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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) JUNE 16, 1997
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PREFERRED NETWORKS, INC.
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(Exact name of registrant as specified in its charter)
GEORGIA 0-27658 58-1954892
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification No.)
850 CENTER WAY, NORCROSS, GEORGIA 30071
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(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (770) 582-3500
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(Former name or former address, if changed since last report)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
(b) On June 17, 1997, Preferred Networks, Inc., a Georgia corporation
(the "Company"), the successor by merger to Preferred Networks, Inc., a Delaware
corporation ("Old PNI"), consummated the private placement of $15.0 million in
Class A Redeemable Preferred Stock of the Company and warrants to acquire the
Company's common stock with five of its shareholders and two affiliates of one
of them (the "Investors"). The Investors have the option to purchase up to an
additional $5.0 million of Class A Redeemable Preferred Stock and warrants at
substantially the same terms until July 30, 1997. The issuance of the Class A
Redeemable Preferred Stock and warrants was approved by Old PNI's shareholders
on June 16, 1997, at the annual meeting of the shareholders, and is more fully
described in Old PNI's proxy statement with respect to the 1997 annual meeting
of shareholders, filed with the Securities and Exchange Commission on May 21,
1997. This issuance may at a subsequent date result in a change in control of
the Company.
ITEM 5. OTHER EVENTS.
On June 16, 1997, at the annual meeting of the shareholders of Old PNI,
the shareholders approved, and Old PNI consummated, the reincorporation of Old
PNI from Delaware to Georgia by means of a merger of Old PNI into PNI Merger
Corp., a Georgia corporation and a newly-formed, wholly-owned shell subsidiary
of Old PNI ("PMC"). As the surviving corporation in the merger, PMC succeeded to
all the business, properties, assets and liabilities of Old PNI. In connection
with the consummation of the merger, PMC changed its name to "Preferred
Networks, Inc." The shareholders of Old PNI automatically became shareholders in
the Company, as the surviving corporation in the merger.
As a result of the merger, the Articles of Incorporation and Bylaws of
PMC, which are very similar to Old PNI's Delaware Certificate of Incorporation
and Bylaws, are now the Articles of Incorporation and Bylaws of the Company. A
comparison of certain rights of shareholders under Delaware law and Old PNI's
Certificate of Incorporation and Bylaws with their rights under Georgia law and
PMC's Articles of Incorporation and Bylaws is contained in Old PNI's proxy
statement with respect to the 1997 annual meeting, filed with the Securities and
Exchange Commission on May 21, 1997.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
The following exhibits are filed as part of this Current Report on Form
8-K:
2.1 Class A Redeemable Preferred Stock Purchase Agreement
dated as of May 21, 1997, by and among the Company
and Centennial Fund IV, L.P., Saugatuck Capital
Company Limited Partnership III, PNC Capital Corp.,
Fleet Venture Resources, Inc., Fleet Equity Partners
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VI, L.P., Chisholm Partners II, L.P. and Primus
Capital Fund III Limited Partnership (incorporated
by reference to Exhibit A to Old PNI's proxy
statement with respect to the 1997 annual meeting of
shareholders, filed with the Securities and Exchange
Commission on May 21, 1997).
3.1 Articles of Incorporation of the Company.
3.2 Bylaws of the Company.
4.1 See the Articles of Incorporation and Bylaws of the
Company filed as Exhibits 3.1 and 3.2 herewith.
99.1 Agreement and Plan of Merger, dated May 21, 1997, by
and between Preferred Networks, Inc. and PNI Merger
Corp. (incorporated by reference to Exhibit C to Old
PNI's proxy statement with respect to the 1997 annual
meeting of shareholders, filed with the Securities
and Exchange Commission on May 21, 1997).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PREFERRED NETWORKS, INC.
Date: June 30, 1997 By: /s/ Michael J. Saner
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Michael J. Saner
President
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Sequential Page No.
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<S> <C> <C>
2.1 Class A Redeemable Preferred Stock Purchase Agreement dated as of May
21, 1997, by and among the Company and Centennial Fund IV, L.P.,
Saugatuck Capital Company Limited Partnership III, PNC Capital Corp.,
Fleet Venture Resources, Inc., Fleet Equity Partners VI, L.P., Chisholm
Partners II, L.P. and Primus Capital Fund III Limited Partnership
(incorporated by reference to Exhibit A to Old PNI's proxy statement
with respect to the 1997 annual meeting of shareholders, filed with the
Securities and Exchange Commission on May 21, 1997).
3.1 Articles of Incorporation of the Company.
3.2 Bylaws of the Company.
4.1 See the Articles of Incorporation and Bylaws of the Company filed as
Exhibits 3.1 and 3.2 herewith.
99.1 Agreement and Plan of Merger, dated May 21, 1997, by and between
Preferred Networks, Inc. and PNI Merger Corp. (incorporated by
reference to Exhibit C to Old PNI's proxy statement with respect to the
1997 annual meeting of shareholders, filed with the Securities and
Exchange Commission on May 21, 1997).
</TABLE>
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Exhibit 3.1
ARTICLES OF AMENDMENT
OF
PREFERRED NETWORKS, INC.
I.
The name of the corporation, which was organized under the Georgia
Business Corporation Code, is "Preferred Networks, Inc."
II.
