<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Preferred Networks, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
----------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
(Preferred Networks, Inc. Logo)
May 8, 2000
Dear Preferred Networks Owner:
You are cordially invited to attend the Annual Meeting of Stockholders to
be held on June 8, 2000, at 10:00 a.m., local time, at Preferred Networks, Inc.,
850 Center Way, Norcross, Georgia.
At the annual meeting, you will be asked to approve the election of two
directors for a three-year term. The accompanying proxy statement contains more
information describing these matters. Your Board of Directors recommends that
all stockholders vote in favor of these actions.
Your vote is important. Whether or not you plan to attend the annual
meeting in person and regardless of the number of shares you own, I urge you to
complete, sign and date the enclosed proxy card and return it in the enclosed
prepaid envelope as soon as possible. You may, of course, attend the annual
meeting and vote in person, even if you have previously returned your proxy
card.
We value your support as owners of our company, and we thank you in advance
for your participation.
Very truly yours,
/s/ Mark H. Dunaway
Mark H. Dunaway
Chairman of the Board
and Chief Executive Officer
<PAGE> 3
(PREFERRED NETWORKS, INC. LOGO)
850 CENTER WAY
NORCROSS, GEORGIA 30071
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 8, 2000
You are cordially invited to attend the 2000 Annual Meeting of Stockholders
(the "Meeting") of Preferred Networks, Inc. (the "Company") to be held on June
8, 2000, at 10:00 a.m., local time, at 850 Center Way, Norcross, Georgia 30071,
for the following purposes:
1. To elect two members of the Board of Directors; and
2. To transact such other business as may properly come before the
Meeting.
Only stockholders of record at the close of business on April 28, 2000,
will be entitled to notice of, and to vote at, the Meeting or any adjournment of
the Meeting.
WHETHER OR NOT YOU EXPECT TO BE AT THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY WHICH IS BEING SOLICITED BY THE BOARD OF DIRECTORS, AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE. YOUR PROXY WILL BE VOTED WITH RESPECT TO THE
MATTERS IDENTIFIED THEREON IN ACCORDANCE WITH ANY SPECIFICATIONS ON THE PROXY.
If you plan to attend the Meeting and wish to vote your shares personally, you
may do so at any time before the Proxy is voted.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Mark B. Jones
Mark B. Jones
Secretary
May 8, 2000
<PAGE> 4
PREFERRED NETWORKS, INC.
850 CENTER WAY
NORCROSS, GEORGIA 30071
---------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 8, 2000
This Proxy Statement is furnished to stockholders of Preferred Networks,
Inc. (the "Company") in connection with the solicitation of proxies for use at
the 2000 Annual Meeting of Stockholders of the Company to be held at the
Company's executive offices at 850 Center Way, Norcross, Georgia 30071, on
Thursday, June 8, 2000, at 10:00 a.m., local time, and at any and all
adjournments or postponements thereof (the "Meeting"), for the purposes set
forth in the accompanying Notice of Annual Meeting of Stockholders. The
Company's Annual Report to Stockholders for the year ended December 31, 1999 is
being mailed with this Proxy Statement. This Proxy Statement and the enclosed
form of proxy were first sent or given to stockholders on or about May 8, 2000.
This solicitation is made on behalf of the Board of Directors of the
Company. Directors, officers and employees of the Company and its affiliates may
also solicit proxies by telephone, telecopier, or personal interview but will
not receive additional compensation for the solicitation activities. The Company
will reimburse banks, brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy material
to beneficial owners. In addition, the Company has retained Georgeson & Co.,
Inc. to assist in the solicitation of proxies, at a fee of $5,000.
ACTIONS TO BE TAKEN UNDER THE PROXY
In voting on the election of directors, shareholders may vote in favor of
all nominees or withhold their votes as to some or all nominees. Unless other
instructions are indicated on the proxy card, all properly executed proxies
received by the Company will be voted FOR the election of all of the nominees
for director set forth below under "Election of Directors." Some proxies may be
broker non-votes (marked to indicate that the shares are not being voted on any
one or all proposals).
The election of directors will require the affirmative vote of a plurality
of the shares represented at the Meeting, in person or by proxy, and entitled to
vote thereon. Votes withheld and broker non-votes will not be included in vote
totals for director nominees and will have no effect on the outcome of the vote.
The presence, in person or by proxy, of at least a majority of the total
number of outstanding shares of stock that are entitled to vote at the Meeting
must be present in person, or by proxy, in order to have the quorum that is
necessary for the transaction of business at the Meeting. Any proxy authorized
to be voted at the Meeting on any matter (including on routine matters pursuant
to the discretionary authority granted in management's proxy) whether or not the
proxy is marked to "WITHHOLD AUTHORITY", to "ABSTAIN" or to effect a broker
non-vote on any proposal, will be counted in establishing a quorum.
Any stockholder giving a proxy may revoke it at any time before it is
exercised by giving written notice of revocation, or a duly executed proxy
bearing a later date, to the Secretary of the Company. In order to be effective,
such notice or later dated proxy must be received by the Company prior to the
exercise of the earlier proxy. A stockholder may attend the Meeting, revoke his
proxy and vote in person.
