<PAGE>
As filed with the Securities and Exchange Commission on January 18, 2000
Registration No. 333-88707
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
AMENDMENT
NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
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) No.)
3399 Peachtree Road, N.E., 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
Chairman and Chief Executive Officer
Premiere Technologies, Inc.
3399 Peachtree Road, N.E., Suite 600
Atlanta, Georgia 30326
(404) 262-8400
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------
Copies to:
Joel J. Hughey, Esq.
Patrick G. Jones
Executive Vice President, Chief Legal Adam V. Battani, Esq.
Officer and Chief Financial Officer Alston & Bird LLP
One Atlantic Center
Premiere Technologies, Inc. 1201 West Peachtree Street
3399 Peachtree Road, N.E., Suite 600 Atlanta, Georgia 30309-3424
Atlanta, Georgia 30326 (404) 881-7000
(404) 262-8400
Approximate date of commencement of proposed sale to the public: As soon as
practicable on or after the effective date of this Registration Statement.
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, 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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Subject to completion, dated January 18, 2000
PROSPECTUS
448,844 Shares
PREMIERE TECHNOLOGIES, INC.
Common Stock
The shareholders named in the table included in the "Selling Shareholders"
section of this prospectus, which begins on page 26, are offering all of the
shares of our common stock covered by this prospectus.
The selling shareholders will sell their shares as described in the "Plan of
Distribution" section, which begins on page 26. We will not receive any of the
proceeds from the sale of shares of our common stock by the selling
shareholders.
Our common stock is traded on the Nasdaq National Market System under the
symbol "PTEK." The last reported sales price of our common stock on January 14,
2000 was $6.50.
----------------
This investment involves risks. See "Risk Factors" beginning on page 3.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
The date of this prospectus is , 2000
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
Risk Factors............................................................... 3
Special Note Regarding Forward-Looking Statements.......................... 23
Our Business............................................................... 25
Selling Shareholders....................................................... 26
Plan of Distribution....................................................... 26
Use of Proceeds............................................................ 27
Experts.................................................................... 27
Opinion.................................................................... 27
Incorporation by Reference................................................. 27
Additional Information..................................................... 29
</TABLE>
Our logo and certain titles of our product and service offerings mentioned
in this prospectus are our service marks and trademarks. All other brand names
or trademarks appearing in this prospectus are the property of their respective
holders.
2
<PAGE>
RISK FACTORS
You should carefully consider the following risks before deciding to
purchase shares of our common stock. If any of the following risks actually
occur, the trading price of our common stock could decline, and you could lose
all or part of your investment. You should also refer to the other information
in this prospectus and the information incorporated herein by reference,
including our financial statements and the related notes.
Risks Related to Our Industry
The markets for our products and services are intensely competitive and we may
not be able to compete successfully against existing and future competitors,
which may make it difficult to maintain or increase our market share and
revenue.
The markets for our products and services are intensely competitive and we
expect competition to increase in the future. Many of our 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 we do.
As a result, our competitors may be able to respond more quickly than we can
to new or emerging technologies and changes in customer demands, and they may
also be able to devote greater resources than we can to the development,
promotion and sale of their products and services. We believe that our current
competitors are likely to expand their product and service offerings and that
new competitors are likely to enter our markets. Existing and new competitors
may attempt to integrate their products and services, resulting in greater
competition. Increased competition could result in price pressure on our
products and services and a decrease in our market share in the various
markets in which we compete, either of which could hinder our ability to grow
our revenue.
Examples of competitors in the markets for our products and services are
shown in the following chart:
<TABLE>
<CAPTION>
Product or Service Example Competitors
- ------------------ -------------------
<S> <C>
Document Distribution AT&T Corporation
MCI WorldCom, Inc.
Sprint Corporation
AVT Corporation
Critical Path, Inc.
NetMoves Corporation
Voice Messaging AT&T Corporation
Regional Bell operating companies
Octel Communications Corporation (owned by Lucent Technologies, Inc.)
Nortel Networks Corporation
Seimens Information and Communications Networks, Inc.
Centigram Communications Corporation
Interactive Voice
Response AT&T Corporation
MCI WorldCom, Inc.
Lucent Technologies, Inc.
West TeleServices Corporation
Call Interactive
Syntellect Inc.
Conferencing AT&T Corporation
MCI WorldCom, Inc.
Sprint Corporation
Vialog Corporation
Genesys Corporation
ACT Teleconferencing, Inc.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Product or
Service Example Competitors
- ---------- -------------------
<S> <C>
Enhanced Calling AT&T Corporation
MCI WorldCom, Inc.
Sprint Corporation
Unified Messaging Octel Communications Corporation (owned by Lucent Technologies, Inc.)
(Orchestrate) JFAX.com, Inc.
EFAX.com, Inc.
General Magic, Inc.
</TABLE>
The Telecommunications Act of 1996 may increase competition in the markets in
which we compete.
The Telecommunications Act of 1996 is intended to increase competition in
the long distance and local telecommunications markets. We may experience
increased competition from others, including the regional Bell operating
companies, as a result of this law. This law 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 local exchange
carriers, which generally are local telephone companies that provided local
telephone services on the date of the enactment of the law, and which includes
the regional Bell operating companies.
The Telecommunications Act of 1996 allows the regional Bell operating
companies to provide long distance service within and between local access and
transport areas that are outside of their local service territories. Local
access and transport areas are geographic areas in the U.S. within which
incumbent local telephone companies traditionally offered local telephone
services. However, this legislation prohibits the regional Bell operating
companies from offering long distance services in their local service territory
that originate in one local access and transport area and terminate in another,
unless they satisfy various conditions. A regional Bell operating company must
apply to the FCC to provide long distance services in their local service
territory and they must satisfy a set of pro-competitive criteria intended to
ensure that they open their own local markets to competition before the FCC
will approve their application. The FCC has recently granted approval to Bell
Atlantic to provide this type of long distance service in New York, and the FCC
may grant approval to similar applicants in the future. We may experience
increased competition if, and when, the FCC grants these applications.
This legislation also grants the FCC broad authority to deregulate other
aspects of the telecommunications industry. If the FCC implements deregulation
of other aspects of the telecommunications industry in the future, it could
facilitate the offering of an integrated suite of information and
telecommunications services by the regional Bell operating companies, which
would increase the amount of competition we face.
The development of alternatives to our products and services may cause us to
lose customers and market share, and may hinder our ability to maintain or grow
our revenue.
The market for our products and services is characterized by rapid
technological change, frequent new product introductions and evolving industry
standards. We expect new products and services, and enhancements to existing
products and services, to be developed and introduced that will compete with
our products and services. Technological advances may result in the development
and commercial availability of alternatives to our products and services or new
methods of delivering our products and services. Companies may develop and
offer product features, service offerings or pricing options which are more
attractive to customers than those currently offered by us. These new products
or services, or methods of delivering these products or services could:
. cause our existing products and services to become obsolete;
. be more cost-effective, which could result in significant pricing
pressure on or products and services; or
. allow our existing and potential customers to meet their own
telecommunications needs without using our services.
4
<PAGE>
Technological changes that make our products obsolete, or changes in technology
that allow competitors to offer products and services that replace our existing
products and services could cause us to lose customers, market share and
revenue.
If new products and services that we develop and introduce are not accepted in
the marketplace, we may lose market share and our revenue may decrease.
We must continually introduce new products and services in response to
technological changes, evolving industry standards and customer demands for
enhancements to our existing products and services. We will not be able to
increase our revenue if we are unable to develop new products and services, or
if we experience delays in the introduction of new products and services, or if
our new products and services do not achieve market acceptance. Our ability to
successfully develop and market new products and services and enhancements that
respond to technological changes, evolving industry standards or customer
demands, is dependent on our ability to:
. anticipate changes in industry standards;
. anticipate and apply advances in technologies;
. enhance our software, applications, platforms, systems and networks;
. attract and retain qualified and creative technical personnel;
. develop effective marketing, pricing and distribution strategies for new
products and services; or
. avoid difficulties that could delay or prevent the successful
development, introduction and marketing of new products and services or
enhancements.
We are subject to pricing pressures for our products and services, which could
cause us to lose market share and revenue.
We compete for consumers based on price. A decrease in the rates charged for
communications services by our competitors could cause us to reduce the rates
we charge for our products and services. If we cannot compete based on price,
we may lose market share. If we reduce our rates without increasing our margins
or our market share, our revenue could decrease.
Consolidation in the telecommunications industry could lead to pricing pressure
on our products and services and could be disruptive to our licensing and
strategic relationships.
The telecommunications industry has experienced, and we believe it will
continue to experience, consolidation. For example, WorldCom, a strategic
partner of ours, merged with MCI Communications Corp., a competitor of ours
with respect to some services, to form MCI WorldCom. In addition, MCI WorldCom
has announced a merger with Sprint Corporation, a competitor of ours with
respect to some services. Consolidation in the telecommunications industry,
including consolidations involving our customers, competitors, strategic
partners and licensing partners, could lead to pricing pressure on our products
and services and could be disruptive to our licensing and strategic
relationships.
Risks Related to Our Company
One of our growth strategies is to make investments and form alliances with
early-stage companies involved in emerging technologies, and these investments
may not be successful.
Part of our growth strategy is to make equity investments in companies
involved in emerging technologies. These equity investments allow us to develop
marketing and strategic alliances, which serve as an important vehicle through
which we market our own Web-enabled services, such as Orchestrate. We made
investments of approximately $8.3 million in 1998 and $10.1 million in 1999 to
acquire initial equity interests, or increase existing equity interests, in
companies engaged in emerging technologies. Since many of the companies in
which we make investments are small, early-stage companies, our investments are
subject to the significant risks faced by these companies, which could result
in the loss of our investment.
5
<PAGE>
We may not have opportunities to acquire equity interests in additional
companies, which could impede our growth strategy.