The amendment adopted is to amend Article III of the Articles of
Incorporation of the Corporation to create a new class of Preferred Stock of the
Corporation, designated as Class A Redeemable Preferred Stock, by adding the
following to the existing Article III:
The Board of Directors of the Corporation hereby authorizes
the issuance of 13,500,000 shares of Preferred Stock, designated Class
A Redeemable Preferred Stock (the "Class A Preferred Stock") which
shall have the following rights, preferences, powers, privileges,
restrictions, qualifications, and limitations:
1. DIVIDENDS. The holders of the Class A Preferred Stock
shall be entitled to receive, out of funds legally available therefor,
dividends of the rate per annum of fifteen cents ($.15) per share (the
"Accruing Dividends"). Accruing Dividends shall accrue from day to day,
beginning on the date of issuance of the Class A Preferred Stock
whether or not declared, and shall be cumulative. The Corporation may,
at the election of the Directors, declare and pay such Accruing
Dividends at any time, but shall not be obligated to declare or pay
Accruing Dividends except as set forth in Section 2 and 4 herein.
2. LIQUIDATION, DISSOLUTION OR WINDING UP; CERTAIN
MERGERS, CONSOLIDATIONS AND ASSET SALES. In the event of any voluntary
or involuntary liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation available for distribution
to shareholders shall be paid out, prior to and in preference over any
payment in respect of the shares of Common Stock then outstanding, as
follows: (i) the holders of Class A Preferred Stock shall be entitled
to be paid one dollar and fifty cents ($1.50) per share plus all
Accruing Dividends unpaid thereon (whether or not declared) and any
other dividends, if any, declared but unpaid thereon, computed to the
date payment thereof is made available, such amount payable with
respect to all shares of Class A Preferred Stock being sometimes
referred to as the "Liquidation Preference Payments." If upon such
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the assets to be distributed among the
holders of the Class A Preferred Stock shall be insufficient to permit
payment in full to the holders of Class A Preferred Stock of the
Liquidation Preference Payments, then the entire assets of the
Corporation to be so distributed shall be distributed ratably among the
holders of Class A Preferred Stock. Upon
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any such liquidation, dissolution or winding up of the Corporation,
immediately after the holders of Class A Preferred Stock shall have
been paid in full the Liquidation Preference Payments, the remaining
net assets of the Corporation available for distribution shall be
distributed ratably among the holders of Common Stock. Written notice
of such liquidation, dissolution or winding up, stating a payment date,
the amount of the Liquidation Preference Payments and the place where
the Liquidation Preference Payments shall be payable, shall be
delivered in person, mailed by certified or registered mail, return
receipt requested, or sent by telecopier or telex, not less than 20
days prior to the payment date stated therein, to the holders of record
of Class A Preferred Stock, such notice to be addressed to each such
holder at its address as shown by the records of the Corporation. The
consolidation or merger of the Corporation into or with any other
entity or entities which results in the exchange of outstanding shares
of the Corporation for securities or other consideration issued or paid
or caused to be issued or paid by any such entity or affiliate thereof
(other than a merger to reincorporate the Corporation in a different
jurisdiction) and the sale, lease, abandonment, transfer or other
disposition by the Corporation of all or substantially all its assets
shall be deemed to be a liquidation, dissolution or winding up of the
Corporation within the meaning of the provisions of this Section 2.
3. VOTING. 3.1 Voting. Each holder of outstanding shares
of Class A Preferred Stock shall be entitled to one vote with respect
to any and all matters presented to the shareholders of the Corporation
for their action or consideration and shall be entitled to notice of
any shareholder meetings in accordance with the Corporation's bylaws.
Except as provided by law, by the provisions of Subsections 3.2 and 3.3
below or by the provisions establishing any other series of Preferred
Stock, holders of Class A Preferred Stock and of any other outstanding
series of Preferred Stock shall vote together with the holders of
Common Stock as a single class.
3.2 Directors. The holders of the Class A Preferred Stock,
voting as a separate class, shall be entitled to elect one (1) director
of the Corporation.
3.3 Restrictive Provisions. Except as expressly provided
herein or as required by law, so long as any shares of Class A
Preferred Stock remain outstanding, the Corporation shall not without
the vote of or written consent by the holders of at least two thirds of
the then outstanding shares of Class A Preferred Stock voting as a
class:
(a) take any action that amends, alters or repeals
the preferences, special rights or other powers of the Class A
Preferred Stock, so as to affect adversely the Class A Preferred Stock
(including, without limiting the generality of the foregoing, the
authorization, creation or issuance of any shares of capital stock or
other securities (other than Common Stock) with preference or priority
equal or superior to the Class A Preferred Stock or on a parity with
the Class A Preferred Stock in any regard, including, without
limitation, redemption rights and the right to receive either dividends
or amounts distributable upon liquidation, dissolution or winding up of
the Corporation) or increases the authorized number of shares of Class
A Preferred Stock;
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(b) redeem, purchase or otherwise acquire for
consideration any shares of its capital stock (or rights, options or
warrants to purchase such shares), other than the Securities as defined
in the Class A Redeemable Preferred Stock Purchase Agreement dated as
of May 21, 1997 entered into between the Company and the Investors set
forth therein.
(c) approve any material change in the line of
business of the Corporation or any Subsidiary;
(d) enter into any merger, consolidation or
amalgamation, or any recapitalization, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution) or convey,
sell, lease, assign, transfer or otherwise dispose of all or
substantially all of its business, assets or property;
(e) amend its Articles of Incorporation or Bylaws, if
such amendment would change any material rights, preferences,
privileges or limitations provided to the holders of Class A Preferred
Stock therein or the size of the Board of Directors or the procedures
for meetings of the Board of Directors and shareholders, including
without limitation, notice and quorum requirements;
(f) enter into any acquisition or series of related
acquisitions involving an aggregate transaction value equal to or
greater than $5,000,000; or
(g) increase its indebtedness for borrowed money in
one or more transactions, whether or not related, in an aggregate
amount of $5,000,000 in excess of the amount of the Corporation's
existing indebtedness and availability under existing credit facilities
immediately preceding the date of initial issuance of the Class A
Preferred Stock (for the purposes of determining such indebtedness of
the Corporation, there shall not be counted the Term Notes in the
aggregate principal amount equal to $10,000,000 issued by the
Corporation to the Investors in April and May 1997).