STOCK OWNERSHIP
Only holders of record of shares of the no par value common stock ("Common
Stock"), Class A Redeemable Preferred Stock (the "Class A Preferred"), and Class
B Senior Redeemable Preferred Stock (the "Class B Preferred") as of the close of
business on the record date of April 28, 2000 (the "Record
1
<PAGE> 5
Date") are entitled to receive notice of, and to vote at, the Meeting. Each
holder of record of the Common Stock is entitled to one vote per share for every
matter to be voted upon by the stockholders at the Annual Meeting. Each holder
of record of the Class A Preferred and Class B Preferred is entitled to one vote
per share for every matter to be voted upon by the stockholders at the Meeting.
As of the Record Date, there were 16,544,417 shares of Common Stock outstanding,
10,000,000 shares of Class A Preferred outstanding, and 5,333,336 shares of
Class B Preferred outstanding.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 13, 2000, certain information
with respect to the beneficial ownership of shares of Common Stock, Class A
Preferred, and Class B Preferred of (i) all stockholders known by the Company to
be the beneficial owners of more than 5% of its outstanding Common Stock, Class
A Preferred, and Class B Preferred, as determined pursuant to Rule 13d-3 ("Rule
13d-3") promulgated by the Securities and Exchange Commission (the "SEC"), (ii)
each director of the Company and each Named Executive Officer (as defined
below), and (iii) all directors and executive officers as a group. The following
table is based in part on information provided in Schedule 13Ds and Schedule
13Gs furnished to the Company. Except as otherwise indicated, the holders listed
below have sole voting and investment power with respect to all shares
beneficially owned by them.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
----------------------------------------- PERCENTAGE
ACQUIRABLE OF CLASS
NAME OF BENEFICIAL OWNER OR GROUP TITLE OF CURRENTLY WITHIN 60 PERCENTAGE ASSUMING
(AND ADDRESS OF 5% STOCKHOLDER) CLASS OWNED DAYS OF CLASS(1) FULL DILUTION(1)
- --------------------------------------- ----------------- --------- ---------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
Mark H. Dunaway(2)..................... Common 2,307,825 246,750(3) 15.21% 7.37%
Chairman of the Board and Class B Preferred 66,667 -- 1.25% 1.25%
Chief Executive Officer
944 Gatewood Court
Atlanta, Georgia 30327
Kathryn Loev Putnam(4)................. Common 5,211 205,605(3) 1.26% *
Senior Vice President and
Chief Financial Officer Class B Preferred 66,667 -- 1.25% 1.25%
Andrew M. Degges....................... Common 0 38,333(3) * *
Senior Vice President of Engineering
& Technology
Mark B. Jones.......................... Common 400 90,141(3) * *
Vice President of Legal Affairs
William H. Bang........................ Common 17,500(5) -- * *
Director
John J. Hurley(6)...................... Common 14,000(5) 67,500 * *
Director Class B Preferred 66,667 -- 1.25% 1.25%
Robert M. Van Degna(7)................. Common 1,057,500(5) 4,301,032 25.71% 15.46%
Director Class A Preferred 3,400,000 -- 34.00% 34.00%
Class B Preferred 386,205 -- 7.24% 7.24%
Robert F. Benbow(8).................... Common 12,500(5) 3,712,500 18.39% 10.75%
Director Class B Preferred 3,666,667 -- 68.75% 68.75%
Richard P. Campbell(9)................. Common 1,055,002(5) 1,771,032 15.43% 8.15%
Director Class A Preferred 1,200,000 -- 12.00% 12.00%
Class B Preferred 386,205 -- 7.24% 7.24%
Alta Communications VI, L.P.(10)....... Common -- 3,712,500 18.33% 10.71%
One Post Office Square, Suite 3800 Class B Preferred 3,666,667 -- 68.75% 68.75%
Boston, Massachusetts 02109
Centennial Fund IV, L.P.(11)........... Common 174,502(5) 3,717,408 19.21% 11.23%
1428 Fifteenth Street Class A Preferred 3,133,333 -- 31.33% 31.33%
Denver, Colorado 80202 Class B Preferred 112,667 -- 2.11% 2.11%
Saugatuck Capital Company L.P. Common 1,055,002(5) 1,771,032 15.43% 8.15%
III(12)..............................