Our equity investments, which are typically made through or held by a
subsidiary, have significant value on a stand-alone basis. In the future, we
may not be able to identify companies that complement our strategy, and even if
we identify a company that complements our strategy, we may not be able to
acquire an interest in the company. If we cannot acquire equity interests in
attractive companies, our growth strategy may not succeed. We may not be able
to acquire equity interests in attractive companies for many reasons,
including:
. a failure to agree on the terms of the acquisition, such as the amount
or price of our acquired interest;
. incompatibility between us and management of the company;
. competition with other investors to make equity investments in the same
company;
. a lack of capital to acquire an interest in the company; and
. the unwillingness of the company to enter into a strategic agreement
with us or to provide us with an equity interest.
We may be unable to obtain maximum value for our equity investments.
We have significant positions in several public and private companies,
including Healtheon/WebMD Corporation, S1 Corporation, USA.NET, Inc., Webforia,
Inc. and Derivion Corporation. We may from time to time monetize all or a
portion of these investments to provide working capital or for other business
purposes. For example, in December 1999 we monetized a significant portion of
our Healtheon/WebMD holdings to repay our revolving credit facility. If we
divest all or part of any equity interest, we may not receive maximum value for
our position. For equity investments in publicly traded stock, we may be unable
to sell our interests at then quoted market prices. Furthermore, for those
equity interests that are not publicly traded, the realizable value of our
interest may ultimately prove to be lower than the carrying value currently
reflected in our consolidated financial statements.
The value of our business may fluctuate because the value of some of our equity
investments fluctuates.
A portion of our assets includes the equity securities of both publicly
traded and non-publicly traded companies. In particular, we own a significant
number of shares of common stock of Healtheon/WebMD and S-1 Corporation, which
are publicly traded companies. The market price and valuations of the
securities that we hold in these and other companies may fluctuate due to
market conditions and other conditions over which we have no control.
Fluctuations in the market price and valuations of the securities that we hold
in other companies may result in fluctuations of the market price of our common
stock and may reduce the amount of working capital we have available.
We may incur significant costs and may be forced to make disadvantageous
business decisions to avoid investment company status, and we may suffer
adverse consequences if we are deemed to be an investment company.
We may incur significant costs and may be forced to make disadvantageous
business decisions to avoid investment company status. For example, we may be
forced to forego attractive investment opportunities or we may have to dispose
of investments before we might otherwise do so in order to avoid investment
company status. Furthermore, we may suffer other adverse consequences if we are
deemed to be an investment company under the Investment Company Act of 1940.
Some investments made by us may constitute investment securities under the 1940
Act. In some instances, a company may be deemed to be an investment company if
it owns investment securities with a value exceeding 40% of its total assets,
subject to various exclusions. In other instances, a company may be deemed to
be an investment company if more than 45% of its total assets consists of, and
more than 45% of its net income after taxes attributable to it over the last
four quarters is derived from, ownership interests in companies it does not
control, subject to various exclusions. Investment companies are subject to
registration under, and compliance with, the 1940 Act, unless a particular
exclusion or
6
<PAGE>
safe harbor applies. If we are deemed to be an investment company and we
register as one with the SEC, we would become subject to the requirements of
the 1940 Act. As a consequence, we could be prohibited from engaging in
business or issuing our securities in the manner we have in the past. If we are
deemed to be an unlawfully unregistered investment company, we might be subject
to civil and criminal penalties. In addition, some of our contracts might be
voidable, and a court appointed receiver could take control of us and liquidate
our business.
If we cannot implement a plan to segregate our Web-related assets and develop
strategic partnership and alliances, we may not be able to implement our growth
strategy.
On October 28, 1999, we announced that we are developing plans to segregate
our Web-related assets in stand-alone entities for which we will seek strategic
partnerships and other strategic alliances. We currently have no specific
plans, agreements or commitments with respect to the segregation of our Web-
related assets, or any strategic partnerships or alliances with respect to
those assets. Moreover, we may not be able to identify suitable strategic
partners or alliances with respect to our Web-related assets. Even if we
identify suitable strategic partners and alliances, we may not be able to
negotiate or consummate any particular partnership or alliance. If we cannot
implement a plan to segregate our Web-related assets and develop strategic
partnership and alliances, we may not be able to implement our growth strategy.
If our strategic relationships are not successful we may not be able to
increase our sales and revenue.
A principal element of our strategic plan is the creation and maintenance of
strategic relationships that will enable us to offer our products and services
to a larger customer base than we could otherwise reach through our direct
marketing efforts. Examples of our strategic partners include MCI WorldCom,
Healtheon/WebMD and Webforia. Failure of one or more of our strategic partners
to successfully develop and sustain a market for our services, or the
termination of one or more of our relationships with a strategic partner, could
hinder our ability to increase our sales and our revenue. Although we view our
strategic relationships as a key factor in our overall business strategy and in
the development and commercialization of our products and services, our
strategic partners may not view their relationships with us as significant for
their own businesses and any one of them could reassess their commitment to us
in the future. Our arrangements with our strategic partners do not always
establish minimum performance requirements for our strategic partners, but
instead rely on the voluntary efforts of these partners in pursuing joint
goals. Some of these arrangements prevent us from entering into strategic
relationships with other companies in the same industry as our strategic
partners, either for specified periods of time or while the arrangements remain
in force. In addition, even when we are without contractual restrictions, we
may be restrained by business considerations from pursuing alternative
arrangements. The ability of our strategic partners to incorporate our products
and services into successful commercial ventures will require us, among other
things, to continue to successfully enhance our existing products and services
and develop new ones. Our inability to meet the requirements of our strategic
partners or to comply with the terms of our strategic partner arrangements
could result in our strategic partners failing to market our services, seeking
alternative providers of communications and information services or canceling
their contracts with us.
If our strategic relationship with MCI WorldCom is not successful we may not be
able to increase our sales and our revenue.
In November 1996, we entered into a strategic alliance agreement with
WorldCom, now known as MCI WorldCom, whereby MCI WorldCom is required, among
other things, to provide us with the right of first opportunity to provide
enhanced computer telephony services for a period of at least 25 years. In
connection
with this agreement, we issued to MCI WorldCom 2,050,000 shares of common stock
valued at approximately $25.2 million and paid MCI WorldCom $4.7 million in
cash. We recorded the value of this agreement as an intangible asset. If this
strategic relationship is not successful it could hinder our ability to
increase our sales and our revenue. Subsequent to entering into this strategic
alliance agreement, WorldCom merged with MCI, a competitor of ours with respect
to same services, to form MCI WorldCom. The minimum payment levels under
7
<PAGE>
the strategic alliance agreement ceased at the end of September 1998 and
current activity levels are significantly below those prior minimums. In
addition, in June 1999, we filed a lawsuit against MCI WorldCom alleging breach
of this strategic alliance agreement. This lawsuit has been stayed pending
arbitration. See "Risks Related to Pending Litigation-Our pending litigation
could be costly, time consuming and a diversion to management and, if adversely
determined, could result in the loss of rights or substantial liabilities for
damages." We periodically review this intangible asset for impairment and in
1998 we wrote down the carrying value of the MCI WorldCom strategic alliance
intangible asset by approximately $13.9 million. In addition, we accelerated
amortization of the remaining carrying value of the asset starting in the
fourth quarter of 1998 by shortening its estimated remaining useful life to
three years from 23 years.
Financial difficulties of our strategic partners or licensees could adversely
impact our earnings.
The majority of companies that have chosen to outsource their communications
services to us are small or medium-sized telecommunications companies that may
be unable to withstand the intense competition in the telecommunications
industry. If any of our strategic partners or licensees suffer financial
difficulties, it could hurt our financial performance and adversely impact our
earnings. For example, during the second quarter of 1998, a licensing customer
and a strategic partner in our enhanced calling services group initiated
proceedings under Chapter 11 of the U.S. Bankruptcy Code. We recorded
approximately $8.4 million of charges in the second quarter of 1998 associated
with uncollectible accounts receivable, primarily related to these financially
distressed customers. The financial difficulties of these two customers, as
well as revenue shortfalls in the voice and data messaging group and other
unanticipated costs and one-time charges, contributed to an after tax loss for
the second quarter of 1998.
Our future success depends on market acceptance of our unified messaging
products and services, which includes Orchestrate.
Market acceptance of unified messaging products and services generally
requires that individuals and enterprises accept new ways of communicating and
exchanging information. A decline in the demand for, or the failure to achieve
broad market acceptance of, our unified messaging products and services could
hinder our ability to maintain and increase our revenue. We believe that broad
market acceptance of our unified messaging products 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.
If we do not met these challenges, our unified messaging products and services,
including Orchestrate, may not achieve broad market acceptance or market
acceptance may not occur quickly enough to justify our investment in these
products and services.
8
<PAGE>
Concerns regarding security of transactions and transmitting confidential
information over the Internet may have an adverse impact on the market
acceptance of our Web-enabled products and services, including Orchestrate.
We believe the concern regarding the security of confidential information
transmitted over the Internet prevents many potential customers from using
Internet related products and services. If our Web-enabled services, such as
Orchestrate, do not include sufficient security features, our Web-enabled
products and services may not gain market acceptance, or there may be
additional legal exposure. Despite the measures we have taken, our
infrastructure is potentially vulnerable to physical or electronic break-ins,
viruses or similar problems. If a person circumvents our security measures, he
or she could misappropriate proprietary information or cause interruption in
our operations. Security breaches that result in access to confidential
information could damage our reputation and expose us to a risk of loss or
liability. We may be required to make significant investments in efforts to
protect against a remedy of these types of security breaches. Additionally, as
electronic commerce becomes more widespread, our customers will become more
concerned about security. If we are unable to adequately address these
concerns, we may be unable to sell our Web-enabled products and services.
If our quarterly results do not meet the expectations of public market analysts
and investors our stock price may decrease.