4. REDEMPTION. 4.1 Voluntary Redemption. All but not
less than all of the Class A Preferred Stock may be redeemed at any
time at the option of the Corporation at a price equal to the original
purchase price plus all Accruing Dividends unpaid thereon (whether or
not declared) and any other dividends, if any, declared but unpaid
thereon.
4.2 Mandatory Redemption. On June 17, 2002 (the "Redemption
Date") each holder of Class A Preferred Stock shall be entitled to
require the Corporation to redeem all outstanding shares of Class A
Preferred Stock held by such holder at a price equal to the original
purchase price plus all Accruing Dividends unpaid thereon (whether or
not declared) and any other dividends, if any, declared but unpaid
thereon (the "Redemption Price").
4.3 Redemption Mechanics. At least 60 days prior to the
Redemption Date, written notice (the "Redemption Notice") shall be
given by the Corporation to each holder of Class A Preferred Stock by
delivery in person of the Redemption Date. At any time on or prior to 5
days before the Redemption Date, written notice shall be given to the
Corporation
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by each holder of Class A Preferred Stock who desires to require the
Corporation to redeem shares of Class A Preferred Stock notifying the
Corporation of such redemption and specifying the number of shares of
Class A Preferred Stock to be redeemed from such holder. From and after
the close of business on a Redemption Date, unless there shall have
been a default in the payment of the Redemption Price, all rights of
holders of Class A Preferred Stock electing to require the Corporation
to redeem the Class A Preferred Stock held by each of them (except the
right to receive the Redemption Price) shall cease with respect to the
shares to be redeemed on such Redemption Date, and such shares shall
not thereafter be transferred on the books of the Corporation or be
deemed to be outstanding for any purpose whatsoever. If the funds of
the Corporation legally available for redemption of the Class A
Preferred Stock on the Redemption Date are insufficient to redeem the
total number of Class A Preferred Stock electing to be redeemed on such
Redemption Date, the holders of such shares shall share ratably in any
funds legally available for redemption of such shares according to the
respective amounts which would be payable to them if the full number of
shares to be redeemed on such Redemption Date were actually redeemed.
The Class A Preferred Stock required to be redeemed but not so redeemed
shall remain outstanding and entitled to all rights and preferences
provided herein. At any time thereafter when additional funds of the
Corporation are legally available for the redemption of such Class A
Preferred Stock, such funds will be used, at the end of the next
succeeding fiscal quarter, to redeem the balance of such shares, or
such portion thereof for which funds are then legally available, on the
basis set forth above. No other capital stock of any class or series
shall be redeemed on or after the Redemption Date until all shares of
Class A Preferred Stock required to be redeemed as of such date have
been redeemed.
4.4 Redeemed or Otherwise Acquired Shares to be Retired.
Any shares of Class A Preferred Stock redeemed pursuant to this Section
4 or otherwise acquired by the Corporation in any manner whatsoever
shall be canceled and shall not under any circumstances be reissued;
and the Corporation may from time to time take such appropriate
corporate action as may be necessary to reduce accordingly the number
of shares of authorized Class A Preferred Stock.
4.5 Failure to Redeem. If the Corporation fails, for any
reason or for no reason, to redeem on the Redemption Date any of the
then outstanding Class A Preferred Stock elected by the holders thereof
to be redeemed in accordance with the terms and conditions of this
Section 4, interest at a rate of 12% per annum shall accrue on the
Redemption Price and shall be due and payable on the first day of each
month until such redemption has been made in full; provided, that if
such redemption has not been made in full on or before the first
anniversary of the Redemption Date, then upon the written request of
the holders of two-thirds of the then outstanding Class A Preferred
Stock the Corporation shall take all actions necessary to submit a
proposal to sell capital stock or assets of the Corporation sufficient
to enable the Corporation to pay the Redemption Price in full for
stockholder approval including, without limitation, the engagement of
an investment banking firm reasonably acceptable to the holders of
two-thirds of the then outstanding Class A Preferred Stock.
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4.6 Failure to Surrender. Should any holder of Class A
Preferred Stock redeemed pursuant to this Section 4 fail to surrender
the certificate or certificates representing the shares to be redeemed,
the Corporation may transfer the money distributable upon the
redemption to a trustee for such holder in accordance with and with the
effect set forth in Section 14-2-641(b) of the Georgia Business
Corporation Code, or any successor provision.
III.
The date of the adoption of the amendment was June 13, 1997.
IV.
The amendment was duly adopted by the Board of Directors of the
Corporation in accordance with the provisions of O.C.G.A. ss. 14-2-602.
DULY EXECUTED and delivered by the undersigned on June 16, 1997.
PREFERRED NETWORKS, INC.
By:/s/ Mark B. Jones
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Mark B. Jones
Vice President
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ARTICLES OF INCORPORATION
OF
PNI MERGER CORP.
ARTICLE I.
The name of the Corporation is:
PNI Merger Corp.
ARTICLE II.
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Georgia Business
Corporation Code (the "GBCC").
ARTICLE III.
