<PAGE> 1
As filed with the Securities and Exchange Commission on August 18, 1997
Registration No. __-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
--------------------
PREFERRED NETWORKS, INC.
(Exact Name of Registrant as specified in its Charter)
--------------------
Georgia 58-1954892
(State of Incorporation) (I.R.S. Employer Identification No.)
850 Center Way 30071
Norcross, Georgia (Zip Code)
(Address of Principal Executive Offices)
PREFERRED NETWORKS, INC. 1995 STOCK OPTION PLAN, AS AMENDED
(Full Title of the Plan)
Mark H. Dunaway with copies to:
Chief Executive Officer Mark D. Kaufman
Preferred Networks, Inc. Sutherland, Asbill & Brennan LLP
850 Center Way 999 Peachtree Street, N. E.
Norcross, Georgia 30071 Atlanta, Georgia 30309-3996
(404) 853-8000
(Name and Address of Agent for Service)
(770) 582-3500
(Telephone Number, including Area Code, of Agent for Service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================================
Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate offering Amount of
to be registered registered per share(1) price(1) registration fee
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
no par value 1,000,000 shares(2) $2.0625 $2,062,500 $625.00
===========================================================================================================================
</TABLE>
(1) The price is estimated in accordance with Rule 457(h) under the Securities
Act of 1933, as amended (the "Securities Act"), solely for the purpose of
calculating the registration fee, and represents the average of the bid and
asked price of the Common Stock on the Nasdaq Stock Market on August 14, 1997.
(2) This represents the maximum number of shares of the Registrant's no par
value Common Stock that could be acquired upon exercise of options and stock
appreciation rights issuable under the PNI 1995 Stock Option Plan, as amended,
covered by this registration statement.
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<PAGE> 2
On June 16, 1997, the stockholders of the Registrant approved the
Registrant's 1995 Stock Option Plan, as amended. The Registrant previously
registered 1,374,450 shares of its Common Stock issuable under the 1995 Stock
Option Plan on Registration Statement No. 333-3962. This Registration Statement
is being filed to register 1,000,000 additional shares of the Registrant's
Common Stock issuable under the amended plan.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Item 1. Plan Information*
Item 2. Registrant Information and Employee Plan Annual Information*
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with Rule
428 under the Securities Act and the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents filed by Preferred Networks, Inc. (the
"Company") with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), are incorporated herein by reference as of their respective dates:
(a) The Company's Annual Report on form 10-K for the year ended
December 31, 1996;
(b) All other reports filed by the Company pursuant to Section 13(a)
or 15(d) of the Exchange Act since the end of the fiscal year covered by the
Company's annual report referred to in (a) above; and
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, filed on January 30, 1996, as
amended by any amendment or report filed for the purpose of updating the
description of the Company's Common Stock contained therein.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act subsequent to the date hereof and 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 in this Registration
Statement and to be a part hereof from the date of filing of such documents.
Any statement contained in any of such documents hereby incorporated by
reference will be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein modifies
or supersedes such statement. Any such statement so modified or superseded will
not be deemed, except as so modified or superseded, to constitute a part of
this Registration Statement.
Pursuant to Part II, Item 3 of Form S-8, none of the documents
incorporated by reference into this Registration Statement from this Part II,
Item 3, have been filed with the Registration Statement.
Item 4. Description of Securities
Not applicable.
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Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
ARTICLES OF INCORPORATION
Article Eight of the Articles of Incorporation of the Company provides
that a director of the Company will not be liable to the Company 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 Company, (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 Georgia Business Corporation Code (the "GBCC") (dealing with payment of
unlawful dividends), or (d) for any transaction from which the director
received an improper personal benefit. The Articles of Incorporation provide
that if the GBCC is amended to further eliminate or limit the personal
liability of directors, then the liability of a director of the Company shall
be eliminated or limited to the fullest extent permitted by the GBCC, as so
amended. The Articles of Incorporation also provide that any repeal or
modification of Article VIII of the Articles of Incorporation by the
shareholders of the Company shall not adversely affect any right or protection
of a director of the Company existing at the time of such repeal or
modification.