Quarterly revenue is difficult to forecast because the market for our
services is rapidly evolving. Our expense levels are based, in part, on our
expectations as to future revenue. If revenue levels are below expectations, we
may be unable or unwilling to reduce expenses proportionately and operating
results would likely be adversely affected. As a result, we believe that
period-to-period comparisons of our 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
our operating results will be below the expectations of public market analysts
and investors. In this event, the market price of our common stock will likely
decline.
Our operating results have varied significantly in the past and may vary
significantly in the future. Specific factors that may cause our future
operating results to vary include:
. the unique nature of strategic relationships into which we may enter in
the future;
. changes in operating expenses resulting from our strategic relationships
and other factors;
. the financial performance of our strategic partners;
. the performance of strategic equity investments;
. the timing of new product and service announcements;
. market acceptance of new and enhanced versions of our products and
services, including Orchestrate;
. the success or failure of past or potential future acquisitions;
. changes in legislation and regulations that may affect the competitive
environment for our products and services; and
. general economic and seasonal factors.
In the future, revenue from our strategic investments and strategic
relationships may become an increasingly significant portion of our total
revenue. Due to the unique nature of each strategic investment and
relationship, these investments and relationships may change the mix of our
expenses relative to our revenue.
9
<PAGE>
If we are not able to expand our document distribution services, it may
adversely affect customer relationships and perceptions of our business in the
markets in which we provide document distribution services.
We intend to accelerate growth of our document distribution services
throughout the world by expansion of our proprietary private worldwide document
distribution network and the acquisition of entities engaged in the business of
document distribution services. We may not be able to expand our ability to:
. provide document distribution services at a rate or in a manner
satisfactory to meet the demands of existing or future customers;
. increase the capacity of our document distribution network to process
increasing amounts of document traffic;
. integrate and increase the capability of our document distribution
network to perform tasks required by our customers; or
. identify and establish alliances with new partners in order to enable us
to expand our document distribution network into new geographic regions.
If we are not able to accomplish these things it could adversely affect
customer relationships and perceptions of our business in the markets in which
we provide document distribution services. In addition, this growth will
involve substantial investments of capital, management and other resources. We
may not generate sufficient cash for future growth of our document distribution
business through earnings or external financings, and external financings may
not be available on terms acceptable to us. Further, we may not be able to
employ any of these resources in a manner that will result in accelerated
growth.
We do not typically have long-term contractual agreements with our customers
and our customers may not transact business with us in the future.
We expect 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
our technologies. We do not typically have long-term contractual agreements
with our customers, and our customers may not continue to transact business
with us in the future if:
. our products and services become obsolete;
. competitors develop products and services that are more sophisticated,
efficient or cost-effective; or
. technological advances allow our customers to satisfy their own
telecommunications needs.
We rely on Amway Corporation for significant revenue and any loss of business
from Amway may hurt our financial performance and cause our stock price to
decline.
We have historically relied on sales through Amway Corporation for a
substantial portion of our revenue. Sales to Amway accounted for approximately
23.7% of our revenue in 1996, 21.8% in 1997, 9.4% in 1998 and 7.0% in the first
nine months of 1999. Although total revenue from Amway has decreased
significantly, Amway remains a significant customer. Our relationship with
Amway and its distributors may not continue at historical levels, and there is
no long-term price protection for services provided to Amway. Continued loss in
total revenue from Amway or diminution in the Amway relationship, or a decrease
in average sales price without an offsetting increase in volume, could hurt our
financial performance and cause our stock price to decline. We have entered
into a service and reseller agreement with Amway providing, among other things,
for the sale of voice messaging and network transmission services on an
exclusive basis to Amway in the U.S., Canada, New Zealand and Australia for
resale by Amway to its independent distributors. 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 bind the Amway
distributors to use our services, and they are free to acquire messaging
services from alternative vendors. As a result, if Amway recommends a voice
10
<PAGE>
messaging and network transmission services provider other than ours, Amway's
distributors may follow this recommendation. Amway has sold substantially all
of the common stock of Premiere that it received when we acquired Voice-Tel
Enterprises, Inc. and its related entities and franchisees in 1997. The sale of
our stock by Amway may increase the possibility that Amway will recommend a
voice messaging and network transmission services provider other than us.
If we do not attract and retain highly qualified and creative technical
personnel we may not be able to sustain or grow our business.
We believe that to be successful we must hire and retain highly qualified
and creative engineering and product development personnel. Competition in the
recruitment of highly qualified and creative personnel in the information and
telecommunications services industry is intense. We have in the past
experienced, and we expect to continue to experience, difficulty in hiring and
retaining highly skilled technical employees with appropriate qualifications.
We may not be able to retain our key technical employees and we may not be able
to attract qualified personnel in the future. If we are not able to locate,
hire and retain qualified technical personnel, we may not be able to sustain or
grow our business.
Our business may suffer if we do not retain the services of our chief executive
officer.
We believe that our continued success will depend to a significant extent
upon the efforts and abilities of Boland T. Jones, our Chairman and Chief
Executive Officer. The familiarity of Mr. Jones with the markets in which we
compete and emerging technologies, such as the Internet, makes him especially
critical to our success. Mr. Jones has entered into an employment agreement,
which expires in December 1999, and a new agreement is being negotiated. We
maintain key man life insurance on Mr. Jones in the amount of $3.0 million.
Downtime in our network infrastructure could result in the loss of significant
customers.
We currently maintain switching facilities and computer telephony platforms
in approximately 300 locations throughout the world. The delivery of our
products and services is dependent, in part, upon our ability to protect the
equipment and data at our switching facilities against damage that may be
caused by fire, power loss, technical failures, unauthorized intrusion, natural
disasters, sabotage and other similar events. Despite taking a variety of
precautions, we have experienced downtime in our networks from time to time and
we may experience downtime in the future. These types of service interruptions
could result in the loss of significant customers, which could cause us to lose
revenue. We take substantial precautions to protect ourselves and our customers
from events that could interrupt delivery of our services. These precautions
include physical security systems, uninterruptible power supplies, on-site
power generators, upgraded backup hardware, fire protection systems and other
contingency plans. In addition, some of our networks are designed so that the
data on each network server is duplicated on a separate network server. We also
maintain business interruption insurance providing for aggregate coverage of
approximately $86.1 million per policy year. However, we may not be able to
maintain this insurance in the future, it may not continue to be available at
reasonable prices, and it may not be sufficient to compensate us for losses
that we experience due to our inability to provide services to our customers.
We may lose revenue or incur additional costs because of failure to adequately
address the Year 2000 problem.
It is possible that a portion of our currently installed computer systems,
software products, billing systems, computer telephony platforms, networks,
databases or other business systems, all of which we refer to as our "systems",
or those of our 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 2000 or beyond without
11
<PAGE>
error or interruption. This is commonly known as the Year 2000 problem.
Although we have not experienced any material Year 2000 problems, the Year 2000
problem remains an issue at least through February 29, 2000 when the leap year
must be properly handled by our systems and those of our customers, vendors and
resellers. We may not have yet identified all the Year 2000 problems in our
systems and we may not be able to successfully remedy any problems that have
been or may subsequently be discovered. Furthermore, our customers, vendors,
and resellers, including network transmission providers, may not have yet
identified all of the Year 2000 problems in their systems, and may not be able
to successfully remedy any problems that have been or may subsequently be
discovered. In particular, we are dependent upon third parties for transmission
of our telephone calls and other communications and these third party providers
may not have yet identified or remedied Year 2000 problems in their
transmission facilities. Our efforts to identify and address these problems and
the expenses or liabilities to which we may be subject as a result of these
problems could be costly. In addition, any failure of the transmission
facilities of third party providers could result in the interruption of our
services, which could result in the loss of customers and revenue. The
financial stability of existing customers may be adversely impacted by Year
2000 problems, which could also have an adverse impact on our revenue. In
addition, any failure by us to identify and remedy Year 2000 problems could put
us at a competitive disadvantage relative to companies that have corrected Year
2000 problems.
If or our frame relay network architecture becomes obsolete, we may have to
invest significant capital to upgrade or replace our private frame relay
network.
We made a significant investment in a private frame relay network when we
acquired Voice-Tel in 1997. A frame relay network is a telecommunications
network that uses packet switching to transmit data through the network and
relies on high quality phone lines to minimize errors. There are alternative
network architectures, which are the structures and protocols of any computer
network, including circuit switched networks and emerging broadband networks.
Moreover, technological advances may lead to the development of additional
network architectures. If the telecommunications industry standardizes on an
architecture other than frame relay or our private frame relay network becomes
obsolete, we would need to invest significant capital to upgrade or replace our
private frame relay network.
If we fail to predict growth in our network usage and add needed capacity, then
the quality of our service offerings may suffer.
At network usage grows, we will need to add capacity to our platforms, our
switching facilities and our private frame relay network. This means that we
continuously attempt to predict growth in our network usage and add capacity
accordingly. If we do not accurately predict and efficiently manage growth in
our network usage, the quality of our service offerings may suffer and we may
lose customers.
Software failures or errors may result in failure of our platforms and/or
networks, which could result in increased costs and lead to interruptions in
our services and losses of significant customers and revenue.
The software that we have developed and utilized in providing our products
and services, including the Orchestrate software, may contain undetected
errors. Although we generally engage in extensive testing of our software prior
to introducing the software onto any of our networks and/or platforms, errors
may be found in the software after the software goes into use. Any of these
errors may result in partial or total failure of our networks, 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 customers to use our networks or the cancellation of services by
significant customers. We maintain technology errors and omissions insurance
coverage of $35.0 million per policy aggregate. However, we may not be able to
maintain this insurance or it may not continue to be available at reasonable
prices. Even if we maintain this insurance, it may not be sufficient to
compensate us for losses we experience due to our inability to provide services
to our customers.
12
<PAGE>
Interruption in long distance telecommunications services could result in
service interruptions and a loss of significant customers and revenue.
