 3,739
Alex Polson.................. 259 234 25 234
Premier Holdings, LLC........ 6,946 5,166 1,780 6,946
John M. Price................ 155 140 15 140
Aaron Prysock................ 12,214 10,993 1,221 12,214
Richard C. Raub, IRA......... 3,110 2,799 311 2,799
Richard C. Raub Trust........ 18,656 16,791 1,865 16,791
Joseph P. Rawley............. 51,063 45,957 5,106 11,063
Barry Reder.................. 130 117 13 117
Linda C. Roaseau Revocable
Living Trust(3)............. 82,407 73,418 8,989 82,407
Lawrence W. Roaseau Revocable
Living Trust(3)(12)......... 85,397 79,259 8,805 82,064
Estate of Arthur Rotelli(3).. 31,956 28,761 3,195 31,956
Paul Sandler................. 370,075 333,068 37,007 370,075
Steve Sarich, Jr............. 5,979 5,382 597 5,382
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
PRIOR TO OFFERING
-----------------------------------------
SHARES SHARES
TOTAL SHARES NOT HELD IN OFFERED
SELLING SHAREHOLDER SHARES(1)(12) SUBJECT TO ESCROW ESCROW(2) HEREBY
- ------------------- ------------- ----------------- --------- ---------
<S> <C> <C> <C> <C>
Mary L. Schwartz(3)........ 963 459 504 963
Michael D. Schwartz(3)(12). 9,629 7,459 504 7,963
James H. Shumock........... 3,091 2,791 300 3,091
Greg Simmons(3)............ 12,297 11,809 488 12,297
David A. Simpson........... 12 11 1 11
David Skiba(3)............. 21,691 19,522 2,169 21,691
Roger B. & Gail L. Smith... 201,922 182,566 19,356 201,922
Clare H. Springs........... 40 36 4 36
St. Matthew's Episcopal
Church.................... 285 285 0 285
St. Patrick Church......... 400 400 0 400
William H. Stephens(12).... 157,638 113,683 33,955 147,638
Sundance Venture Partners,
L.P....................... 23,085 20,777 2,308 20,777
Sutro Investment Partners
II........................ 1,244 1,120 124 1,120
Sutro Investment Partners
III....................... 3,887 3,499 388 3,499
W. David Sweatt............ 41,605 39,653 1,952 41,605
C. Kenneth Sweet(3)........ 89,991 80,992 8,999 70,000
Edwin Taylor............... 353 318 35 318
321 Investment Co.......... 3,110 2,799 311 2,799
Peter Tjenos............... 176 159 17 159
Killin To.................. 186 168 18 168
Steven F. Trief............ 53,717 48,346 5,371 53,717
G/K Turnbull Trust......... 754 679 75 679
Barbara Vaughan(3)......... 12,720 11,148 1,572 1,500
Carter Enterprises, Inc.
f/k/a Virginia Voice,
Inc....................... 125,707 96,795 28,912 125,707
Ventures Management, Inc.
f/k/a Voice
Management, Inc........... 6,946 5,166 1,780 6,946
Vincent, Paul(3)........... 130,423 117,381 13,042 65,211
Wayne C. Wager............. 980 882 98 882
Wayne C. Wager, IRA........ 311 280 31 280
Chris J. Washko(3)(12)..... 39,987 31,989 4,665 36,654
Kathryn H. Welsh........... 25,732 23,159 2,573 25,732
William E. Welsh(3)(12).... 176,008 98,407 10,934 25,000
David R. Whitman(3)........ 40,615 36,971 3,644 40,615
Nancy L. Whitman........... 9,111 8,200 911 9,111
Widdoes Enterprises, Inc... 143,204 115,625 27,579 60,000
Wilblairco Associates...... 8,034 7,231 803 7,231
Michael E. Williams(3)(12). 22,970 19,074 2,230 21,304
David M. Wilson............ 40 36 4 36
Robert C. Wilson........... 1,555 1,400 155 1,400
Thomas D. Woltjer(3)(12)... 36,608 30,000 4,108 10,000
David M. Young............. 414 373 41 373
Zee Corp................... 24,806 22,126 2,680 3,000
Joel Zeldin Rollover IRA... 40 36 4 36
Elinor C. Ziv(3)........... 56,745 50,972 5,773 56,745
William S. Ziv(3).......... 29,159 26,244 2,915 29,159
---------
TOTAL...................... 4,595,464
</TABLE>
28
<PAGE>
- --------
(1) Each Selling Shareholder beneficially owns less than 1% of the total
number of shares of Common Stock outstanding.
