<PAGE> 1
As filed with the Securities and Exchange Commission on December 11, 1998
Registration No. 333-_____
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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
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<S> <C> <C> <C> <C>
Common Stock,
no par value 1,000,000 shares(2) $.4375 $437,500 $122
</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 December 10, 1998.
(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 May 28, 1998, 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, and an additional 1,000,000
shares on Registration Statement No. 333-33879. 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, 1997;
(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.
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Item 4. Description of Securities
Not applicable.
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 or she is or was a
director of the Company if (a) the director acted in good faith, and (b) the
director reasonably believed (i) in the case of conduct in his or her 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 14-2-851 of the GBCC, or in connection with any
proceeding where the director was adjudged liable on the basis that he or she
received an improper personal benefit regardless of whether the director was
acting in his or her 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 or she was a party because he or she 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 or she is a director of the Company, if the
director provides a written affirmation that he or she is entitled to
indemnification and agrees to repay any funds advanced if it is ultimately
determined that he or she 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
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<PAGE> 5
a director made a party to a proceeding, including a proceeding brought by or in
the right of the corporation (such as a shareholders' derivative suit), 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 or she 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 or her 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 A to the Company's
definitive Proxy Statement on Form 14A filed on April 29, 1998).
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.
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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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. Notwithstanding the foregoing, any increase or decrease in 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 percent 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) 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 of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act 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 Securities Act of 1933 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 of 1933 and will be governed by the final adjudication of such
issue.
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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-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 December 11, 1998.
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 of 1933, 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 December 11, 1998
- -----------------------------
Mark H. Dunaway
/s/ Kathryn L. Putnam Chief Financial Officer and Principal December 11, 1998
- ----------------------------- Financial and Accounting Officer
Kathryn L. Putnam
/s/ Michael J. Saner President and Director December 11, 1998
- -----------------------------
Michael J. Saner
/s/ William H. Bang Director December 11, 1998
- -----------------------------
William H. Bang
/s/ Robert F. Benbow Director December 11, 1998
- -----------------------------
Robert F. Benbow
/s/ Richard P. Campbell Director December 11, 1998
- -----------------------------
Richard P. Campbell
</TABLE>
[Signatures continued on next page]
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<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
<S> <C> <C>
/s/ John J. Hurley Director December 11, 1998
- -----------------------------
John J. Hurley
/s/ Jeffrey H. Schutz Director December 11, 1998
- -----------------------------
Jeffrey H. Schutz
Director December 11, 1998
/s/ Robert Van Degna
- -----------------------------
Robert Van Degna
/s/ Ronald W. White Director December 11, 1998
- -----------------------------
Ronald W. White
</TABLE>
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
<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 A to the
Company's definitive Proxy Statement on Form 14A filed on
April 29, 1998).
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.
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>
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EXHIBIT 5
SUTHERLAND, ASBILL & BRENNAN LLP
999 Peachtree Street, N.E.
Atlanta, Georgia 30309-3996
December 8, 1998
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 Auditors
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 reports dated March 23, 1998, 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, 1997, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Atlanta, Georgia
December 8, 1998