BYLAWS
Under Article Five of the Company's Bylaws, the Company is required to
indemnify, and 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. No amendment,
termination, or other elimination of Article Five of the Bylaws 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 the Bylaws 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. The indemnification and
advancement of expenses provided by, or granted pursuant to, the Company's
Bylaws are not 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. All rights to indemnification under
Article Five of the Bylaws continue as to a person who has ceased to be a
director or officer and shall be deemed to be a contract between the Company
and each such person. The Company's Bylaws obligate the Company to indemnify
and advance expenses to 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.
INSURANCE
The Company currently maintains an insurance policy providing
reimbursement of indemnification payments to officers and directors of the
Company and its subsidiaries and reimbursement of certain liabilities incurred
by directors and officers of the Company and its subsidiaries in their
capacities as such to the extent that they are not indemnified by the Company.
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<PAGE> 4
DIRECTOR INDEMNIFICATION AGREEMENTS
The Company has entered into indemnity agreements with its Directors
providing that the Company agrees to indemnify and hold harmless its Directors
to the fullest extent permitted by the Articles of Incorporation, Bylaws and
GBCC. These indemnification agreements also provide indemnification beyond the
limits of the GBCC, including indemnification of directors for judgments and
fines in connection with actions brought by or in the right of the Company.
GEORGIA BUSINESS CORPORATION CODE
Section 14-2-851 of the GBCC authorizes a Georgia corporation to
indemnify a director against liability incurred in a threatened, pending or
completed legal proceeding by virtue of the fact that he is or was a director
of the Company if it is determined that (a) the director acted in good faith,
and (b) the director reasonably believed (i) in the case of conduct in his
official capacity, that such conduct was in the best interests of the
corporation, (ii) in all other cases, that such conduct was at least not
opposed to the best interests of the corporation, and (iii) in the case of any
criminal proceeding, that the director had no reasonable cause to believe such
conduct was unlawful; provided, however, that a Georgia corporation may not
indemnify a director under Section 14-2-851 of the GBCC in connection with a
proceeding by or in the right of the corporation, except for reasonable
expenses incurred in connection with the proceeding if it is determined that
the director meets the relevant standard of conduct under Section 14-2-852 of
the GBCC, or in connection with any proceeding where the director was adjudged
liable on the basis that he received an improper personal benefit regardless of
whether the director was acting in his official capacity.
In order for indemnification to be permitted under GBCC Section
14-2-851, a determination must be made that the statutory standard of conduct
has been met. Such a determination must have been made (a) in the case where
there are two or more disinterested directors, by the board of directors by a
majority vote of all the disinterested directors (a majority of whom shall for
such purpose constitute a quorum) or by a majority of the members of a
committee of two or more disinterested directors appointed by such a vote, (b)
by special legal counsel, or (c) by the shareholders, but shares owned by or
voted under the control of a director who at the time does not qualify as a
disinterested director may not be voted on the determination. In addition,
authorization of indemnification or an obligation to indemnify and evaluation
as to reasonableness of expenses are to be made in the same manner as the
determination that indemnification is permissible, except that if there are
fewer than two disinterested directors or if the determination is made by
special legal counsel, the authorization of indemnification and evaluation as
to the reasonableness of expenses are to be made by the board of directors.
Section 14-2-852 of the GBCC provides for the mandatory
indemnification of a director who was wholly successful, on the merits or
otherwise, in the defense of any threatened, pending or completed legal
proceeding to which he was a party because he was a director of the corporation
against reasonable expenses incurred in connection with the proceeding. In
addition, Section 14-2-853 of the GBCC provides that a corporation may, before
the final disposition of a proceeding, advance funds to pay for or reimburse
the reasonable expenses incurred by a director who is a party to a proceeding
because he is a director of the Company, if the director provides a written
affirmation that he is entitled to indemnification and agrees to repay any
funds advanced if it is ultimately determined that he is not so entitled.