(2) Shares are held in escrow by SunTrust Bank, Atlanta, as escrow agent,
pursuant to various general and specific escrow arrangements related to
the Voice-Tel Acquisitions and the VoiceCom Acquisition. Shares held in
escrow which are offered hereby may only be sold by the Selling
Shareholder if and when released from escrow.
(3) Certain Selling Shareholders were, or currently are, employees or
officers of VTE, Voice-Tel of Canada Ltd. ("VT Canada") or VoiceCom
following the Voice-Tel Acquisitions and the VoiceCom Acquisition.
(4) Includes 3,645 shares of Exchangeable Non-Voting Shares ("Exchangeable
Shares") of VT Canada issued to the former owners of the Canadian Voice-
Tel Entities, which are convertible at any time into a like number of
shares of Common Stock.
(5) Includes 9,370 Exchangeable Shares.
(6) Includes 36,604 Exchangeable Shares.
(7) Includes 3,660 Exchangeable Shares.
(8) Includes 36,456 Exchangeable Shares.
(9) Includes 92,550 Exchangeable Shares.
(10) Includes 37,940 Exchangeable Shares.
(11) Includes 92,550 Exchangeable Shares.
(12) Total Shares Beneficially Owned Prior to Offering for the following
Selling Shareholders includes options to purchase shares of Common Stock
which are exercisable or which become exercisable within 60 days, as
follows:
<TABLE>
<CAPTION>
SELLING SHAREHOLDER Options
------------------- -------
<S> <C>
Jeffrey J. Allan 18,889
Phillip H. Allan 18,889
Richard W. Benson 833
J. Thomas Bentley 248
Michael S. Brownfield 248
Alan J. Carter 10,000
Michael C. Chacho 1,666
George C. Clarke 833
E. Thomas Costello 1,666
Lawrence J. Diana 41,667
Sean Dowd 2,500
David Ellsworth 3,333
Charles M. Feuer 5,000
Thomas W. Fife 4,546
Neal E. Gold 3,333
Allen Goldsher 833
Banner K. Hughes 1,666
</TABLE>
<TABLE>
<CAPTION>
SELLING SHAREHOLDER Options
------------------- -------
<S> <C>
John A. Hughes 2,500
Jane W. Ingles 659
Edward P. Kalankiewicz 1,666
Robert A. Larson 1,666
Mark J. Monro 3,333
Garrie C. O'Neill 3,333
Alex R. Papagan 416
Barry S. Pasarew 41,667
Bradley R. Patullo 833
D. Conrad Pearson 3,333
Lawrence W. Rouseau 3,333
Michael D. Schwartz 1,666
William H. Stephens 10,000
Chris J. Washko 3,333
William E. Welsh 66,667
Michael E. Williams 1,666
Thomas D. Woltjer 2,500
</TABLE>
29
<PAGE>
SALE OF SHARES
The Shares may be sold from time to time by the Selling Shareholders, or by
pledges, donees, transferees or other successors in interest. Such sales may
be made on the Nasdaq National Market or such other national securities
exchange or automated interdealer quotation system on which shares of Common
Stock are then listed, through negotiated transactions or otherwise at prices
related to the then current market price or in negotiated transactions. The
Shares may be sold by one or more at the following methods: (a) ordinary
brokerage transactions and transactions in which the broker solicits
purchasers; (b) purchases by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this Prospectus; (c) a block
trade in which the broker or dealer so engaged will attempt to sell the Shares
as agent but may position and resell a portion of the block as principal to
facilitate the transaction; and (d) through the writing of options on the
Shares. In effecting sales, broker dealers engaged by Selling Shareholders, if
any, may receive compensation in the form of discounts, concessions or
commissions from the Selling Shareholders and/or the purchasers of the Shares
for whom such broker-dealers may act as agents or to whom they may sell as
principals, or both (which compensation as to a particular broker-dealer might
be in excess of customary commissions).