Our ability to maintain and expand our business depends, in part, on our
ability to continue to obtain telecommunication services on favorable terms
from long distance carriers. We do not own a transmission network. As a result,
we depend on MCI WorldCom, AT&T, Teleglobe Inc. and Cable & Wireless, and other
facilities-based and non-facilities based carriers for transmission of our
customers' long distance calls. These long distance telecommunications services
generally are procured under supply agreements with multiyear terms. These
supply agreements are subject to various early termination penalties and
minimum purchase requirements. We have not experienced significant losses in
the past due to interruptions of long-distance service, but we might experience
these types of losses in the future.
The partial or total loss of our ability to receive or terminate telephone
calls could result in service interruptions and a loss of significant customers
and revenue.
We depend on local phone companies that provide local transmission services,
known as local exchange carriers, as well as companies that purchase and resell
local transmission services, known as competitive local exchange carriers, for
call origination and termination. The partial or total loss of the ability to
receive or terminate calls could result in service interruptions and a loss of
significant customers and revenue. We have not experienced significant losses
in the past due to interruptions of service at terminating carriers, but we
might experience these types of losses in the future.
If we have to relocate our hub equipment or change our network transmission
provider, we could experience interruptions in our services and increased
costs, which could cause us to lose customers.
We lease capacity on the MCI WorldCom backbone to provide connectivity and
data transmission within our private frame relay network. Our
telecommunications agreement with MCI WorldCom expires in September 2000. Our
hub equipment is co-located at various MCI WorldCom sites under co-location
agreements that are terminable by either party upon 30 days written notice. Our
ability to maintain network connectivity is dependent upon our access to
transmission facilities provided by MCI WorldCom or an
alternative provider. We may not be able to continue our relationship with MCI
WorldCom beyond the terms of our current agreements and we may not be able to
find an alternative provider on terms as favorable as those offered by MCI
WorldCom or on any other terms. If we have to relocate our hub equipment or
change our network transmission provider, we could experience interruptions in
our service and/or increased costs, which could adversely effect our customer
relationships and customer retention.
Any significant difficulty obtaining voice messaging equipment could lead to
interruption in service and loss of customers and revenue, and technological
obsolescence of our voice messaging equipment could result in substantial
capital expenditures.
We do not manufacture voice messaging equipment used at our voice messaging
service centers, and this equipment is currently available from a limited
number of sources. Although we have not historically experienced any
significant difficulty in obtaining equipment required for our operations and
believe that viable alternative suppliers exist, shortages may arise in the
future or alternative suppliers may not be available. Our inability to obtain
voice messaging equipment in the future could result in delays or reduced
delivery of messages, which could lead to a loss of customers and revenue. In
addition, technological advances may result in the development of new voice
messaging equipment and changing industry standards, which could cause our
voice messaging equipment to become obsolete. These events could require us to
invest significant capital in upgrading or replacing our voice messaging
equipment.
13
<PAGE>
Returned transactions or thefts of services could lead to a loss of revenue,
and could adversely effect customer relationships and perceptions of our
business in the markets in which we do business.
If our internal controls, risk management practices and bad debt reserve
practices are not adequate, returned transactions, unauthorized transactions or
thefts of services could lead to a loss of revenue, and could adversely effect
customer relationships and perceptions of our business in the markets in which
we do business.
We use two principal financial payment clearance systems in connection with
our enhanced calling services: the Federal Reserve's Automated Clearing House
for electronic fund transfers; and the national credit card systems for
electronic credit card settlement. In our use of these established payment
clearance systems, we generally bear 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. We could experience
material revenue losses due to these types of returned transactions.
From time to time, persons have gained unauthorized access to our network
and obtained services without rendering payment to us by unlawfully using the
access numbers and personal identification numbers of authorized users. In
addition, in connection with our wholesale prepaid telephone card
relationships, we have experienced unauthorized activation of prepaid telephone
cards. We could experience material revenue losses due to unauthorized use of
access numbers and personal identification numbers, unauthorized activation of
prepaid calling cards, activation of prepaid calling cards in excess of the
prepaid amount, or theft of prepaid calling cards.
We attempt to manage these risks through our internal controls and
proprietary billing systems. Our computer telephony platform is designed to
prohibit a single access number and personal identification number from
establishing multiple simultaneous connections to the platform, and generally
we establish preset spending limits for each subscriber. We also maintain
reserves for these risks. However, past experience in estimating and
establishing reserves and our historical losses are not necessarily accurate
indicators of future losses or the adequacy of the reserves we may establish in
the future.
Our debt could harm our liquidity and our ability to obtain additional
financing, and could make us more vulnerable to economic downturns and
competitive pressures.
In 1997, we incurred $172.5 million in indebtedness by issuing convertible
notes to the public. We have significant interest payment obligations as result
of these convertible notes. Our debt could inhibit our ability to obtain
additional financing for working capital, acquisitions or other purposes and
could make us more vulnerable to economic downturns and competitive pressures.
Our debt could also harm our liquidity, because a substantial portion of
available cash from operations may have to be applied to meet debt service
requirements. In the event of a cash shortfall, we could be forced to reduce
other expenditures and forego potential acquisitions and investments to be able
to meet these debt repayment requirements.
An increase in the rate of amortization of goodwill or other intangible assets
or future write-downs could cause our financial performance to suffer in future
periods.
As of September 30, 1999, we had approximately $464.0 million of goodwill
and other intangible assets reflected on our financial statements. We are
amortizing the goodwill and other intangibles over a range of periods we
believe appropriate for the assets. If the amortization period for any of these
assets is accelerated due to a reevaluation of the useful life of these assets
or for any other reason, amortization expense may initially increase on a
quarterly basis or require a write-down of the goodwill or other intangible
assets, which could cause our financial performance to suffer in future
quarters.
14
<PAGE>
Our articles of incorporation and bylaws and Georgia corporate law may inhibit
a takeover, which may not be in the interests of shareholders.
There are several provisions in our articles of incorporation and bylaws and
Georgia corporate law that may inhibit a takeover, even when a takeover may be
in the interests of our shareholders. For example, our board of directors is
empowered to issue preferred stock without shareholder action. The existence of
this "blank-check" preferred stock could render more difficult or discourage an
attempt to obtain control of Premiere by means of a tender offer, merger, proxy
contest or otherwise. Our articles of incorporation also divide the board of
directors into three classes, as nearly equal in size as possible, with
staggered three-year terms. The classification of the board of directors could
make it more difficult for a third party to acquire control of Premiere because
only one-third of the board is up for election each year. We are also subject
to provisions of the Georgia Business Corporation Code that relate to business
combinations with interested shareholders, which can serve to inhibit a
takeover. In addition to considering the effects of any action on us and our
shareholders, our articles of incorporation permit our board of directors and
the committees and individual members of the board to consider the interests of
various constituencies, including employees, customers, suppliers, and
creditors, communities in which we maintain offices or operations, and other
factors which they deem pertinent, in carrying out and discharging their duties
and responsibilities and in determining what is believed to be our best
interests.
Our rights plan may also inhibit a takeover, which may not be in the interests
of shareholders.
In June 1998, our board of directors declared a dividend of one preferred
stock purchase right for each outstanding share of common stock. Each right
entitles the registered holder to purchase one one-thousandth of a share of
Series C junior participating preferred stock at a price of sixty dollars per
one-thousandth of a Series C preferred share, subject to adjustment. The rights
may have anti-takeover effects because they will cause substantial dilution to
a person or group that attempts to acquire us on terms not approved by our
board of directors. However, the rights should not interfere with any merger,
statutory share exchange or other business combination approved by the board of
directors since the rights may be terminated by the board of directors at any
time on or prior to the close of business ten business days after announcement
by us that a person has become an acquiring person. The rights are intended to
encourage persons who may seek to acquire control of us to initiate an
acquisition through negotiations with the board of directors. However, the
effect of the rights may be to discourage a third party from making a partial
tender offer or otherwise attempting to obtain a substantial equity position in
the equity securities of, or seeking to obtain control of, us.
Risks Related to Past Acquisitions
If we cannot successfully integrate and consolidate the operations of acquired
businesses into our operations, we may not realize sufficient cost savings and
economies-of-scale.
We are continuing to integrate the operations of several businesses acquired
in 1997 and 1998 by attempting to eliminate duplicative and unnecessary costs.
The successful integration and consolidation of the operations of acquired
businesses into our operations is critical to our future performance. If we
cannot successfully integrate and consolidate the operations of acquired
businesses with our operations on schedule or at all, these acquisitions may
not result in sufficient cost savings or economies-of-scale and operational
synergies may not develop. Potential challenges to the successful integration
and consolidation of the operations of acquired businesses include:
. consolidation of service centers and work forces;
. elimination of unnecessary costs; and
. integration and retention of new personnel.
15
<PAGE>
If we cannot successfully integrate technologies, products, services and
systems from acquired businesses with ours, we may not generate sufficient
revenue and operational synergies may not develop.
We are continuing to integrate previously acquired technologies, products,
service offerings and systems with ours. We have experienced and may continue
to experience difficulty integrating incompatible systems of acquired
businesses into our networks. As a result, our integration plans may materially
change in the future. If we cannot successfully integrate technologies,
products, services and systems from acquired businesses with ours, we may not
generate sufficient revenue and operational synergies may not develop.
Challenges to the successful integration of acquired technologies, products,
service offerings and systems include:
. localization of our products and services;
. integration of technologies, platforms and networks;
. cross-selling of products and services to our customer base and customer
bases of acquired businesses; and
. compliance with regulatory requirements.
If we do not properly manage the growth we have experienced through
acquisitions, our administrative, technical and financial resources may be
strained, which could cause the quality of our products and services to suffer.
We have experienced substantial growth in revenue and personnel in recent
years, particularly in 1997 and early 1998, a substantial portion of which has
been accomplished through our acquisitions of Voice-Tel Enterprises, Inc. and
its related entities and franchisees, VoiceCom Systems, Inc., Xpedite Systems,
Inc. and American Teleconferencing Services Ltd. Our growth through
acquisitions has placed significant demands on all aspects of our business,
including our administrative, technical, and financial personnel and systems.