The total number of shares of stock which the Corporation is authorized
to issue is One Hundred Thirty Million (130,000,000) shares, of which One
Hundred Million (100,000,000) shares are Common Stock (the "Common Stock") and
Thirty Million (30,000,000) shares are Preferred Stock (the "Preferred Stock"),
all of which shares are without par value. The designations, preferences,
limitations and relative rights of or on the Common Stock and the Preferred
Stock are as set forth below and are otherwise subject to applicable law. The
Common Stock (a) shall be one and the same class, (b) subject to the rights of
the holders of Preferred Stock, if any, shall have full and unlimited voting
rights (with each share having one vote on each matter submitted to shareholders
for vote), and (c) subject to the rights of the holders of Preferred Stock, if
any, shall have equal rights of participation in dividends and distributions and
shall be entitled to receive the net assets of the Corporation ratably upon
dissolution. The Board of Directors is authorized, by causing appropriate
articles of amendment to be filed pursuant to the applicable law of the State of
Georgia, to divide the Preferred Stock into series and to determine the
preferences, limitations and relative rights thereof, including but not limited
to dividend rights, dividend rates, conversion rights, voting rights (including,
without limitation, the election of a specified number of directors by the
holders of one or more such series), redemption rights, and liquidation
preferences; and to fix the number of shares constituting any such series and
the designation thereof; and to increase or decrease the number of shares of any
such series (but not below the number of shares thereof then issued).
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ARTICLE IV.
The street address of the initial registered office of the corporation
is 850 Center Way, Norcross, Gwinnett County, Georgia 30071, and the initial
registered agent of the corporation at such address is Mark B. Jones.
ARTICLE V.
The name and address of the incorporator are:
Robert J. Pile
Sutherland, Asbill & Brennan, L.L.P.
999 Peachtree Street, N.E., Suite 2100
Atlanta, Georgia 30309-3996
ARTICLE VI.
The mailing address of the Corporation's initial principal office will
be:
850 Center Way
Norcross, Georgia 30071
ARTICLE VII.
In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to adopt, amend or
repeal the Bylaws of the Corporation.
ARTICLE VIII.
A director of the Corporation shall not be personally liable to the
Corporation or to its shareholders for monetary damages for any action taken, or
any failure to take any action, as a director, except liability: (a) for any
appropriation, in violation of his or her duties, of any business opportunity of
the Corporation, (b) for acts or omissions which involve intentional misconduct
or a knowing violation of law, (c) for the types of liability set forth in
section 14-2- 832 of the GBCC, or (d) for any transaction from which the
director received an improper personal benefit. If the GBCC is hereafter amended
to further eliminate or limit the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the GBCC, as so amended. Any repeal or modification
of this Article VIII by the shareholders of the Corporation shall not adversely
affect any right or protection of a director of the Corporation existing at the
time of such repeal or modification.
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ARTICLE IX.
The Board of Directors shall consist of such number of directors as
fixed or changed from time to time by the Board of Directors and shall be
divided into three classes: Class I, Class II and Class III, which shall be as
nearly equal in number as possible. Each director shall serve for a term ending
on the date of the third annual meeting of shareholders following the annual
meeting at which such director was elected; provided, however, that each initial
director in Class I shall hold office until the 1998 annual meeting of
shareholders; each initial director in Class II shall hold office until the 1999
annual meeting of shareholders; and each initial director in Class III shall
hold office until the 2000 annual meeting of shareholders. Each director shall
serve until his successor is elected and qualified or until his earlier death,
resignation or removal. The number of directors may be increased or decreased
from time to time by resolution of the Board of Directors; provided, however,
that the total number of directors at any time shall not be less than three
unless these Articles of Incorporation are amended to delete the classification
of the Board of Directors. Any vacancies in the Board of Directors for any
reason, and any directorships resulting from any increase in the authorized
number of directors, may be filled by the Board of Directors, acting by a
majority of the directors then in office, although less than a quorum, and any
directors chosen to fill a vacancy shall hold office until the next election of
the class for which such directors shall have been chosen and until their
successors shall be elected and qualified, and any directors chosen by reason of
an increase in the number of directors shall hold office until the next election
of directors by the shareholders and until their successors shall be elected and
qualified. Subject to the foregoing and the GBCC, at each annual meeting of
shareholders the successors to the class of directors whose term shall then
expire shall be elected to hold office for a term expiring at the third
succeeding annual meeting.
ARTICLE X.
In discharging the duties of their respective positions and in
determining what is believed to be in the best interests of the Corporation, the
Board of Directors, committees of the Board of Directors and individual
directors, in addition to considering the effects of any action on the
Corporation or its shareholders, may consider the interests of the employees,
customers, suppliers and creditors of the Corporation and its subsidiaries, the
communities in which offices or other establishments of the Corporation and its
subsidiaries are located, and all other factors such directors consider
pertinent; provided, however, that this Article X shall be deemed solely to
grant discretionary authority to the directors and shall not be deemed to
provide any constituency any right to be considered.
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ARTICLE XI.
The shareholders of the Corporation shall have the right to take action
in lieu of a meeting only by one or more consents in writing signed by all of
the shareholders entitled to vote on such action.
ARTICLE XII.
Any shares of the Corporation reacquired by the Corporation shall
become treasury shares.
ARTICLE XIII.
(a) No shares of stock of the Corporation of any class or series
outstanding at any time shall be owned of record or beneficially by a person (as
defined in paragraph (d) hereof) whose ownership thereof would constitute a
violation of Section 310(a) or 310(b) of the Communications Act of 1934, as
amended, or any similar or successor federal statutes.