The Selling Shareholders and any broker-dealers, agents or underwriters that
participate with the Selling Shareholders in the distribution of the Shares
may be deemed to be "underwriters" within the meaning of the Securities Act.
Any commissions paid or any discounts or concessions allowed to any such
persons, and any profits received on the resale of the Shares offered hereby
and purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.
Pursuant to the Registration Rights Agreement, the Company has agreed to pay
all expenses incident to the offer and sale of the Shares offered by the
Selling Shareholders hereby, except that the Selling Shareholders will pay all
underwriting discounts and selling commissions, if any. The Company will be
permitted to suspend the use of this Prospectus (which is a part of the
Registration Statement) in connection with sales of Shares by holders during
certain periods of time under certain circumstances relating to pending
corporate developments and public filings with the Commission and similar
events. The Company has agreed to indemnify the Selling Shareholders against
certain liabilities, including liabilities under the Securities Act, and to
contribute to payments the Selling Shareholders may be required to make in
respect thereof.
LEGAL MATTERS
The validity of the Common Stock has been passed upon for the Company by
Alston & Bird LLP, Atlanta, Georgia, counsel to the Company.
EXPERTS
The consolidated financial statements and supplemental financial statements
of the Company as of December 31, 1996 and 1997, and for the years ended
December 31, 1995, 1996 and 1997 as contained in the Company's Annual Report
on Form 10-K for the year ended December 31, 1997 and the Company's Current
Report on Form 8-K/A filed with the Securities and Exchange Commission on
April 13, 1998, incorporated by reference in this prospectus have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.
The consolidated financial statements of Xpedite Systems, Inc. as of
December 31, 1997 and 1996, and for the years ended December 31, 1997, 1996
and 1995 as contained in Premiere's Current Report on Form 8-K/A filed with
the Securities and Exchange Commission on April 13, 1998, incorporated by
reference herein, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
30
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED OR IN-
CORPORATED BY REFERENCE IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFOR-
MATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLIC-
ITATION OF AN OFFER TO BUY, ANY OF THE SECURITIES OFFERED HEREBY BY ANY PERSON
IN ANY JURISDICTION IN WHICH OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH AN OFFERING OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES, IMPLY THAT THE INFORMA-
TION CONTAINED IN THIS PROSPECTUS OR ANY DOCUMENT INCORPORATED BY REFERENCE
HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF OR THEREOF.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Forward Looking Statements................................................. 3
The Company................................................................ 4
Recent Developments........................................................ 4
Risk Factors............................................................... 5
Use of Proceeds............................................................ 23
Selling Shareholders....................................................... 24
Sale of Shares............................................................. 30
Legal Matters.............................................................. 30
Experts.................................................................... 30
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
4,595,464 SHARES
PREMIERE TECHNOLOGIES, INC.