Additional expansion may further strain our administrative, technical,
financial, management and other resources. Our systems, procedures, controls
and existing space may not be adequate to support expansion of our operations.
If we are unable to do this, then the quality of our services may suffer, which
will make it difficult to grow or maintain our market share in the markets in
which we compete.
Risks Related to Possible Future Acquisitions
We intend to pursue future acquisitions and we may face risks in acquiring and
integrating other businesses, products and technologies.
We intend to pursue future acquisitions of businesses, products and
technologies that we believe will complement our business. As a result, we
regularly evaluate acquisition opportunities, frequently engage in acquisition
discussions, conduct due diligence activities in connection with possible
acquisitions, and, where appropriate, engage in acquisition negotiations. We
may not be able to successfully identify suitable acquisition candidates,
complete acquisitions, integrate acquired operations into our existing
operations or expand into new markets. In addition, we compete for acquisitions
and expansion opportunities with companies that have substantially greater
resources and competition with these companies for acquisition targets could
result in increased prices for possible targets. Acquisitions also involve
numerous additional risks to the company and investors, including:
. difficulties in the assimilation of the operations, services, products
and personnel of the acquired company;
. the diversion of our management's attention from other business
concerns;
. entry into markets in which we have little or no direct prior
experience;
. potentially dilutive issuances of equity securities;
16
<PAGE>
. the assumption of known and unknown liabilities; and
. adverse financial impact from the write-off of software development
costs and the amortization of expenses related to goodwill and other
intangible assets.
If we fail to assimilate and retain key employees of future businesses we
acquire, it could jeopardize the success of the acquisition.
Assimilation and retention of the key employees of an acquired company are
generally important to the success of an acquisition. If we fail to assimilate
and retain any key employees of any business we acquire, the acquisition may
not result in revenue growth, operational synergies or product and service
enhancements, which could jeopardize the success of the acquisition.
Future acquisitions may involve restructuring and other special charges, which
may cause our financial performance to suffer during the period in which the
charge is taken.
We have taken, and in the future may take, charges in connection with
acquisitions, which may cause our financial performance to suffer during the
period in which the charge is taken. In addition, the costs and expenses
incurred may exceed the estimates upon which these charges are based. During
the second quarter of 1997, we took a pre-tax charge of approximately $45.4
million in connection with the acquisition of Voice-Tel. During the third
quarter of 1997, we took a pre-tax charge of approximately $28.2 million in
connection with the acquisition of VoiceCom. We also recorded restructuring and
other special charges before income taxes of approximately $7.5 million in
connection with the acquisition of Xpedite.
Risks Related to Intellectual Property
We may not be able to protect our proprietary technology and intellectual
property rights, which could result in the loss of our rights or increased
costs.
We rely primarily on a combination of intellectual property laws and
contractual provisions to protect our proprietary rights and technology, brand
and marks. These laws and contractual provisions provide only limited
protection of our proprietary rights and technology. If we are not able to
protect our intellectual property and our proprietary rights and technology, we
could lose those rights and incur substantial costs policing and defending
those rights. Our proprietary rights and technology include confidential
information and trade secrets that we attempt to protect through
confidentiality and nondisclosure provisions in our licensing, services,
reseller and other agreements. We typically attempt to protect our 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. Our means of protecting our
intellectual property, proprietary rights and technology may not be adequate
and our competitors may independently develop similar technology. In addition,
the laws of some foreign countries do not protect our proprietary rights to as
great an extent as the laws of the U.S. Furthermore, some of our systems, such
as our receiving, queuing, routing and other systems logic and architecture in
our document distribution business are not proprietary and, as a result, this
information may be acquired or duplicated by existing and potential
competitors.
If claims alleging patent, copyright or trademark infringement are brought
against us and successfully prosecuted against us, it could result in the
substantial costs.
Many patents, copyrights and trademarks have been issued in the general
areas of information services and telecommunications, computer telephony, the
Internet and unified messaging. From time to time, in the ordinary course of
our business, we have been and expect to continue to be, subject to third party
claims that our current or future products or services infringe the patent,
copyright or trademark rights or other intellectual property rights of third
parties. Claims alleging patent, copyright or trademark infringement may be
brought against us with respect to current or future products or services. If
these types of actions or claims are brought
17
<PAGE>
we may not ultimately prevail and any claiming parties may have significantly
greater resources than we have to pursue litigation of these types of claims.
Any infringements claims, whether with or without merit, could:
. be time consuming and a diversion to management;
. result in costly litigation;
. cause delays in introducing new products and services or enhancements,
. result in costly royalty or licensing agreements; or
. cause us to discontinue use of the challenged technology, tradename or
service mark at potentially significant expense associated with the
marketing of a new name or the development or purchase of replacement
technology.
Examples of prior and current infringement claims include the following:
In October 1996, one of our subsidiaries received a letter from a third
party claiming that aspects of our subsidiary's voice messaging products and
services may be infringing upon one or more of the third party's patents. We
have reviewed the patent claims of this third party and we do not believe that
any of our subsidiary's products or services infringe on the claims of the
third party. No patent infringement claims have been filed against us by the
third party at this time. Should this third party file patent infringement
claims against us, we believe that we would have meritorious defenses to those
claims. However, due to the inherent uncertainties of litigation, we are unable
to predict the outcome of any potential litigation with the third party, and
any adverse outcome could have a material adverse effect on our business,
results of operations and financial condition. Even if we were to ultimately
prevail, our business could be adversely affected by the diversion of
management attention and litigation costs. Because of this risk, we withheld in
escrow approximately 123,000 shares of our common stock from the purchase price
paid to acquire one of our voice messaging subsidiaries. This escrow
arrangement terminates in April 2000. This escrow may not be sufficient to
fully cover our exposure in the event of litigation or an adverse outcome to
the potential infringement claims.
In February 1997, we entered into a long-term nonexclusive license agreement
with AudioFAX IP LLC settling a patent infringement suit filed by AudioFAX in
June 1996. Effective April 1, 1998, this initial license agreement was amended
to include Xpedite within the coverage of the license. In September 1997, one
of our subsidiaries also entered into a long-term non-exclusive license
agreement with AudioFAX.
Prior to its acquisition by us, Xpedite received a letter from Cable &
Wireless, Inc. informing Xpedite that Cable & Wireless had received a demand
letter from AudioFax claiming that some Cable & Wireless products and services
infringed AudioFax's patent rights. Cable & Wireless initially sought
indemnification from Xpedite for this claim. Subsequent to our acquisition of
Xpedite, Cable & Wireless notified us of the AudioFax claim and sought
indemnification directly from us. We have requested, but as yet are without,
sufficient information to evaluate the merits of this claim and we are unable
at this time to predict the outcome of this matter.
In 1999, we received separate letters from Ronald Katz, Aerotel
Limited/Aerotel USA, Inc. and Cable & Wireless informing us of the existence of
their respective patents or patent portfolios and the potential applicability
of those patents on our products and services. We are currently considering
each of these matters.
However, we currently lack sufficient information to assess the potential
outcomes of these matters. Due to the inherent uncertainties of litigation,
however, we are unable to predict the outcome of any potential litigation, and
any adverse outcome could have a material effect on our business, financial
condition and results of operations. Even if we were to prevail in this type of
a challenge, our business could be adversely affected by the diversion of
management attention and litigation costs.
18
<PAGE>
Risks Related to Pending Litigation
Our pending litigation could be costly, time consuming and a diversion to
management and, if adversely determined, could result in the loss of rights or
substantial liabilities for damages.
In the ordinary course of our business, we are subject to a variety of
claims and litigation from third parties, including allegations that our
products and services infringe the patents, trademarks and copyrights of these
third parties. We have several litigation matters pending, which we are
defending vigorously. Due to the inherent uncertainties of the litigation
process and the judicial system, we cannot predict the outcome of these
litigation matters. Regardless of the outcome, these litigation matters could
be costly, time consuming and a diversion of management and other resources. If
the outcome of one or more of these matters is adverse to us, it could result
in a loss of material rights or substantial liabilities for damages.
Our material pending litigation matters include the following:
We and some of our officers and directors have been named as defendants in
multiple shareholder class action lawsuits filed in the United States District
Court for the Northern District of Georgia. Plaintiffs seek to represent a
class of individuals (including a subclass of former Voice-Tel franchisees and
a subclass of former Xpedite shareholders) who purchased or otherwise acquired
our common stock between February 11, 1997 through June 10, 1998. Plaintiffs
allege violation of Sections 10(b), 14(a) and 20(a) of the Securities Exchange
Act of 1934 and Sections 11, 12 and 15 of the Securities Act of 1933. We filed
a motion to dismiss the complaint on April 14, 1999. On December 14, 1999, the
court issued an order that dismissed the claims under Section 10(b) and 20 of
the Exchange Act without prejudice, and dismissed the claims under Section
12(a)(1) of the Securities Act with prejudice. The effect of this order was to
dismiss from this lawsuit all open-market purchases by the plaintiffs. On
January 3, 2000, we filed a renewed motion to dismiss the remaining claims in
the action brought by the Xpedite subclass and the Voice-Tel subclass, which is
pending. We have been informed that plaintiffs will seek to amend their
complaint.
A lawsuit was filed on November 4, 1998 against us, as well as individual
defendants Boland T. Jones, Patrick G. Jones, George W. Baker, Sr., Eduard J.
Mayer and Raymond H. Pirtle, Jr. in the Southern District of New York.