(b) No equity or debt securities of the Corporation, including
options or warrants, shall at any time be held or owned of record or
beneficially at any time by any person (as defined in paragraph (d) hereof) if
such holding or ownership in the opinion of general or special legal counsel to
the Corporation would more likely than not constitute a violation of, or breach
a condition of, an authority, license, franchise, permit, or similar item,
granted by the Federal Communications Commission, or any state or other public
utility commission, public service commission or similar body, issued to the
Corporation (or any entity in which the Corporation directly or indirectly
beneficially owns an equity interest), the violation or breach of which it is
determined, upon the vote of a majority of directors then in office, would be
material to the Corporation, its assets or business. Provided, however, that at
any time upon the vote of a majority of directors then in office, the
Corporation may waive or modify the application of this paragraph (b), but not
paragraph (a). Before any redemption or repurchase under paragraph (c) the
Corporation shall give notice of intent to redeem or repurchase to the holder of
record and such person shall have the lesser of: (i) one hundred (100) calendar
days from the date such notice is given, and (ii) the maximum time period
permitted in the opinion of counsel to the Corporation, to cure the facts or
circumstances concerning the holder or owner, of record or beneficially, which
constitutes a violation or breach, or to sell or transfer the securities so as
to cure the violation or breach.
(c) The Corporation may, in its sole discretion, redeem or repurchase
any outstanding shares of stock of any class or series, or any other securities
(including options or warrants), which are owned in violation of paragraphs (a)
or (b) hereof. Shares or other securities redeemed or repurchased by the
Corporation under this paragraph (c) may be redeemed or repurchased for cash,
property or rights, at the lesser of (i) the fair market value at the time of
the redemption or repurchase or (ii) provided the holder or owner purchased such
shares or securities within a year prior to the redemption or repurchase, the
holder's or owner's purchase price (plus
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accrued dividends and distributions to the extent constituting income earned by
the Corporation since the purchase date, and interest in the case of a debt
instrument). The Board of Directors shall have the sole discretion to determine
whether shares or other securities are owned or held in violation of paragraphs
(a) or (b) hereof, the fair market value of any shares or other securities to be
redeemed or repurchased, the value of any non-cash consideration to be provided
for such shares or other securities in any such redemption or repurchase,
whether cash, property or other rights or any combination of same, are given in
consideration for such redemption or repurchase and the procedures for
redemption or repurchase. The Corporation may redeem or repurchase such shares
or other securities pro-rata as to all persons whose shares or other securities
are redeemable or repurchasable pursuant to this Article XIII, or in any other
manner, and may contractually or otherwise, including by provisions in these
Articles of Incorporation, agree to redeem shares or securities in a particular
manner or order. Notice of intent to redeem or repurchase, or redemption or
repurchase, may be given by the same manner of transmission and address as
notice of shareholders' meetings may be given and in such case shall be
effective at the same time as notice of such a meeting would be effective.
(d) For purposes of this Article XIII, "person" shall mean an
individual, a partnership, a limited partnership, a corporation, a trust, a
business trust, a joint venture, an unincorporated organization, a limited
liability company, a limited liability partnership, a government or any
department or agency thereof, an alien, a foreign government, any other legal
entity, and a representative of any such person.
ARTICLE XIV.
The undersigned incorporator does hereby undertake to publish a notice of
the filing with the Secretary of State of the State of Georgia of these
Articles of Incorporation as required by O.C.G.A. ss. 14-2-201.1(b).
DULY EXECUTED and delivered by the undersigned incorporator on May 12,
1997.
/s/ Robert J. Pile
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Robert J. Pile, as Incorporator
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EXHIBIT 3.2
BYLAWS
OF
PREFERRED NETWORKS, INC.
(a Georgia corporation)
ARTICLE IV
Shareholders
Section 1. Annual Meeting. The annual meeting of the shareholders
shall be held on such date, at such time and at such place as shall be set by
the Board of Directors for the purpose of electing directors and for the
transaction of such other business as may come before the meeting.
Section 2. Special Meetings. Special meetings of the shareholders,
for any purpose, unless otherwise prescribed by statute, may be called by the
Chairman of the Board, the President, the Board of Directors, and by holders of
outstanding stock having not less than seventy-five percent of the votes
entitled to be cast by all of the outstanding shares of the Company.
Section 3. Place of Meeting. The Board of Directors may designate
any place as the place for any annual meeting or for any special meeting of
shareholders. If no designation is made the place of the meeting shall be the
principal office of the Company.
Section 4. Notice of Meeting. Written or printed notice stating
the place, day and hour of the meeting, and, in case of a special meeting, the
purpose for which the meeting is called, shall be delivered not less than ten
nor more than sixty days before the date of the meeting, either personally or by
mail, by or at the direction of the Chairman of the Board, the President, or the
Secretary to each shareholder of record entitled to vote at such meeting. If
mailed, the notice shall be deemed to be delivered when deposited in the United
States mail addressed to the shareholder at his address as it appears on the
stock transfer books of the Company, with postage thereon prepaid.
Section 5. Quorum. Except as otherwise provided by the Company's
Articles of Incorporation (the "Articles of Incorporation") or the Georgia
Business Corporation Code (the "GBCC"), a majority of the votes entitled to be
cast on a matter by a voting group, represented in person or by proxy, shall
constitute a quorum of that voting group at a meeting of shareholders.
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If less than a quorum is represented at a meeting, the meeting may be adjourned
without further notice if the time and place thereof are announced at the
meeting at which the adjournment is taken, provided, however, that the period
shall not exceed thirty days for any one adjournment. At such adjourned meeting
at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally called.
If a quorum is present, action on a matter (other than the election of
directors) by a voting group is approved if the votes cast within the voting
group favoring the action exceed the votes cast opposing the action, unless the
Articles of Incorporation, a bylaw adopted by the shareholders under Section
14-2-1021 of the GBCC, or the GBCC requires a greater number of affirmative
votes. Unless otherwise provided in the Articles of Incorporation, directors of
the Company shall be elected by a plurality of the votes cast by the shares
entitled to vote in the election at a meeting at which a quorum is present.