COMMON STOCK
----------------
PROSPECTUS
----------------
APRIL 22, 1998
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the registration of the Securities are set
forth in the following table. All amounts except the Securities and Exchange
Commission registration fee are estimated.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee.............. $ 43,278
Printing Expenses................................................ 100,000
Accountants' Fees and Expenses................................... 400,000
Legal Fees and Expenses.......................................... 100,000
Miscellaneous.................................................... 200,000
--------
Total.......................................................... $843,278
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Georgia Business Corporation Code permits a corporation to eliminate or
limit the personal liability of a director to the corporation or its
shareholders for monetary damages for breach of duty of care or other duty as
a director, provided that no provision shall eliminate or limit the liability
of a director: (i) for an appropriation, in violation of his duties, of any
business opportunity of the corporation; (ii) for acts or omissions which
involve intentional misconduct or a knowing violation of law; (iii) for
unlawful corporate distributions; or (iv) for any transaction from which the
director received an improper personal benefit. This provision related only to
breaches of duty by directors in their capacity as directors (and not in any
other corporate capacity, such as officers) and limits liability only for
breaches of fiduciary duties under Georgia corporate law (and not for
violation of other laws, such as the federal securities laws). The Company's
Articles of Incorporation, as amended, exonerate the Company's directors from
monetary liability to the extent described above.
In addition to such rights as may be provided by law, the Company's Bylaws
provide broad indemnification rights to the Company's directors and such
officers, employees and agents as may be selected by such directors, with
respect to various civil and criminal liabilities and losses which may be
incurred by such director, officer, agent or employee pursuant to any pending
or threatened litigation or other proceedings, except that such
indemnification does not apply in the same situations described above with
respect to the exculpation from liability of the Company's directors. The
Company is also obligated to reimburse such directors and other parties for
expenses, including legal fees, court costs and expert witness fees, incurred
by such person in defending against any such liabilities and losses, as long
as such person in good faith believes that he or she acted in accordance with
the applicable standard of conduct with respect to the underlying accusations
giving rise to such liabilities or losses and agrees to repay to the Company
any advances made under the Bylaws. Any amendment or other modification to the
Bylaws which limits or otherwise adversely affects the rights to
indemnification currently provided therein shall apply only to proceedings
based upon actions and events occurring after such amendment and delivery of
notice thereof to the indemnified parties. Such amendments can only be made
upon the affirmative vote of (i) the holders of at least 75% of the shares
entitled to vote to alter, amend or repeal the provisions of the Bylaws or
(ii) a majority of the Board of Directors present at the meeting at which the
votes are taken.
The Company has entered into separate indemnification agreements with each
of its directors and certain of its officers and employees, whereby the
Company agreed, among other things, to provide for indemnification and
advancement of expenses in a manner and subject to terms and conditions
similar to those set forth in the Bylaws. These agreements may not be
abrogated by action of the shareholders. In addition, the Company holds
II-1
<PAGE>
an insurance policy covering directors and officers under which the insurer
agrees to pay, subject to certain exclusions, for any claim made against the
directors and officers of the Company for a wrongful act that they may become
legally obligated to pay or for which the Company is required to indemnify the
directors or officers.
The Company believes that the above protections are necessary in order to
attract and retain qualified persons as directors and officers.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
3.1 Articles of Incorporation of the Registrant (Incorporated herein by
reference to Exhibit 3.1 to the Registrant's Registration Statement
on Form S-1 (No. 33-80547)).
3.2 Articles of Amendment to Articles of Incorporation (Incorporated
herein by reference to Exhibit 3.2 to the Registrant's Registration
Statement on Form S-8 (No. 333-29787)).
3.3 Amended and Restated Bylaws of the Registrant (Incorporated herein
by reference to Exhibit 3.02 to Registration Statement on Form S-1
(No. 33-80547)).
4.1 See Exhibits 3.1-3.3 for provisions of the Articles of
Incorporation, as amended, and Amended and Restated Bylaws defining
the rights of the holders of common stock of the Registrant.
5.1 Opinion of Alston & Bird LLP.*
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Ernst & Young LLP.