Plaintiffs were shareholders of Xpedite who acquired our common stock as a
result of the merger between Premiere and Xpedite in February 1998. Plaintiffs'
allegations are based on the representations and warranties made by us in the
prospectus and the registration statement related to the merger, the merger
agreement and other documents incorporated by reference, regarding our
acquisitions of Voice-Tel and VoiceCom, our roll-out of Orchestrate, our
relationship with customers Amway Corporation and DigiTEC 2000, Inc., and our
800-based calling card service. Plaintiffs allege causes of action against us
for breach of contract, against all defendants for negligent misrepresentation,
violations of Sections 11 and 12(a)(2) of the Securities Act of 1933, and
against the individual defendants for violation of Section 15 of the Securities
Act of 1933. Plaintiffs seek undisclosed damages together with pre- and post-
judgment interest, recission or recissory damages as to violation of Section
12(a)(2) of the Securities Act of 1933, punitive damages, costs and attorneys'
fees. The defendants' motion to transfer venue to Georgia has been granted and
the defendants' motion to dismiss is pending.
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 and some of its alleged current and former officers,
directors, agents and representatives. The plaintiffs allege that the 15 named
defendants and various 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. 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 some 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 investments in Xpedite but that the
plaintiffs failed to receive the benefits that they were
19
<PAGE>
promised. Plaintiffs allege that Xpedite knew or should have known of alleged
wrongdoing on the part of other defendants. Plaintiffs seek an accounting of
the corporate stock in Xpedite, compensatory damages of approximately $4.85
million, 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 equitable relief, including a request for Xpedite to issue 139,430
shares of common stock in the plaintiffs' names, attorneys' fees and costs and
other relief that the court deems just and equitable.
On June 11, 1999, Premiere filed a complaint against MCI WorldCom in the
Superior Court of Fulton County for the State of Georgia. Premiere subsequently
filed an amended complaint on June 18, 1999. The amended complaint alleges that
MCI WorldCom breached the Strategic Alliance Agreement, dated November 13,
1996, between Premiere and MCI WorldCom by, inter alia, awarding various
contracts to vendors other than Premiere and to which Premiere was entitled
either exclusive or preferential consideration. In addition to injunctive
relief, Premiere seeks damages of not less than $10 million, pre- and post-
judgment interest, costs and expenses of litigation, including attorneys' fees.
On July 1, 1999 the court entered an order staying all proceedings pending
arbitration. In connection with that order, MCI WorldCom agreed that it would
not issue any requests for information, requests for proposals or enter into
any contracts with respect to the proposals challenged by Premiere. Premiere
intends to file arbitration proceedings against MCI WorldCom in the near
future.
A lawsuit was filed on November 1, 1999 by Donald H. Turner, a former
officer of Premiere against Premiere, Boland T. Jones and Jeffrey A. Allred in
the Superior Court of Fulton County, Georgia. Against Premiere, the plaintiff
alleges breach of contract and promissory estoppel relating to the termination
of his employment against, and against all defendants the plaintiff alleges
fraudulent inducement relating to his hiring by Premiere. The plaintiff seeks
compensatory damages of $875,000, forgiveness of a $100,000 loan, interest,
attorneys' fees and punitive damages in an unspecified amount.
For detailed descriptions of our material pending litigation, see the
documents previously filed with the SEC that are described under "Incorporation
By Reference."
Risks Related to Government Regulation
U.S. or other government regulations and legal uncertainties related to the
Internet may place financial burdens on our business related to compliance.
Currently, there are few laws or regulations directed specifically at
electronic commerce and the Internet. However, because of the Internet's
popularity and increasing use, new laws and regulations may be adopted. These
laws and regulations may cover issues such as collection and use of data from
Web site visitors and related privacy issues, pricing, content, copyrights, on-
line gambling, distribution and quality of goods and services. The enactment of
any additional laws or regulations may impede the growth of the Internet, which
could impede the growth of our Web-enabled products and services and place
additional financial burdens on our business in order to comply with new laws
and regulations.
Laws and regulations directly applicable to electronic commerce or Internet
communications are becoming more prevalent. For example, the United States
Congress recently enacted laws regarding on-line copyright infringement and the
protection of information collected on-line from children. Although these laws
may not have a direct adverse effect on our business, they add to the legal and
regulatory uncertainty regarding the Internet and possible future costs of
regulatory compliance.
Our failure to comply with various government regulations related to long
distance and operator service could impair our ability to deliver our products
and services.
Premiere Communications, Inc., our operating subsidiary that provides
regulated long distance telecommunications and operator services, is subject to
regulation by the FCC and by various state public service and public utility
commissions, and is affected by regulatory decisions, trends and policies made
by these agencies. Various international authorities may also seek to regulate
the long distance and operator
20
<PAGE>
services provided by Premiere Communications. If Premiere Communications fails
to comply with these various government regulations, we could be prohibited
from providing these services and we might be subject to fines or forfeitures
and civil or criminal penalties for non-compliance.
Interstate and International Long Distance. Premiere Communications has made
the requisite filings with the FCC to provide interstate and international long
distance services. As a condition of providing these types of services,
Premiere Communications must comply with various FCC requirements, including;
. tariff requirements;
. reporting obligations;
. payment of regulatory assessments in connection with programs like
universal -service, telecommunications relay service and payphone
compensation; and
. submission to the FCC's jurisdiction for resolution of complaints.
Intrastate Long Distance. In order to provide intrastate long distance
service, Premiere Communications generally is required to obtain certification
from state public utility commissions, to register with these commissions or to
be found exempt from this registration. Premiere Communications is currently
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 the four other states. In addition, as
a condition of providing intrastate long distance services, Premiere
Communications generally is required to:
. comply with public utility commission tariff requirements, reporting
obligations and regulatory assessments; and
. submit to public utility commission jurisdiction over complaints,
transfers of control and financing transactions.
Operator Service. With the exception of three states, Colorado, Michigan and
Arizona, in which its applications to provide operator service (i.e., "0+") are
pending, Premiere Communications is authorized to provide operator service in
each state where it provides long distance telecommunications service.
Premiere Communications uses reasonable efforts to ensure that its
operations comply with these regulatory requirements. However, Premiere
Communications may not be currently in compliance with all FCC and state
regulatory requirements. Furthermore, Premiere Communications' facilities do
not prevent its customers from making long distance calls in any state,
including states in which it currently is not authorized to provide intrastate
telecommunications services and operator services. Premiere Communications'
provision of long distance telecommunications and operator services in states
where it is not in compliance with public utility commission requirements could
result in prohibitions on providing long distance service and subject us to
fines or forfeitures and civil or criminal penalties for non-compliance.
We may become subject to new laws and regulations involving services and
transactions in the areas of electronic commerce, which could increase costs of
compliance.
In conducting our business, we are subject to various laws and regulations
relating to commercial transactions generally, such as the Uniform Commercial
Code, and we are also subject to the electronic funds transfer rules embodied
in Regulation E promulgated by the Board of Governors of the Federal Reserve
System. 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 completed a study,
directed by Congress, regarding the propriety of applying Regulation E to
stored value cards. The Department of Treasury has 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
21
<PAGE>
commerce market or entities operating therein. If enacted, these laws, rules
and regulations could be imposed on our business and industry and could result
in substantial compliance costs.
Risks Related to International Operations and Expansion
Our future success depends on our expansion into international markets and
revenue from international operations may not grow enough to offset the cost of
expansion.
A component of our strategy is our planned expansion into international
markets. Revenue from international operations may not grow enough to offset
the cost of establishing and expanding these international operations. We
currently deliver document distribution services worldwide. We also operate
voice and data messaging service centers in Canada, Australia, New Zealand,
Puerto Rico, the United Kingdom, Italy, Japan, Hong Kong, Taiwan and South
Korea. In addition, we have conferencing operations in Canada and Australia.
While we have significant international experience in the delivery of our
document distribution services, we have only limited experience in marketing
and distributing our conferencing services, voice and data messaging services,
and unified messaging services internationally. Accordingly, we may not be able
to successfully market, sell and deliver our voice and data messaging,
conferencing and unified messaging services in the new international markets.
There are risks inherent in international operations that could hinder our
international growth strategy.
Our ability to achieve future success will depend in part on the expansion
of our international operations. There are difficulties and risks inherent in
doing business on an international level that could prevent us from selling our
products and services in other countries or hinder our expansion once we have
established international operations, including:
. burdensome regulatory requirements and unexpected changes in these
requirements;
. export restrictions and 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 and economic instability;
. fluctuations in currency exchange rates;
. seasonal reductions in business activity during the summer months in
Europe and other parts of the world; and
. potentially adverse tax consequences.
We could experience losses from fluctuations in currency exchange rates.
We conduct business outside the U.S. and some of our expenses and revenue
are derived in foreign currencies. In particular, a significant portion of our
document distribution business is conducted outside the U.S. and a significant
portion of our revenue and expenses from that business are derived in foreign
currencies. Accordingly, we could experience material losses due to
fluctuations in foreign currencies. We have not experienced any material losses
from fluctuations in currency exchange rates, but we could in the future. We
typically denominate foreign transactions in foreign currency and have not
regularly engaged in hedging transactions, although we may engage in hedging
transactions from time to time in the future.
22
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
When used in this prospectus and elsewhere by management or Premiere from
time to time, the words "believes," "anticipates," "expects," "will," "may,"
"should," "intends," "plans," "estimates," "predicts," "potential," "continue"
and similar expressions are intended to identify forward-looking statements
concerning our operations, economic performance and financial condition. These
include, but are not limited to, forward-looking statements about our business
strategy and means to implement the strategy, our objectives, the amount of
future capital expenditures, the likelihood of our success in developing and
introducing new products and services and expanding our business, and the
timing of the introduction of new and modified products and services. For those
statements, we claim 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 our control, 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 our forward-looking statements, including the
following factors:
. factors described from time to time in our press releases, reports and
other filings made with the Securities and Exchange Commission;
. competitive pressures among communications services providers, including
pricing pressures, may increase significantly;
. our ability to respond to rapid technological change, the development of
alternatives to our products and services and the risk of obsolescence
of our products, services and technology;
. market acceptance of new products and services;
. development of effective marketing, pricing and distribution strategies
for new products and services;
. strategic investments in early stage companies, which are subject to
significant risks, may not be successful and returns on such strategic
investments, if any, may not match historical levels;
. the value of our business may fluctuate because the value of some of our
strategic equity investments fluctuates;
. our ability to manage our growth;
. costs or difficulties related to the integration of businesses and
technologies, if any, acquired or that may be acquired by us may be
greater than expected;
. expected cost savings from past or future mergers and acquisitions may
not be fully realized or realized within the expected time frame;
. revenues following past or future mergers and acquisitions may be lower
than expected;
. operating costs or customer loss and business disruption following past
or future mergers and acquisitions may be greater than expected;
. the success of our strategic relationships, including the amount of
business generated and the viability of the strategic partners, may not
meet expectations;
. possible adverse results of pending or future litigation or adverse
results of current or future infringement claims;
. risks associated with interruption in our services due to the failure of
the platforms and network infrastructure utilized in providing our
services;
. risks associated with the Year 2000 issue, including Year 2000 problems
that may arise on the part of third parties which may effect our
operations;
. risks associated with expansion of our international operations;
23
<PAGE>
. general economic or business conditions, internationally, nationally or
in the local jurisdiction in which we are doing business, may be less
favorable than expected;
. legislative or regulatory changes may adversely affect the business in
which we are engaged; and
. changes in the securities markets may negatively impact us.