Section 6. Proxies. At all meetings of shareholders, a shareholder
may vote by proxy authorized by the shareholder or his duly authorized attorney
in fact in the manner authorized by the GBCC. Such proxy shall be filed with the
Secretary of the Company before or at the time of the meeting. No proxy shall be
valid after eleven months from the date of its execution, unless otherwise
provided in the proxy.
Section 7. Voting of Shares. Each outstanding share shall be
entitled to one vote on each matter submitted to a vote at a meeting of the
shareholders except as otherwise provided in the Articles of Incorporation or
the GBCC. In the election of directors, each record holder of stock entitled to
vote at such election shall have the right to vote the number of shares owned by
him for as many persons as there are directors to be elected, and for whose
election he has the right to vote. Cumulative voting shall not be allowed.
Section 8. Action Without a Meeting. Unless otherwise provided in
the Articles of Incorporation, any action required to be taken or which may be
taken at a meeting of shareholders may be taken without a meeting, without prior
notice and without a vote, if a consent or consents in writing, setting forth
the action so taken, shall be signed by all of the shareholders entitled to vote
on such action.
ARTICLE V
Board of Directors
Section 1. Number and Election of Board. The Board of Directors
shall consist of such number of directors as fixed or changed from time to time
by the Board of Directors and shall be divided into three classes: Class I,
Class II and Class III, which shall be as nearly equal in number as possible.
Each director shall serve for a term ending on the date of the third annual
meeting of shareholders following the annual meeting at which such director was
elected; provided, however, that each initial director in Class I shall hold
office until the 1998 annual meeting of shareholders; each initial director in
Class II shall hold office until the 1999 annual
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meeting of shareholders; and each initial director in Class III shall hold
office until the 2000 annual meeting of shareholders. Each director shall serve
until his successor is elected and qualified or until his earlier death,
resignation or removal. The number of directors may be increased or decreased
from time to time by resolution of the Board of Directors; provided, however,
that the total number of directors at any time shall not be less than three
unless these Articles of Incorporation are amended to delete the classification
of the Board of Directors. Any vacancies in the Board of Directors for any
reason, and any directorships resulting from any increase in the authorized
number of directors, may be filled by the Board of Directors, acting by a
majority of the directors then in office, although less than a quorum, and any
directors chosen to fill a vacancy shall hold office until the next election of
the class for which such directors shall have been chosen and until their
successors shall be elected and qualified, and any directors chosen by reason
of an increase in the number of directors shall hold office until the next
election of directors by the shareholders and until their successors shall be
elected and qualified. Subject to the foregoing and the GBCC, at each annual
meeting of shareholders the successors to the class of directors whose term
shall then expire shall be elected to hold office for a term expiring at the
third succeeding annual meeting.
Section 2. Resignation and Removal.
(a) Resignation. Any director may resign at any time by
giving written notice to the Board of Directors, the Chairman of the Board, or
to the Secretary of the Company. Such resignation shall take effect at the time
delivered unless a later date is specified therein and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
(b) Removal. Any director or the entire Board of Directors
may be removed by the shareholders at any time, with or without cause, except as
otherwise provided by law.
Section 3. Regular Meetings. A regular meeting of the Board of
Directors shall be held without notice immediately after and at the same place
as the annual meeting of shareholders. The Board of Directors may adopt a
resolution as to the time and place for the holding of additional regular
meetings without notice other than such resolution.
Section 4. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the Chairman of the Board, the
President or any director. The person or persons authorized to call special
meetings of the Board of Directors may fix any place as the place for holding
any special meeting of the Board of Directors called by him or them.
Section 5. Notice. Notice of any special meeting shall be given at
least two days prior thereto by written notice delivered personally or mailed
(first class mail) to each director at his business address or by notice given
by telegraph or telecopy to such address. If mailed, such notice shall be deemed
to be delivered five days following the deposit of such notice in the United
States mail so addressed, with postage thereon prepaid. If notice is given by
telegram, such notice shall be deemed to be delivered when the telegram is
delivered to the telegraph company.
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If notice is given by telecopy, such notice shall be deemed to be delivered upon
printed statement of receipt by the transmitting telecopier. Any director may
waive notice of any meeting. The attendance of a director at a meeting shall
constitute a waiver of notice of such meeting unless the director at the
beginning of the meeting (or promptly upon his arrival) objects to holding the
meeting or transacting business at the meeting and does not thereafter vote for
or assent to action taken at the meeting. Neither the business to be transacted
at nor the purpose of any regular or special meeting of the Board of Directors
need be specified in the notice or waiver of notice of such meeting.
Section 6. Quorum. A majority of the total number of directors
shall constitute a quorum for the transaction of business at any meeting of
the Board of Directors. But if less than a majority is present at a meeting, a
majority of the directors present may adjourn the meeting from time to time
without further notice.
Section 7. Manner of Action. Except as otherwise provided in the
Articles of Incorporation, the vote of the majority of the directors present at
a meeting at which a quorum is present shall be the act of the Board of
Directors.
Section 8. Expenses: Compensation. The Company shall pay the
actual out-of-pocket expenses incurred by each director in connection with
attending the meetings of the Board of Directors and any committee thereof;
provided, that the Company shall not be obligated to pay for any of such
expenses that are significantly in excess of the customary out-of-pocket
expenses that would have been incurred for travel to such meetings from such
director's home or office. In addition to the payment of each director's
expenses as provided in the preceding sentence, each director may, by resolution
of the Board of Directors, be paid a fixed sum for attendance at each meeting or
a stated annual amount or be provided other compensation in cash, stock or other
property for service as a director. No director shall be precluded from serving
the Company in any other capacity and receiving compensation therefor.
Section 9. Presumption of Assent. A director of the Company who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
his dissent or abstention shall be entered in the minutes of the meeting or
unless he files his written notice of dissent or abstention to such action with
the presiding officer of the meeting before the adjournment thereof or shall
forward such dissent to the Company immediately after the adjournment of the
meeting. Such right to dissent shall not apply to a director who voted in favor
of such action.