23.3 Consent of Alston & Bird LLP (Included in Exhibit 5.1 above).*
24.1 Powers of Attorney (see Page II-5).*
</TABLE>
- --------
* Previously filed.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any required by section 10(a)(3) of the Securities Act
of 1933 (the "Securities Act");
II-2
<PAGE>
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the Effective Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this Section
do not apply if the Registration Statement is on Form S-3, Form S-8 or Form
F-3 and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT NO. 1 TO
REGISTRATION STATEMENT (NO. 333-50003) TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF ATLANTA, AND STATE OF
GEORGIA, ON APRIL 21, 1998.
Premiere Technologies, Inc.
/s/ Boland T. Jones
By: ___________________________________
BOLAND T. JONES
President and Chief Executive
Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT (NO. 333-50003) HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON APRIL 21, 1998.
SIGNATURE TITLE
/s/ Boland T. Jones Chairman of the Board of Directors
- ------------------------------------ and Chief Executive Officer
BOLAND T. JONES (Principal Executive Officer)
/s/ Patrick G. Jones Senior Vice President of Finance
- ------------------------------------ and Legal and Secretary (Principal
PATRICK G. JONES Financial and Accounting Officer)
Director
/s/ George W. Baker, Sr.*
- ------------------------------------
GEORGE W. BAKER, SR.
Director
/s/ Raymond H. Pirtle, Jr.*
- ------------------------------------
RAYMOND H. PIRTLE, JR.
Director
/s/ Roy B. Andersen, Jr.*
- ------------------------------------
ROY B. ANDERSEN, JR.
*By___/s/ Patrick:G. Jones ____
---------------------------------
PATRICK G. JONES, ATTORNEY-IN-
FACT
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER EXHIBIT DESCRIPTION NO.
------- ------------------- ----
<C> <S> <C>
3.1 Articles of Incorporation of the Registrant (Incorporated
herein by reference to Exhibit 3.1 to the Registrant's
Registration Statement on Form S-1 (No. 33-80547)).
3.2 Articles of Amendment to Articles of Incorporation
(Incorporated herein by reference to Exhibit 3.2 to the
Registrant's Registration Statement on Form S-8 (No. 333-29787)).
3.3 Amended and Restated Bylaws of the Registrant (Incorporated
herein by reference to Exhibit 3.02 to Registration Statement
on Form S-1 (No. 33-80547)).
4.1 See Exhibits 3.1-3.3 for provisions of the Articles of
Incorporation, as amended, and Amended and Restated Bylaws
defining the rights of the holders of common stock of the
Registrant.
5.1 Opinion of Alston & Bird LLP.*
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Ernst & Young LLP.
23.3 Consent of Alston & Bird (Included in Exhibit 5.1 above).*
24.1 Powers of Attorney (included on page II-5).*
</TABLE>
- --------
* Previously filed.
<PAGE>
[LETTERHEAD OF ARTHUR ANDERSEN APPEARS HERE]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement on Form S-3 of our
report included in Premiere Technologies, Inc.'s Annual Report on Form 10-K
dated February 3, 1998, except with respect to Note 17 which is dated February
27, 1998 and our report included in Premiere Technologies, Inc.'s Current Report
on Form 8-K dated February 27, 1998 as amended by the Company's Current Report
on Form 8-K/A filed with the Commission on April 13, 1998 and to all references
to our firm included in this registration statement.
/s/ Arthur Andersen LLP
Atlanta, Ga
April 20, 1998
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference of our firm under the caption "Experts" and to the
incorporation by reference in the Registration Statement (Form S-3 No.
333-50003), of Premiere Technologies, Inc. and in the related prospectus of our
report dated April 6, 1998, with respect to the consolidated financial
statements of Xpedite Systems, Inc. for the three years ended December 31, 1997
included in the current report (Form 8-K/A) of Premiere Technologies, Inc.,
filed with the Securities and Exchange Commission on April 13, 1998.
/s/ Ernst & Young LLP
_____________________
MetroPark, New Jersey
April 20, 1998