One Canterbury Green Class A Preferred 1,200,000 -- 12.00% 12.00%
Stamford, Connecticut 06901 Class B Preferred 386,205 -- 7.24% 7.24%
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
----------------------------------------- PERCENTAGE
ACQUIRABLE OF CLASS
NAME OF BENEFICIAL OWNER OR GROUP TITLE OF CURRENTLY WITHIN 60 PERCENTAGE ASSUMING
(AND ADDRESS OF 5% STOCKHOLDER) CLASS OWNED DAYS OF CLASS(1) FULL DILUTION(1)
- --------------------------------------- ----------------- --------- ---------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
PNC Capital Corp.(13).................. Common 416,997 1,460,118 10.43% 5.42%
3150 CNG Tower Class A Preferred 1,133,333 -- 11.33% 11.33%
625 Liberty Avenue Class B Preferred 154,849 -- 2.90% 2.90%
Pittsburgh, Pennsylvania 15222
Primus Capital Fund III Limited........ Common 521,250 1,499,159 11.20% 5.83%
Partnership(14) Class A Preferred 1,133,333 -- 11.33% 11.33%
5900 Landerbrook Drive, Suite 200 Class B Preferred 193,408 -- 3.63% 3.63%
Cleveland, Ohio 44124
Fleet Venture Resources, Inc.(15)...... Common 1,042,500 4,301,032 25.63% 15.42%
50 Kennedy Plaza Class A Preferred 3,400,000 -- 34.00% 34.00%
Providence, Rhode Island 02903 Class B Preferred 386,205 -- 7.24% 7.24%
Webbmont Holdings L.P.(16)............. Common 1,893,872 101,250 11.99% 5.76%
1355 Peachtree Street, Suite 1100 Class B Preferred 100,000 1.87% 1.87%
Atlanta, Georgia 30309
Richard H. Stewart(17)................. Common 1,034,294 67,500 6.63% 3.18%
P.O. Box 2266 Class B Preferred 66,667 1.25% 1.25%
Beaufort, South Carolina 29901
All executive officers and directors as
a group (9 persons)(18) Common 4,469,938 10,432,893(1) 55.24% 42.99%
Class A Preferred 4,600,000 -- 46.00% 46.00%
Class B Preferred 4,639,078 -- 86.98% 86.98%
</TABLE>
- ---------------
* Less than one percent
(1) The Percentage of Class assumes the exercise of only the outstanding
warrants and options exercisable within 60 days held by each respective
beneficial owner and member of management. The Percentage of Class Assuming
Full Dilution assumes the exercise of all warrants and options by all
stockholders exercisable within the next 60 days.
(2) Includes 2,307,825 shares of Common Stock, 66,667 shares of Class B
Preferred and warrants to acquire 67,500 shares of Common Stock jointly
held with Marcia M. Dunaway, Mr. Dunaway's spouse.
(3) Includes shares subject to stock options granted pursuant to the Company's
stock option plans and, in the case of Mr. Dunaway, warrants to acquire
67,500 shares of Common Stock acquired in connection with his purchase of
Class B Preferred.
(4) Reflects 66,667 shares of Class B Preferred and warrants to acquire 67,500
shares of Common Stock owned by certain family members. Ms. Putnam
disclaims any beneficial ownership of the Class B Preferred and warrants to
acquire 67,500 shares of Common Stock held by family members. The total
shares acquirable within 60 days also includes warrants to acquire 4,772
shares of Common Stock with respect to which Ms. Putnam has a beneficial
interest and may be deemed to share voting and investment power.
(5) Includes shares awarded pursuant to the Company's 1995 Non-Employee
Restricted Stock Award Plan, which are subject to restrictions on transfer
that lapse over five years.
(6) Includes 66,667 shares of Class B Preferred and warrants to acquire 67,500
shares of Common Stock jointly held with Sylvia Hurley, Mr. Hurley's
spouse.
(7) Includes 271,049 shares of Common Stock, 1,002,000 shares of Class A
Preferred, 115,861 shares of Class B Preferred, and warrants to acquire
1,269,610 shares of Common Stock held by Fleet Equity Partners VI, L.P.
("FEP"), 632,450 shares of Common Stock, 2,338,000 shares of Class A
Preferred, 270,344 shares of Class B Preferred, and warrants to acquire
2,962,422 shares of Common Stock held by Fleet Venture Resources, Inc.
("FVR"), and 139,001 shares of Common Stock, 60,000 shares of Class A
Preferred, and warrants to acquire 69,000 shares of Common Stock held by
Chisholm Partners II L.P. ("CPII"). Mr. Van Degna is Chairman and CEO of
Fleet Growth Resources II, Inc. and Chairman and CEO of Silverado IV Corp.,
the general partners of FEP and he is a limited partner of FEP. Mr. Van
Degna is Chairman and CEO of FVR, and he is Chairman and CEO of Silverado
II Corp., the general partner of Silverado II, L.P. which is the general
partner of CPII. Mr. Van Degna is also a limited partner of Silverado II,
L.P. As Chairman and CEO of Fleet Growth Resources II, Inc.
3
<PAGE> 7
and Chairman and CEO of Silverado II Corp., Mr. Van Degna may be deemed to
share voting and investment power with respect to such shares. Mr. Van
Degna disclaims beneficial ownership of all shares of Common Stock, Class A
Preferred, Class B Preferred, and warrants to acquire shares of Common
Stock which are directly owned by FVR, and those shares of Common Stock,
Class A Preferred, Class B Preferred, and warrants to acquire shares of
Common Stock which are directly held by FEP and CPII, except for his
pecuniary interest therein.
(8) Includes 3,585,060 shares of Class B Preferred and warrants to acquire
3,629,873 shares of Common Stock held by Alta Communications VI, L.P.