Section 10. Meeting by Conference Telephone. Members of the Board
of Directors may participate in a meeting by means of a conference telephone or
similar communications equipment by which all persons participating in a meeting
can hear each other during the meeting. Such participation shall constitute
presence in person at the meeting.
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Section 11. Action Without a Meeting. Any action required or
permitted to be taken at a meeting of the Board of Directors may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the directors entitled to vote with respect to the
subject matter thereof and filed with the minutes of the proceedings of the
Board of Directors. Such consent shall have the same force and effect as a
unanimous vote of the directors.
Section 12. Committees. The Board of Directors may, by resolution
passed by a majority of the whole Board, appoint an executive committee and any
other committee of the Board of Directors, the composition of each of which
shall consist of one or more directors of the Company, and may delegate to any
such committee any of the authority of the Board of Directors, however
conferred, other than the power or authority to (i) approve or propose to
shareholders action that the GBCC requires be approved by shareholders; (ii)
fill vacancies on the Board of Directors or any of its committees; (iii) amend
the Articles of Incorporation pursuant to Section 14-2-1002 of the GBCC; (iv)
adopt, amend or repeal the Bylaws of the Company; or (v) approve a plan of
merger not requiring shareholder approval. Each such committee shall serve at
the pleasure of the Board of Directors. Any such committee shall keep written
minutes of its meetings and report the same to the Board of Directors at the
next regular meeting of the Board of Directors.
ARTICLE VI
Officers and Agents
Section 1. General. The officers of the Company shall be a
Chairman of the Board and Chief Executive Officer, a President, one or more Vice
Presidents, a Secretary, and a Treasurer. The Board of Directors may appoint
such other officers, assistant officers and agents, including assistant
secretaries and assistant treasurers, as they may consider necessary, who
shall be chosen in such a manner and hold their offices for such terms and have
such authority and duties as from time to time may be determined by the Board
of Directors. The salaries for all the officers of the Company shall be fixed
by the Board of Directors. Any number of offices may be held by the same
person. In all cases where duties of any officer, agent or employee are not
prescribed by the Bylaws or by the Board of Directors, such officer, agent or
employee shall follow the orders and instructions of the President.
Section 2. Election and Term of Office. The officers of the
Company shall be elected by the Board of Directors annually at the first meeting
of the Board held after each annual meeting of the shareholders. Each officer
shall hold office until his successor is elected and qualified or until his
earlier death, resignation or removal.
Section 3. Removal. Any officer or agent may be removed by the
Board of Directors whenever in its judgment the best interests of the Company
will be served thereby.
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Section 4. Vacancies. A vacancy in any office, however occurring,
may be filled by the Board of Directors.
Section 5. Chairman of the Board and Chief Executive Officer. The
Chairman of the Board shall be the chief executive officer of the Company, and
shall be responsible for the administration of the Company (including the
general supervision of the policies of the Company, the general and active
management of the financial affairs of the Company, and the supervision
and direction of the actions of the other officers of the Company), shall have
the authority to sign and deliver agreements, certificates and other
instruments on behalf of the Company, and shall have all such other duties and
powers that are incident to his office or that are from time to time assigned
to him by the Board of Directors. He shall preside at all meetings of the Board
of Directors and of the shareholders, and may delegate such authority to any
other director or to an officer of the Company. The Chairman of the Board may
exercise any powers, authorities or functions, granted or designated, to be
performed by the President under the Bylaws or by law.
Section 6. President. The President, subject to the direction of
the Board of Directors and the Chairman of the Board, shall be the chief
operating officer of the Company, shall have general supervision of the
day-to-day affairs of the Company and supervision and direction of the actions
of the other officers of the Company, shall have the power to sign and deliver
agreements, certificates and other instruments on behalf of the Company, and
shall have all such other duties and powers that are incident to his office or
that are from time to time assigned by the Board of Directors or the Chairman of
the Board. In the absence of the Chairman of the Board, the President shall
exercise all of the functions and perform all of the duties of the chief
executive officer of the Company. In the absence of the Chairman of the Board,
if the President has not delegated such authority, the President shall preside
at meetings of the shareholders and, if the President is a director, at meetings
of the Board of Directors.
Section 7. Vice Presidents. Each Vice President shall perform such
duties and exercise such powers as the Chairman of the Board, the President or
the Board of Directors shall request or delegate and, unless the Board of
Directors or the President otherwise provides, shall perform such other duties
as are generally performed by vice presidents with equivalent restrictions, if
any, on title. In the absence of the President or in the event of his death or
inability to act, the Vice Presidents shall perform the duties of the President,
and when so acting, shall have all the powers of and be subject to all the
restrictions upon the President; provided, however, that if there is more than
one Vice President, any Vice President shall have the authority to execute
agreements, certificates and other instruments on behalf of the Company, subject
to all the restrictions upon the President relating to such functions, but all
other duties of the President shall be performed by the Vice President
designated to perform such duties at the time of his appointment, or in the
absence of any designation, then by the Vice President with the most seniority
in office (or if more than one Vice President is appointed at the same meeting,
by the Vice President first listed in the action appointing them), and when so
acting shall have all the powers of and be subject to all the restrictions upon
the President.
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Section 8. Secretary. The Secretary shall prepare minutes of all
meetings of the shareholders of the Company and the Board of Directors, shall
have charge of the minute books, share records and seal of the Company, shall
authenticate records of the Company, and shall perform such other duties and
have such other powers that are from time to time assigned by the Chairman of
the Board, the President or the Board of Directors.