We caution you that these factors are not exclusive. Consequently, all of
the forward-looking statements made in this prospectus and in documents
incorporated in this prospectus are qualified by these cautionary statements.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this prospectus. We take on no
obligation to publicly release the results of any revisions to these forward-
looking statements that may be made to reflect events or circumstances after
the date of this prospectus, or the date of the statement, if a different date.
All statements made herein regarding our state of readiness with respect to
the Year 2000 issue constitute "Year 2000 readiness disclosures" made pursuant
to the Year 2000 Information and Readiness Disclosure Act, Public Law No. 105-
271.
24
<PAGE>
OUR BUSINESS
We began doing business in 1991 with the vision to enhance telephone-based
communications. Our telephony solutions provide a virtual office for thousands
of mobile professionals worldwide. In 1996, we saw the opportunity to integrate
the Internet into everyday business and personal communications solutions. We
are Web-enabling our traditional network-based solutions, including document
distribution, interactive voice response, conferencing, voice messaging and
enhanced calling services. Combining the power of the Internet with the reach
of the telephone, we offer an array of innovative solutions to simplify the
communications people rely on everyday at work and at home.
The shares of our common stock being offered by the selling shareholders
were issued in August 1999 in connection with our acquisition of Intellivoice
Communications, Inc. As part of this acquisition, we entered into a
registration rights agreement with some of the former Intellivoice
shareholders. The registration statement of which this prospectus forms a part
was filed pursuant to that registration rights agreement.
We are a Georgia corporation, incorporated in 1991, and our principal
executive offices are located at 3399 Peachtree Road, N.E., Lenox Building,
Suite 600, Atlanta, Georgia 30326, telephone number (404) 262-8400.
Recent Developments
On October 28, 1999, we announced that we are developing plans to sell our
enhanced calling card business and segregate our Web-related assets in stand-
alone entities for which we will seek strategic partnerships and other
strategic alliances involving emerging technologies, marketing relationships
and distribution channels. We currently have no specific plans, agreements or
commitments with respect to the sale of our enhanced calling card business, the
segregation of our Web-related assets, or any strategic partnerships or
alliances with respect to our Web-related assets. Moreover, we cannot provide
any assurances that suitable buyers for our enhanced calling card business will
be identified, that suitable strategic partners or alliances with respect to
our Web-related assets will be identified, or that any sale or other strategic
transaction with respect to our enhanced calling card business or Web-related
assets will be negotiated or consummated.
On January 10, 1999, we announced that we will operate our document
distribution, conferencing and messaging services as wholly-owned subsidiaries.
These subsidiaries have their own management teams. The presidents of these
subsidiaries are: Max Slifer, Document Distribution; Ted Schrafft,
Conferencing; and Elizabeth Abernathy, Messaging.
25
<PAGE>
SELLING SHAREHOLDERS
The following table sets forth:
. the name of each of the selling shareholders;
. the number of shares beneficially owned by each selling shareholder
prior to the offering and being offered under this prospectus; and
. the number of shares of common stock beneficially owned by each selling
shareholder after the completion of the offering.
As of the date of this prospectus, none of the selling shareholders has had
a material relationship with us or any of our affiliates within the past three
years. The table has been prepared on the basis of information furnished to us
by or on behalf of the selling shareholders. 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. Each Selling Shareholder
owns less than 1% of the total number of shares of Premiere common stock
outstanding.
The information in this table is as of the date of this prospectus.
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.
<TABLE>
<CAPTION>
Shares Shares
Beneficially Beneficially
Owned Before Shares Owned After
Name the Offering Offered Hereby Offering(1)
- ---- ------------ -------------- ------------
<S> <C> <C> <C>
BancBoston Ventures, Inc............. 193,984 169,600 24,384
Southern Venture Fund, II, L.P....... 179,154 156,623 22,531
GSM Capital Limited Partnership...... 128,637 112,459 16,178
ARGC, LLC............................ 323 283 40
Anne G. and Peter R. Hennessy, as
joint tenants....................... 7,870 6,887 983
Douglas Warstler..................... 2,992 2,992 --
</TABLE>
- --------
(1) The shares of our common stock beneficially owned by the selling
shareholders after the offering are all held in escrow pursuant to an
escrow agreement entered into as part of our acquisition of Intellivoice
Communications.
PLAN OF DISTRIBUTION
Any or all of the shares of our common stock offered hereby may be sold from
time to time by the selling shareholders, or by pledgees, donees, transferees
or other successors in interest. The selling shareholders may sell their shares
in transactions through the Nasdaq National Market System, in negotiated
transactions, or by a combination of those methods of sale. The shares of our
common stock offered hereby may be offered at fixed prices that may be changed,
at market prices prevailing at the time of sale, at prices related to the
prevailing market prices, or at negotiated prices. Prices will be determined by
the selling shareholders or by agreement between the selling shareholders and
its underwriter, broker-dealer, or agent. The selling shareholders may sell
their shares directly to purchasers or through underwriters, agents or broker-
dealers by one or more of the following:
. ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
. purchases by a broker or dealer as principal and resale by such broker
or dealer for their account pursuant to this prospectus;
. a block trade in which the broker or dealer will attempt to sell the
shares as agent, but may position and resell a portion of the block as
principal to facilitate the transaction;
26
<PAGE>
. an exchange distribution in accordance with the rules of the exchange or
automated interdealer quotation system on which the shares are then
listed; and
. through the writing of options on the shares.
Underwriters, agents or broker-dealers may receive compensation in the form
of discounts, concessions or commissions from the selling shareholders and or
the purchasers of the shares for which such underwriters, agents or broker-
dealers may act as agents or to whom they sell as principals, or both. The
compensation paid by the selling shareholders to an underwriter, agent or
particular broker-dealer will be negotiated prior to the sale and may be in
excess of customary compensation. If required by applicable law at the time a
particular offer of the shares is made, the terms and conditions of such
transaction will be set forth in a supplement to this prospectus. In addition,
any shares covered by this prospectus which qualify for sale pursuant to Rule
144 under the Securities Act of 1933, as amended, may be sold under Rule 144
rather than pursuant to this prospectus.
In connection with the distribution of the shares being sold pursuant to
this prospectus, the selling shareholders may enter into hedging transactions
with broker-dealers. In connection with these transactions, broker-dealers may
engage in short sales of the shares in the course of hedging the positions
they assume with the selling shareholders. The selling shareholders may also
sell the shares short and redeliver the shares to close out the short
positions. The selling shareholders may also enter into option or other
transactions with broker-dealers which require the delivery to the broker-
dealer of the shares. The selling shareholders may also loan or pledge the
shares to a broker-dealer, and the broker-dealer may sell the shares so
loaned, or upon a default the broker-dealer may effect sales of the pledged
shares. In addition to the foregoing, the selling shareholders may from time
to time enter into other types of hedging transactions.
In addition, the selling shareholders and any underwriter, broker-dealer,
or agent that participates in the distribution of the shares of our common
stock may be deemed to be an underwriter under the Securities Act of 1933, as
amended, (although neither Premiere nor the selling shareholders so concedes),
and any profit on the sale of shares of our common stock and any discount,
concession, or commission received by any of such underwriter, broker-dealer,
or agent, may be deemed to be underwriting discounts and commissions under the
Securities Act of 1933, as amended.
USE OF PROCEEDS
The shares of our common stock offered hereby are for the account of the
selling shareholders. We will not receive any of the proceeds from any sales
of the shares by the selling shareholders.
EXPERTS
The consolidated financial statements incorporated by reference in this
prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in giving said report.
OPINION
Kikpatrick Stockton LLP will pass upon the legality of the shares of our
common stock offered hereby.