("ACVI"), and 81,607 shares of Class B Preferred and warrants to acquire
82,627 shares of Common Stock held by Alta Communications S by S, LLC
("ACS"). Mr. Benbow is a managing general partner of Alta Communications VI
Management Partners, L.P. ("ACMP"). ACMP is the sole general partner of
ACVI and in such capacity has authority to make decisions regarding the
voting and disposition of the Class B Preferred and warrants to acquire
Common Stock owned by ACVI. Mr. Benbow is a member of ACS. Mr. Benbow may
therefore be deemed to be the indirect beneficial owner of the warrants and
Class B Preferred reported by ACVI and ACS above. Mr. Benbow disclaims
beneficial ownership of all Class B Preferred and warrants to acquire
Common Stock held by ACS and ACVI, except for his pecuniary interest
therein.
(9) Includes 1,042,502 shares of Common Stock, 1,200,000 shares of Class A
Preferred, 386,205 shares of Class B Preferred, and warrants to acquire
1,771,032 shares of Common Stock held by Saugatuck Capital Company Limited
Partnership III ("Saugatuck"). Mr. Campbell is a general partner of
Greyrock Partners Limited Partnership ("Greyrock"). Greyrock is the sole
general partner of Saugatuck and may be deemed to share voting and
investment power with respect to said Common Stock, Class A Preferred,
Class B Preferred and warrants to acquire Common Stock. Mr. Campbell
disclaims beneficial ownership of all shares of Common Stock, Class A
Preferred, Class B Preferred, and warrants to acquire Common Stock held by
Saugatuck, except to the extent of his indirect proportionate interest in
Saugatuck.
(10) Includes 3,585,060 shares of Class B Preferred and warrants to acquire
3,629,873 shares of Common Stock held by ACVI, and 81,607 shares of Class B
Preferred and warrants to acquire 82,627 shares of Common Stock held by
ACS. Beneficial ownership of shares and warrants held by ACVI may be deemed
to be indirectly held or shared by Alta Communications, Inc., ACMP, Robert
F. Benbow, William P. Egan, Brian McNeill and/or Timothy Dibble, who may be
deemed to be affiliates of ACVI and ACS.
(11) Includes 174,502 shares of Common Stock, 3,133,333 shares of Class A
Preferred, 112,667 shares of Class B Preferred and warrants to acquire
3,717,408 shares of Common Stock owned by Centennial Fund IV, L.P. ("CIV"),
and 9,000 shares of Common Stock (which were granted pursuant to the
Company's 1995 Non-Employee Restricted Stock Award Plan) held by Jeffrey H.
Schutz, a former director of the Company, on behalf of CIV. Beneficial
ownership of shares and warrants held by CIV may be deemed to be indirectly
held or shared by Centennial Holdings IV, L.P., Steven C. Halstedt, Jeffrey
H. Schutz, Adam Goldman, Donald H. Parsons, Jr. and/or David C. Hull, Jr.,
who may be deemed to be affiliates of CIV.
(12) Beneficial ownership of shares and warrants held by Saugatuck may be deemed
to be indirectly held or shared by Greyrock, Frank J. Hawley, Jr., Owen S.
Crihfield, Richard P. Campbell and/or Barbara E. Parker, who may be deemed
to be affiliates of Saugatuck.
(13) Beneficial ownership of shares and warrants held by PNC Capital Corp.
("PNC") may be deemed to be indirectly held or shared by PNC Holding Corp.
and/or PNC Bank Corp., which may be deemed to be affiliates of PNC.
(14) Beneficial ownership of shares and warrants held by Primus Capital Fund III
Limited Partnership ("Primus") may be deemed to be indirectly held or
shared by Primus Venture Partners III Limited Partnership and/or Primus
Venture Partners, Inc., which may be deemed to be affiliates of Primus.
(15) Includes 271,049 shares of Common Stock, 1,002,000 shares of Class A
Preferred, 115,861 shares of Class B Preferred and warrants to acquire
1,269,610 shares of Common Stock held by FEP, 632,450 shares of Common
Stock, 2,338,000 shares of Class A Preferred, 270,344 shares of Class B
Preferred and warrants to acquire 2,962,422 shares of Common Stock held by
FVR, and 139,001 shares of Common Stock, 60,000 shares of Class A Preferred
and warrants to acquire 69,000 shares of Common
4
<PAGE> 8
Stock held by CPII. Beneficial ownership of shares and warrants held by
FVR, FEP and CPII may be deemed to be indirectly held or shared by Fleet
Growth Resources II, Inc., Silverado IV Corp., Fleet Growth Resources,
Inc., Fleet Private Equity Co., Fleet Financial Group, Inc., Silverado II,
L.P., Silverado II Corp., Robert Van Degna and/or Habib Y. Gorgi, who may
be deemed to be affiliates of FEP, FVR and CPII.
(16) Beneficial ownership of shares and warrants held by Webbmont Holdings L.P.
may be deemed to be indirectly held or shared by Woodcrest Associates,
Inc., its general partner.
(17) Includes 1,034,294 shares of Common Stock held by Mr. Stewart and 66,667
shares of Class B Preferred and warrants to acquire 67,500 shares of Common
Stock held by Spotted Dog Farm, L.P., a family limited partnership
controlled by Mr. Stewart.