Section 9. Treasurer. The Treasurer is the chief financial officer
of the Company, and without limiting the foregoing, shall be charged with the
management of the financial affairs of the Company. The Treasurer shall perform
all of the duties incident to the office of treasurer and such other duties that
are from time to time assigned by the Chairman of the Board, the President or
the Board of Directors.
ARTICLE VII
Stock
Section 1. Stock Certificates. Stock certificates shall be issued
in consecutive order and shall be in a form or forms prescribed by the Board of
Directors and shall be numbered in the order in which they are issued. They
shall be signed by the Chairman of the Board, the President or a Vice President
and the Secretary or an Assistant Secretary, and if there is a seal of the
Company, such seal (or a facsimile of it) shall be affixed to share
certificates. Signatures on a share certificate may be facsimiles but in such
case the certificate must be countersigned by a transfer agent or registered by
a registrar other than the Company or an employee of the Company.
Section 2. Transfers of Shares. Transfers of shares shall be made
in the share records of the Company upon surrender of the certificate for such
shares signed by the person in whose name the certificate is registered or on
his behalf by a person legally authorized so to sign (or accompanied by a
separate stock transfer power so signed) and otherwise in accordance with
applicable law, and subject to such other requirements as may be imposed by the
Company.
Section 3. Lost Certificates. The Company may issue a new stock
certificate in place of any certificate previously issued by the Company and
alleged to have been lost, stolen or destroyed upon the making of an affidavit
of that fact by the person claiming the certificate to be lost, stolen or
destroyed and, if the Company deems it appropriate, the delivery of a commercial
indemnity bond issued by a company approved by the Company in such sum as the
Company may direct as indemnity against any claim that may be made against the
Company with respect to the certificate alleged to have been lost, stolen or
destroyed. The Company may also authorize the Company's transfer agent or
registrar, if any, to issue replacement certificates on such terms and
conditions as the Company specifies.
Section 4. Regulations. Transfer Agents and Registrars. The Board
of Directors may make all such rules and regulations as it may deem expedient
concerning the issuance, transfer, conversion, registration and cancellation of
share certificates not inconsistent with applicable law,
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the Articles of Incorporation or the Bylaws of the Company. The Board of
Directors may appoint one or more transfer agents or registrars, or both, and
may require all share certificates to bear the signature of a transfer agent or
registrar or both.
ARTICLE VIII
Indemnification of Officers and Directors
Section 1. Indemnification.
(1) General. Pursuant to GBCC ss.14-2-859(a), the Company
shall indemnify, and shall advance funds to pay for or reimburse expenses to,
each person who:
(a) is or was a director or officer of the Company
(including the heirs, executors, administrators or estate of such
person); or
(b) while holding a status described in (a) above, is
or was serving at the request of the Company as a director, officer,
partner, trustee, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise
to the fullest extent permitted under, and in accordance with the procedures
required by, the GBCC.
(2) Subsequent Amendment. No amendment, termination or
other elimination of this Article V or of any relevant provisions of the GBCC or
of any other applicable law shall affect or diminish in any way the rights to
indemnification under this Article V with respect to any action, suit or
proceeding arising out of, or relating to, any event or act or omission
occurring or fact or circumstance existing prior to such amendment, termination
or other elimination.
(3) Other Rights; Indemnification Agreements. The
indemnification and advancement of expenses provided by, or granted pursuant to,
this Article V shall not be deemed exclusive of any other rights permitted by
applicable law to which a person seeking indemnification or advancement of
expenses may be entitled, whether by contract or otherwise. Nothing contained in
this Article V shall be deemed to prohibit, and the Company is specifically
authorized to enter into, agreements which provide indemnification rights and
procedures permitted by the GBCC.
(4) Continuation of Right to Indemnification. All rights to
indemnification under this Article V (including those arising pursuant to
subsection (3) above) shall continue as to a person who has ceased to be a
director or officer, shall inure to the benefit of heirs, executors,
administrators and the estate of such person, and shall be deemed to be a
contract between the Company and each such person or entity. This Article V
shall be binding upon any successor corporation to the Company, whether by way
of merger, consolidation, liquidation, dissolution or otherwise. This Article V
shall obligate the Company to indemnify and advance expenses to
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directors and officers of Preferred Networks, Inc., a Delaware corporation and
predecessor to the Company, in the same manner as officers and directors of the
Company.
(5) Savings Clause. If this Article V or any portion of it
shall be invalidated on any ground by any court of competent jurisdiction, then
the Company shall nevertheless indemnify persons specified in this Article V to
the full extent permitted by any applicable portion of this Article V that shall
not have been invalidated and to the full extent permitted by applicable law.
(8) Insurance. The Company may purchase and maintain
insurance on behalf of an individual who is a director, officer, employee, or
agent of the Company or who, while a director, officer, employee, or agent of
the Company, serves at the Company's request as a director, officer, partner,
trustee, employee or agent of another domestic or foreign corporation,
partnership, joint venture, trust, employee benefit plan, or other entity
against liability asserted against or incurred by him or her in that capacity or
arising from his or her status as a director, officer, employee, or agent,
whether or not the Company would have the power to indemnify or advance expenses
to him or her against the same liability under these Bylaws and the GBCC.
ARTICLE IX
Amendments
Subject to the Articles of Incorporation, these Bylaws and the GBCC,
these Bylaws may be amended (or repealed and new bylaws adopted) by the
shareholders of the Company or by the Board of Directors. The shareholders of
the Company may provide expressly that any bylaws adopted, amended or repealed
by them shall not be amended or repealed by the Board of Directors. A provision
of the Bylaws limiting the authority of the Board or establishing staggered
terms for directors may only be adopted, amended or repealed by the shareholders
of the Company.
* * * * *
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