INCORPORATION BY REFERENCE
The following documents which we have previously filed with the SEC are
hereby incorporated by reference herein:
(1) Premiere's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, filed with the Securities and Exchange Commission (the
"Commission") on March 31, 1999, as amended by Premiere's Form 10-K/A filed
with the Commission on April 1, 1999, as further amended by Premiere's Form
10-K/A filed with the Commission on January 18, 2000;
27
<PAGE>
(2) Premiere's Current Report on Form 8-K dated February 17, 1999 and filed
with the Commission on March 4, 1999, as amended by Premiere's Current Report
on Form 8-K/A filed with the Commission filed on May 3, 1999, as further
amended by Premiere's Current Report on Form 8-K/A filed with the Commission
filed on May 5, 1999;
(3) Premiere's Quarterly Report on Form 10-Q/A for the quarter ended
September 30, 1998, filed with the Commission on May 14, 1999;
(4) Premiere's Quarterly Report on Form 10-Q for the quarter ended March 31,
1999, filed with the Commission on May 17, 1999, as amended by Premiere's Form
10-Q/A filed with the Commission on May 27, 1999, as further amended by
Premiere's Form 10-Q/A filed with the Commission on January 18, 1999;
(5) Premiere's Quarterly Report on Form 10-Q for the quarter ended June 30,
1999, filed with the Commission on August 16, 1999, as amended by Premiere's
Form 10-Q/A filed with the Commission on January 18, 1999;
(6) Premiere's Quarterly Report on Form 10-Q for the quarter ended September
30, 1999, filed with the Commission on November 12, 1999, as amended by
Premiere's Form 10-Q/A filed with the Commission on January 18, 1999;
(7) the description of Premiere's Common Stock contained in Premiere'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;
(8) the description of the rights to purchase shares of Premiere's Series C
Junior Participating Preferred Stock contained in Premiere's Registration
Statement on Form 8-A, filed with the Commission on June 26, 1998, and any
amendment or report filed for the purpose of updating any such description; and
(9) the information set forth in Premiere's Proxy Statement, as revised,
under the heading "Security Ownership of Certain Beneficial Owners and
Management," the sub-headings "Nominees For Directors" and "Incumbent Directors
and Executive Officers," and the heading "Executive Compensation and Other
Information," but excluding the information under the sub-headings
"Compensation Committee Report" and "Performance Graphs," as filed with the
Commission on Schedule 14A on April 30, 1999, as revised on May 14 and May 19,
1999.
All other documents subsequently filed by the registrant pursuant to Section
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-
effective amendment which indicates that all securities offered have been sold
or which deregisters all securities then remaining unsold, shall be deemed to
be incorporated by reference herein and to be a part hereof from the date of
filing of such documents.
Any statement contained in a document incorporated or deemed incorporated
herein by reference shall be deemed to be modified or superseded for the
purpose of this registration statement to the extent that a statement contained
herein or in any subsequently filed document which also is, or is deemed to be,
incorporated herein by reference modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this registration statement.
Subject to the foregoing, all information appearing in this registration
statement is qualified in its entirety by the information appearing in the
documents incorporated by reference.
We will provide without charge, upon the written or oral request of any
person, including any beneficial owner, to whom this prospectus is delivered, a
copy of any and all information (excluding certain exhibits)
28
<PAGE>
relating to our business or our common stock that has been incorporated by
reference in the Registration Statement. Such requests should be directed to:
Patrick G. Jones
Executive Vice President, Chief Legal Officer and Chief Financial Officer
Premiere Technologies, Inc.
3399 Peachtree Road, N.E.
The Lenox Building, Suite 600
Atlanta, Georgia 30326
(404) 262-8400
HOW TO OBTAIN ADDITIONAL INFORMATION
We file annual, quarterly, and special reports, proxy statements, and other
information with the Securities and Exchange Commission (the "SEC"). You may
read and copy any document that we file with the SEC at the SEC's public
reference rooms at the following locations: 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549; 7 World Trade Center, 13th Floor, New York, New
York 10048; and Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. The SEC also maintains a site on the World Wide
Web at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the SEC.
Our common stock is listed and traded on the Nasdaq National Market System
under the symbol "PTEK." Reports, proxy and information statements, and other
information concerning Premiere also may be inspected at the offices of the
National Association of Securities Dealers; Inc. located at 1735 K Street,
N.W., Washington, D.C. 20006.
This prospectus constitutes part of the Registration Statement on Form S-3
of Premiere (including any exhibits and amendments thereto, the "Registration
Statement") filed with the SEC under the Securities Act of 1933, as amended,
relating to the shares of our common stock offered hereby. This prospectus does
not include all of the information in the Registration Statement. For further
information about our business and our common stock, please refer to the
Registration Statement. The Registration Statement may be inspected and copied,
at prescribed rates, at the SEC's public reference facilities at the addresses
set forth above.
The SEC allows us to "incorporate by reference" certain information we file
with the SEC. This means we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update this information. We incorporate by
reference the documents listed below, and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of
1934, as amended, until the selling shareholders sells all the shares of our
common stock registered hereby.
29
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
, 2000
PREMIERE TECHNOLOGIES, INC.
448,844 Shares of Common Stock
----------------
PROSPECTUS
----------------
We have not authorized any dealer, salesperson or other person
to give you written information other than this prospectus or
to make representations as to matters not stated in this
prospectus. You must not rely on unauthorized information.
This prospectus is not an offer to sell these securities or
our solicitation of your offer to buy the securities in any
jurisdiction that would not be permitted or legal. Neither the
delivery of this prospectus nor any sales made pursuant to
this prospectus after the date of this prospectus shall create
an implication that the information contained in this
prospectus or the affairs of Premiere have not changed since
the date of this prospectus.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<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................. $ 730
Printing Expenses................................................... 5,000
Accountants' Fees and Expenses...................................... 10,000
Legal Fees and Expenses............................................. 30,000
Miscellaneous....................................................... 4,270
-------
Total............................................................. $50,000
=======
</TABLE>
The foregoing items, except for the registration fee to the Securities and
Exchange Commission, are estimated. All selling expenses incurred in connection
with the registration of the shares being offered hereby up to $35,000 shall be
borne by the selling shareholders in proportion to the number of shares sold by
each selling shareholder. Premiere has agreed to bear all such expenses above
$35,000. Premiere has agreed to indemnify the selling shareholders against
certain liabilities, including liabilities under the Securities Act.
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). Premiere's Articles of
Incorporation, as amended, exonerate Premiere's directors from monetary
liability to the extent described above.
In addition to such rights as may be provided by law, Premiere's Bylaws
provide broad indemnification rights to Premiere'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 Premiere's directors. Premiere 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 Premiere 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.
II-1
<PAGE>
Premiere has entered into separate indemnification agreements with each of
its directors and certain of its officers and employees, whereby Premiere
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, Premiere holds 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
Premiere for a wrongful act that they may become legally obligated to pay or
for which Premiere is required to indemnify the directors or officers.
Premiere 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
Premiere pursuant to the foregoing provisions, or otherwise, Premiere 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 Premiere of expenses
incurred or paid by a director, officer or controlling person of Premiere 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, Premiere 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
Exhibit Number Description
4.1 Articles of Incorporation of the registrant, as amended
(incorporated herein by reference to Exhibit 3.1 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter Ended
June 30, 1998, filed with the Commission on August 14, 1998).
4.2 Amended and Restated Bylaws of the registrant, as amended
(incorporated herein by reference to Exhibit 3.1 to the
Registrant's Quarterly Report on Form 10-Q/A for the Quarter
Ended March 31, 1999, filed with the Commission on May 27,
1999).
4.3 Shareholder Protection Rights Agreement, dated June 23, 1998,
between Premiere and SunTrust Bank, Atlanta, as Rights Agent
(incorporated herein by reference to Exhibit 99.1 to the
Registrant's Current Report on Form 8-K dated June 23, 1998,
filed with the Commission on June 26, 1998).
5.1
Opinion of Kilpatrick Stockton LLP, counsel to the registrant,
as to the legality of the securities being registered
(previously filed).
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Kilpatrick Stockton LLP (included in Exhibit 5.1).
24.1 Power of Attorney (contained on the signature pages of this
registration statement at p. II-7).
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 prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
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.
(c) 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>
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed
as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4), or 497(h) under the Securities Act of 1933 shall
be deemed to be part of this Registration Statement as of the time it
was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus 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.
II-4
<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 registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Atlanta, State of Georgia, on this 18 day of
January, 2000.
PREMIERE TECHNOLOGIES, INC.
/s/ Boland T. Jones
By:_______________________________
Boland T. Jones
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons, in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
- --------- -------- ----
<S> <C> <C>
/s/ Boland T. Jones Chairman of the Board and January 18, 2000
_______________________________ Chief Executive Officer
Boland T. Jones (Principal Executive Officer) and
Director
/s/ Patrick G. Jones Executive Vice President, Chief Legal January 18, 2000
_______________________________ Officer and Chief Financial Officer
Patrick G. Jones (Principal Financial and Accounting
Officer)
* Director January 18, 2000
_______________________________
George W. Baker, Sr.
* Director January 18, 2000
_______________________________
Raymond H. Pirtle, Jr.
* Director January 18, 2000
_______________________________
Roy B. Andersen, Jr.
* Vice Chairman and Director January 18, 2000
_______________________________
William P. Payne
* President and Chief Operating Officer January 18, 2000
_______________________________ and Director
Jeffrey A. Allred
* Director January 18, 2000
_______________________________
Jackie M. Ward
* Director January 18, 2000
_______________________________
Jeffrey T. Arnold
/s/ Boland T. Jones
*By: __________________________
Boland T. Jones
Attorney-in-Fact
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
4.1 Articles of Incorporation of the registrant, as amended
(incorporated herein by reference to Exhibit 3.1 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter Ended
June 30, 1998, filed with the Commission on August 14, 1998).
4.2 Amended and Restated Bylaws of the registrant, as amended
(incorporated herein by reference to Exhibit 3.1 to the
Registrant's Quarterly Report on Form 10-Q/A for the Quarter
Ended March 31, 1999, filed with the Commission on May 27,
1999).
4.3 Shareholder Protection Rights Agreement, dated June 23, 1998,
between Premiere and SunTrust Bank, Atlanta, as Rights Agent
(incorporated herein by reference to Exhibit 99.1 to the
Registrant's Current Report on Form 8-K dated June 23, 1998,
filed with the Commission on June 26, 1998).
5.1 Opinion of Kilpatrick Stockton LLP, counsel to the registrant,
as to the legality of the securities being registered
(previously filed).
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Kilpatrick Stockton LLP (included in Exhibit 5.1).
24.1 Power of Attorney (contained on the signature pages of this
registration statement at p. II-7).
1
<PAGE>
Exhibit 23.1
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 dated March
15, 1999 included in Premiere Technologies, Inc.'s Annual Report on Form 10-K
for the year ended December 31, 1998 as amended by Form 10-K/A.
/s/ Arthur Andersen LLP
Atlanta, Georgia
January 13, 2000