(18) Includes shares of Common Stock, Class A Preferred, Class B Preferred and
warrants to acquire Common Stock that may be deemed to be beneficially
owned by one officer and certain directors of the Company who have
disclaimed beneficial ownership. See Notes 4, 7, 8, and 9.
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth certain information regarding the executive
officers of the Company.
<TABLE>
<CAPTION>
NAME TITLE AGE
---- ----- ---
<S> <C> <C>
Mark H. Dunaway Chairman of the Board of Directors, Chief Executive 55
Officer and Treasurer
Kathryn Loev Putnam Senior Vice President and Chief Financial Officer 36
Andrew M. Degges Senior Vice President of Engineering & Technology 41
Mark B. Jones Vice President of Legal Affairs and Secretary 43
</TABLE>
MARK H. DUNAWAY, a founder of the Company, has been Chairman of the Board
of Directors and Chief Executive Officer of the Company since 1991. From 1986 to
1994, he served as the Chairman and Chief Executive Officer of The Beeper
Company of America, Inc., a company he founded. The Beeper Company of America,
Inc. provided paging services to more than 60,000 subscribers before it was sold
in 1994 to Arch Communications Group, Inc. In 1987, Mr. Dunaway founded Dunaway
Enterprises, Inc., a consulting company which supplied management consulting
services to British Telecom's paging operations in the United Kingdom and other
companies, and he served as its Chief Executive Officer and Chairman from 1987
to 1994. Mr. Dunaway has served on a number of committees for Personal
Communications Industry Association ("PCIA").
KATHRYN LOEV PUTNAM has been Senior Vice President and Chief Financial
Officer of the Company since July 1997 and was Vice President of Corporate
Development of the Company from April 1996 to June 1997. From 1994 to March
1996, Ms. Putnam was employed by Legg Mason Wood Walker, Inc., an investment
banking and stock brokerage firm, where she served as Vice President in the
Corporate Finance Department. From 1991 to 1994, Ms. Putnam served as Assistant
Vice President in the Corporate Finance Department of Janney Montgomery Scott
Inc., an investment banking and stock brokerage firm.
ANDREW M. DEGGES has been employed by the Company since 1995 and is
currently the Senior Vice President of Engineering & Technology. Mr. Degges has
been in the wireless industry for over 19 years and has held various development
engineering positions. From 1983 to 1995, Mr. Degges was employed in various
positions with Dial Page, Inc., a national paging company. For the last four
years, Mr. Degges has been the lead software engineer for the Company's
networking product development.
MARK B. JONES has been the Vice President of Legal Affairs and Secretary of
the Company since October 1995. From 1989 to 1995, he was engaged in the private
practice of law with the law firm of Bodker, Ramsey & Andrews in Atlanta,
Georgia focusing on corporate and tax matters. From 1982 until 1989, Mr. Jones,
who is a certified public accountant, was employed as a Tax Manager with Arthur
Andersen LLP.
5
<PAGE> 9
ELECTION OF DIRECTORS
The Company's Board of Directors currently consists of six directors
divided into three classes, which have staggered terms. Two directors, Messrs.
Bang and Hurley, are in the class the term of which expires in 2000. In general,
directors are elected by the stockholders and hold office for a three-year term
or until their successors are duly elected and qualified.
The nominees of the Board of Directors for election at the Meeting are
William H. Bang and John J. Hurley, each of whom currently serves as a director
of the Company. If reelected at the Meeting, each of Messrs. Bang and Hurley
will serve a new term to end as of the 2003 Annual Meeting of Stockholders, or
until his earlier death, resignation or removal. Although it is anticipated that
each nominee will be able to serve as a director, should any nominee become
unavailable to serve, the shares represented by the proxies will be voted for
another person or persons designated by the Company's Board of Directors. In no
event will the proxies be voted for more than two nominees.
Pursuant to the Company's Articles of Incorporation, holders of the Class A
Preferred, voting as a separate class, are entitled to elect one director, and
holders of the Class B Preferred, voting as a separate class, are entitled to
elect one director. Holders of the Class A Preferred elected Mr. Campbell as a
director at the 1999 Annual Meeting of Stockholders. Holders of the Class B
Preferred elected Mr. Benbow as a director at the 1998 Annual Meeting of
Stockholders.
INFORMATION REGARDING NOMINEES AND CONTINUING DIRECTORS
Set forth below is certain information regarding each of the two nominees
and the directors of the Company who will continue to serve after the Meeting:
NOMINEES FOR THREE-YEAR TERMS:
<TABLE>
<CAPTION>
TERM
NAME TITLE ENDS AGE
- ---- ----- ---- ---
<S> <C> <C> <C>
William H. Bang............................................. Director 2000 70
John J. Hurley.............................................. Director 2000 65
</TABLE>
WILLIAM H. BANG has been a director of the Company since August 1995. In
April 1994, Mr. Bang retired from the position of Corporate Vice President at
Motorola, Inc., a leading manufacturer of equipment for the wireless industry.
Mr. Bang was employed by Motorola from 1964 to 1994 and held a variety of
positions with respect to the marketing of Motorola's radio and paging products.