Section 14-2-854 of the GBCC authorizes the indemnification of or the
advancement of expenses to a director by a court order if the court determines
that the director is entitled to mandatory indemnification, or is fairly and
reasonably entitled to indemnification in view of all the relevant
circumstances, whether or not the director met the statutory standard of
conduct, failed to comply with the statutory standards governing advancement of
funds to pay for or reimburse a director for expense of funds, or was adjudged
liable in connection with either a proceeding by or in the right of the
corporation or a proceeding in which he was found to have received an improper
personal benefit; provided, however, that if a director is adjudged so liable,
the indemnification is limited to reasonable expenses incurred in connection
with the proceeding.
Section 14-2-856 of the GBCC permits a Georgia corporation, as long as
that corporation is authorized by its articles of incorporation or bylaws, or a
contract or resolution approved or ratified by the shareholders, to indemnify a
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<PAGE> 5
director made a party to a proceeding, including a proceeding brought by or in
the right of the corporation for damages as well as expenses incurred in such a
proceeding, except that a director may not be indemnified for any liability
incurred in a proceeding in which the director is adjudged liable to the
corporation or is subjected to injunctive relief in favor of the corporation
(i) for any appropriation, in violation of the director's duties, of any
business opportunity of the corporation, (ii) for acts or omissions involving
intentional misconduct or a knowing violation of law, (iii) for liability
resulting from unlawful distributions, or (iv) for any transaction from which
he received an improper personal benefit.
Section 14-2-857 of the GBCC permits a Georgia corporation to
indemnify an officer to the same extent as a director, and if the officer is
not a director, to such further extent as is provided by the articles of
incorporation, bylaws, resolution of the board of directors, or contract,
except for liability arising out of conduct that constitutes appropriation in
violation of the officer's duties of any business opportunity of the
corporation, acts or omissions involving intentional misconduct or a knowing
violation of law, liability for unlawful distributions, or receipt of an
improper personal benefit. Section 14-2-857 of the GBCC also provides for the
mandatory indemnification or indemnification by court order of an officer who
is not a director to the same extent as a director. In addition, Section
14-2-857 of the GBCC permits a Georgia corporation to indemnify and advance
expenses to an employee or agent who is not a director to the extent,
consistent with public policy, that is provided by its articles of
incorporation, bylaws, general or specific action of its board of directors, or
contract.
Section 14-2-858 of the GBCC permits a Georgia corporation to purchase
and maintain insurance on behalf of an individual who is a director, officer,
employee, or agent of the corporation or who, while a director, officer,
employee, or agent of the corporation, serves at the corporation'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 in that
capacity or arising from his status as a director, officer, employee, or agent,
whether or not the corporation would have power to indemnify or advance
expenses to him against the same liability under the GBCC.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
4.1 Articles of Incorporation of the Company (incorporated herein by
reference to Exhibit 3.1 to the Company's Current Report on Form 8-K
filed on June 30, 1997).
4.2 Bylaws of the Company (incorporated herein by reference to Exhibit 3.2
to the Company's Current Report on Form 8-K filed on June 30, 1997).
4.3 Preferred Networks, Inc. 1995 Stock Option Plan, as amended
(incorporated herein by reference to Exhibit B to the Company's
definitive Proxy Statement on Form 14A filed on May 21, 1997).
5 Opinion of Sutherland, Asbill & Brennan LLP regarding legality.
23.1 Consent of Sutherland, Asbill & Brennan LLP is contained in Exhibit 5.
23.2 Consent of Ernst & Young LLP.
23.3 Consent of Price Waterhouse LLP.
24 Power of Attorney by each of the Directors of the Company appointing
Mark H. Dunaway and Kathryn L. Putnam as attorney-in-fact is located
at page 7 of this Registration Statement.
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<PAGE> 6
Item 9. 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;
(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;
(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) 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 by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act 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 the 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, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) 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 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
Securities 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
Securities Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Norcross, State of Georgia, on August 18, 1997.
PREFERRED NETWORKS, INC.