Mr. Bang serves as a consultant to Motorola from time to time.
JOHN J. HURLEY has been a director of the Company since July 1996. Since
1998, Mr. Hurley has been Vice Chairman and a member of the Board of Directors
of Glenayre Technologies, Inc., a leading manufacturer of network equipment for
the wireless industry. From November 1998 to December 1994, he served as
President, Chief Operating Officer, and Chief Executive Officer of Glenayre
Technologies, Inc. Mr. Hurley received the Management Award for Innovation and
Excellence from the PCIA convention in 1995.
CONTINUING DIRECTORS:
<TABLE>
<CAPTION>
TERM
NAME TITLE ENDS AGE
- ---- ----- ---- ---
<S> <C> <C> <C>
Robert M. Van Degna......................................... Director 2001 55
Robert F. Benbow............................................ Director 2001 64
Mark H. Dunaway............................................. Director 2002 55
Richard P. Campbell......................................... Director 2002 56
</TABLE>
ROBERT M. VAN DEGNA has been a director of the Company since June 1995.
Since 1982, Mr. Van Degna has been a Managing Director and an executive officer
with various partnerships and corporations affiliated
6
<PAGE> 10
with Fleet Private Equity Co., an investment firm affiliated with Fleet
Financial Group, based in Providence, Rhode Island. Mr. Van Degna currently
serves as a director of several privately-held companies.
ROBERT F. BENBOW has been a director of the Company since March 1998. Since
1990, Mr. Benbow has served as a general partner of certain funds managed by
Burr, Egan, Deleage & Company. In addition, Mr. Benbow is a founder and Vice
President of Alta Communications and one of the managing general partners of
Alta Communications VI Management Partners, L.P., the sole general partner of
Alta Communications, VI, L.P. Mr. Benbow serves as a director of several
privately-held companies.
MARK H. DUNAWAY, a founder of the Company, has been Chairman of the Board
of Directors and Chief Executive Officer of the Company since 1991. From 1986 to
1994, he served as the Chairman and Chief Executive Officer of The Beeper
Company of America, Inc., a company he founded. The Beeper Company of America,
Inc. provided paging services to more than 60,000 subscribers before it was sold
in 1994 to Arch Communications Group, Inc. In 1987, Mr. Dunaway founded Dunaway
Enterprises, Inc., a consulting company which supplied management consulting
services to British Telecom's paging operations in the United Kingdom and other
companies, and he served as its Chief Executive Officer and Chairman from 1987
to 1994. Mr. Dunaway has served on a number of committees for Personal
Communications Industry Association ("PCIA").
RICHARD P. CAMPBELL has been a director of the Company since March 1998.
Mr. Campbell is a private investor. Previously, Mr. Campbell was a general
partner and Managing Director of Saratoga Partners, LLC and prior to that, a
general partner and Managing Director of Saugatuck Capital Company LLC. Mr.
Campbell serves as a director of several privately-held companies.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors met sixteen times in 1999, and each director
attended at least 75% of such meetings. During 1999, each director also attended
at least 75% of the meetings of each committee of the Board upon which such
director served.
The Board of Directors has standing compensation, audit, and capital
formation committees. The Board of Directors does not have a nominating
committee.
The Compensation Committee composed of Mr. Bang and Mr. Van Degna, met four
times in 1999. The Compensation Committee reviews and recommends executive
compensation policies, practices and amounts, and it administers the Company's
employee stock plans, including the granting of stock options pursuant to the
Company's stock option plans.
The Audit Committee, composed of Jeffrey H. Schutz and Mr. Hurley, met two
times in 1999. Mr. Schutz resigned as a director of the Company during January
2000. The Board of Directors appointed Mr. Campbell as a member of the Audit
Committee in February 2000. The Audit Committee consists solely of directors who
are not current or former employees of the Company or any subsidiary and are, in
the opinion of the Board of Directors, free from any relationship that would
interfere with the exercise of independent judgement in the discharge of the
Audit Committee's duties. The Audit Committee has general responsibility for
reviewing with management the financial controls, accounting, compliance with
law, audit and reporting activities of the Company and its subsidiaries as well
as reviewing the contingency plans for business continuity undertakings. The
Audit Committee also (i) recommends to the Company's Board of Directors the
approval of the financial statements as audited by the independent accountants,
(ii) approves any special assignments given to such accountants and the related
fees, (iii) reviews the planned scope of the annual audit, the related fees, the
independent accountants' report of audit, the accompanying management letter, if
any, and management's response thereto, (iv) consults with the independent
accountants with regard to the adequacy of the Company's internal accounting
controls and legal compliance matters, (v) reviews and oversees related-party
transactions, and (vi) reviews any major accounting changes made or contemplated
by the Company. In addition, the Audit Committee has exercised oversight
responsibility for Year 2000 planning throughout the Company.
7
<PAGE> 11
The Capital Formation Committee, composed of Messrs. Campbell, Schutz, and
Benbow, met one time during 1999. The Capital Formation Committee's functions
are to assist management with the strategic planning process including the
review of the Company's existing credit facilities, strategic business plans and
corporate objectives. The Board of Directors is considering the appointment of
an additional member to the Capital Formation Committee to fill the vacancy
created by the resignation of Mr. Schutz.
ELECTION OF DIRECTORS
The election of Messrs. Bang and Hurley will require the affirmative vote
of a plurality of the shares represented at the Meeting, in person or by proxy,
and entitled to vote thereon, assuming a quorum is present. THE BOARD OF
DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF THE TWO NOMINEES NAMED
ABOVE.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
Effective July 1995, the Board of Directors established the Compensation
Committee, now composed of Mr. Van Degna and Mr. Bang. Prior to that time, the
Board of Directors as a whole, including Mr. Dunaway, the Chief Executive
Officer, and Mr. Saner, the former President, participated in determining
executive officer compensation. In 1997 and 1998, entities that may be deemed to
be affiliated with Robert Van Degna, a director of the Company and member of the
Compensation Committee, purchased Class A Preferred, Class B Preferred and
warrants to purchase Common Stock from the Company.
8
<PAGE> 12
EXECUTIVE COMPENSATION
COMPENSATION SUMMARY
The following table shows annual compensation paid by the Company in each
of the past three fiscal years to Mark H. Dunaway, the Chief Executive Officer,
and to the four other most highly compensated executive officers of the Company
(collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
AWARDS
ANNUAL COMPENSATION ------------
------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND COMPENSATION OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)(1) (#)(2) ($)(3)
------------------ ---- ---------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Mark H. Dunaway................. 1999 242,016 22,284 4,800 -- 1,000
Chairman of the Board and 1998 242,016 30,252 61,428 110,550 1,000
Chief Executive Officer 1997 225,000 -- 4,800 -- 950
Michael J. Saner(4)............. 1999 107,457 -- 2,400 -- 1,000
President and Director 1998 191,613 24,125 53,569 110,550 1,000
1997 180,000 -- 4,800 -- 950
Kathryn Loev Putnam(5).......... 1999 160,000 20,000 4,800 -- 520
Senior Vice President and 1998 150,617 14,375 4,800 130,000 1,000
Chief Financial Officer 1997 95,004 40,000 4,800 60,000 950
Andrew M. Degges................ 1999 140,000 85,000 4,800 -- 1,000
Senior Vice President of 1998 111,538 4,374 1,240 15,000 114
Technology 1997 80,000 14,000 0 35,000 80
Mark B. Jones................... 1999 140,000 10,000 4,800 -- 1,000
Vice President of Legal
Affairs 1998 139,367 15,000 4,800 80,000 1,000
1997 103,603 14,000 4,800 9,575 950
</TABLE>
- ---------------
(1) Reflects car allowances paid to these employees. For Mr. Dunaway and Mr.
Saner, this includes deferred compensation earned in 1997 but paid in 1998
in the amount of $54,479 and $48,769, respectively.
(2) Reflects options granted pursuant to the Company's 1995 Stock Option Plan.
(3) Reflects the Company's matching contributions to the 401(k) plan: Mr.
Dunaway, Mr. Saner, Ms. Putnam, Mr. Degges, and Mr. Jones are 100% vested.
(4) Mr. Saner resigned his positions as an employee, officer, and director of
the Company as of December 31, 1998. The Company continued to compensate Mr.
Saner through June 30, 1999, in connection with a severance arrangement.
(5) Prior to her assuming the position of Senior Vice President and Chief
Financial Officer in July 1997, Ms. Putnam was Vice President of Corporate
Development.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The Company did not grant stock options or SARs to the Named Executive
Officers or any employees during the fiscal year ending December 31, 1999.
9
<PAGE> 13
EXERCISES OF OPTIONS IN 1999 AND AGGREGATE YEAR-END OPTION VALUES
The following table sets forth information with respect to the December 31,
1999 value of all options held by the Named Executive Officers at that date. No
Named Executive Officer exercised any options in 1999.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY -- END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FISCAL AT FISCAL
SHARES YEAR-END (#) YEAR-END ($)(1)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ---- ------------ ------------ -------------- ---------------
<S> <C> <C> <C> <C>
Mark H. Dunaway.......................... N/A N/A 130,949/90,151 0/0
Michael J. Saner......................... N/A N/A 0/221,100 0/0
Kathryn Loev Putnam...................... N/A N/A 83,333/106,667 0/0
Andrew M. Degges......................... N/A N/A 28,333/21,667 0/0
Mark B. Jones............................ N/A N/A 73,474/56,526 0/0
</TABLE>
- ---------------
(1) Assumes the difference between fair market value and the exercise price.
EMPLOYMENT AGREEMENTS
The Company currently has an employment agreement with Mr. Dunaway, which
provides for his employment as Chief Executive Officer of the Company for a
period of three years, ending in June 1998, and on a month-to-month basis
thereafter. Mr. Dunaway's employment agreement provided initially for an annual
base salary of $18,750 per month but this was increased in 1997, and remained at
this level during 1999, to $20,168 per month. Of this amount, $6,050.40 per
month was accrued for the months of April through December 1997, and paid in
1998. The employment agreement prohibits Mr. Dunaway from competing against the
Company during its term and for a period of one year thereafter in certain
specified geographical areas. In addition, Mr. Dunaway is prohibited from
providing paging services to customers of the Company for a six-month period
after the termination of his employment. The employment agreement may be
terminated by mutual agreement, voluntarily by Mr. Dunaway upon 365 days' prior
written notice, for cause or upon the death or disability of Mr. Dunaway.