By:/s/ Mark H. Dunaway
--------------------------------
Mark H. Dunaway
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Mark H. Dunaway and Kathryn L. Putnam
and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments to this
Registration Statement and to file the same with all exhibits thereto, and
other documents in connection therewith, with the Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
<S> <C> <C>
/s/ Mark H. Dunaway Chief Executive Officer and Director August 18, 1997
- ------------------------------------
Mark H. Dunaway
/s/ Kathryn L. Putnam Chief Financial Officer and Principal August 18, 1997
- ------------------------------------ Financial and Accounting Officer
Kathryn L. Putnam
/s/ Michael J. Saner President and Director August 18, 1997
- ------------------------------------
Michael J. Saner
/s/ William H. Bang Director August 18, 1997
- ------------------------------------
William H. Bang
</TABLE>
[Signatures continued on next page]
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<PAGE> 8
<TABLE>
<S> <C> <C>
/s/ John J. Hurley Director August 18, 1997
- ------------------------------------
John J. Hurley
Director
- ------------------------------------
Jeffrey H. Schutz
/s/ Robert Van Degna Director August 18, 1997
- ------------------------------------
Robert Van Degna
/s/ Ronald W. White Director August 18, 1997
- ------------------------------------
Ronald W. White
</TABLE>
<PAGE> 9
INDEX TO EXHIBITS
-----------------
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
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<S> <C>
4.1 Articles of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 to the
Company's Current Report on Form 8-K filed on June 30, 1997).
4.2 Bylaws of the Company (incorporated herein by reference to Exhibit 3.2 to the Company's Current
Report on Form 8-K filed on June 30, 1997).
4.3 Preferred Networks, Inc. 1995 Stock Option Plan, as amended (incorporated herein by reference
to Exhibit B to the Company's definitive Proxy Statement on Form 14A filed on May 21, 1997).
5 Opinion of Sutherland, Asbill & Brennan LLP regarding legality.
23.1 Consent of Sutherland, Asbill & Brennan LLP is contained in Exhibit 5.
23.2 Consent of Ernst & Young LLP.
23.3 Consent of Price Waterhouse LLP.
24 Power of Attorney by each of the Directors of the Company appointing Mark H. Dunaway and
Kathryn L. Putnam as attorney-in-fact is located at page 7 of this Registration Statement.
</TABLE>
<PAGE> 1
EXHIBIT 5
[LETTERHEAD OF SUTHERLAND, ASBILL & BRENNAN LLP]
August 8, 1997
Preferred Networks, Inc.
850 Center Way
Norcross, Georgia 30071
Ladies and Gentlemen:
We are acting as your counsel in connection with the registration of
1,000,000 shares of Common Stock, no par value (the "Shares"), of Preferred
Networks, Inc., a Georgia corporation. The Shares are being registered with the
Securities and Exchange Commission under a Registration Statement on Form S-8
(the "Registration Statement"). The Shares are to be offered pursuant to the
Preferred Networks, Inc. 1995 Stock Option Plan, as amended (the "Plan"). We
are familiar with the relevant documents and materials used in preparing the
Registration Statement and related prospectus (the "Prospectus").
Based on our review of the relevant documents and materials, it is
our opinion that when (a) the Registration Statement shall have become
effective, and (b) the Shares shall have been issued upon the terms and
conditions set forth in the Plan, the Registration Statement and the
Prospectus, then the Shares will be legally issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
SUTHERLAND, ASBILL & BRENNAN LLP
By: /s/ Mark D. Kaufman
--------------------------------------
Mark D. Kaufman
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the Preferred Networks, Inc. 1995 Stock Option Plan, as
amended, of our report dated April 14, 1997, with respect to the consolidated
financial statements and schedule of Preferred Networks, Inc. included in its
Annual Report on Form 10-K for the year ended December 31, 1996, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
------------------------------
Ernst & Young LLP
Atlanta, Georgia
August 6, 1997
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Post-effective
Amendment No. 1 to the Registration Statement on Form S-8 of Preferred
Networks, Inc. 1995 Stock Option Plan, as amended, of our report dated February
10, 1995, except as to the first paragraph of Note 5 which is as of January 24,
1996, appearing on page 25 of the December 31, 1996 Annual Report on Form 10-K.
We also consent to the incorporation by reference of our report on the
Financial Statement Schedules, which appears on page 59 of the December 31,
1996 Form 10-K.
/s/ Price Waterhouse LLP
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PRICE WATERHOUSE LLP
Atlanta, Georgia
August 10, 1997