Depending upon the manner in which the employment agreement is terminated, Mr.
Dunaway or his heirs are entitled to different levels of compensation upon
termination, subject to a maximum amount equal to 18 months compensation.
DIRECTOR COMPENSATION
The Company pays Mr. Bang and Mr. Hurley a director's fee of $500 for each
Board meeting and $250 for each committee meeting attended. Otherwise, the
Company pays no cash remuneration to its directors except reimbursement for
reasonable expenses.
In 1995 the Company implemented, effective March 1, 1996, the 1995
Non-Employee Directors Restricted Stock Award Plan (the "Restricted Stock
Plan"), pursuant to which non-employee directors are granted restricted stock
awards. Under the Restricted Stock Plan, every five years each non-employee
director will receive a restricted stock award covering 15,000 shares of Common
Stock, twenty percent of which vests each year the non-employee director serves
on the Board of Directors. Awards are pro-rated for non-employee directors
selected between annual meetings of the stockholders. A total of 240,000 shares
of Common Stock have been reserved for issuance under the Restricted Stock Plan
and 99,000 shares have been granted as of April 28, 2000.
10
<PAGE> 14
PERFORMANCE GRAPH
The Company completed its initial public offering on March 1, 1996, and its
Common Stock began trading on Nasdaq at a price of $10.00. The Nasdaq Stock
Market, Inc. delisted the Company's Common Stock from its National Market as of
the close of business on March 22, 1999 because the Company failed to comply
with Nasdaq's quantitative maintenance criteria regarding minimum net tangible
assets, market value of public float and minimum bid price. The Company's Common
Stock became listed on the OTC Bulletin Board effective March 23, 1999.
The following graph shows the value at the end of the indicated period of a
$100 investment in the Company, compared with similar investments based on (1)
the value of The Nasdaq Stock Market Index and (2) the value of an index
comprised of the common stock of the five other companies that offer exclusively
paging services (the "Custom Peer Group"), in each case on a total return basis
assuming reinvestment of dividends.
<TABLE>
<CAPTION>
THE NASDAQ STOCK MARKET
THE COMPANY (1) INDEX CUSTOM PEER GROUP (2)
--------------- ----------------------- ---------------------
<S> <C> <C> <C>
3/96 100 100 100
12/96 65 120 40
12/97 13 146 34
12/98 3 206 20
12/99 3 373 17
</TABLE>
- ---------------
(1) Based upon an initial investment of $100 on March 1, 1996.
(2) The Custom Peer Group includes Arch Communications Group, Inc., Metrocall,
Inc., Weblink Wireless, Inc. (formerly Pagemart Wireless, Inc.), Paging
Network, Inc., and Teletouch Communications, Inc.
COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS
Compensation and benefit practices of the Company are established and
governed by the Compensation Committee which is made up entirely of independent
members of the Board of Directors. The Compensation Committee establishes the
general compensation policy of the Company, establishes the compensation of the
Chief Executive Officer of the Company, approves the compensation of other
executive officers of the Company and administers the Company's stock option
plans and other employee stock plans.
Compensation Philosophy. The Compensation Committee has determined that
the Company's compensation program should be directed to rewarding performance
which creates value for stockholders. The Compensation Committee's policies
focus on attracting, motivating and assisting in the retention of key
11
<PAGE> 15
employees who demonstrate high levels of ability and talent. The compensation
program looks both to the short and long term, balancing compensation to reward
executive officers for past performance of the Company with incentives for
contributions to a superior future performance of the Company over the long
term. The Compensation Committee utilizes base salary, cash bonuses and stock
options as part of its program.
Base Salary Program. Base salaries were initially determined primarily by
evaluating the responsibilities of the position held by, and the experience of,
each executive officer in addition to competitive comparisons with like
industries and companies in the geographic area. For 2000, executive officers'
salaries will increase based on the parameters set forth above.
Bonus Compensation Program. Executive officers are eligible to receive
annual cash bonuses based upon criteria established annually by the Compensation
Committee based upon the operating performance of the Company. For 2000, each
eligible executive officer is entitled to a bonus as determined at the
discretion of the Compensation Committee based upon achievement of the Company's
financial and strategic objectives.
Stock Incentive Program. Awards of stock options under the Company's stock
option plans are intended to reward contributions by executive officers,
managers and key employees to the Company's performance and to align the
long-term interests of such persons with those of the stockholders. The
Compensation Committee also considers options to be an important method of
providing an incentive for executive officers to remain with, and to continue to
make significant contributions to, the Company. In awarding options, the
Compensation Committee considers the number and value of options held by each
executive officer which will vest in future periods and seeks to maintain
equitable relationships among executive officers who have similar levels of
responsibility.
CEO Compensation. Mr. Dunaway, the Company's Chief Executive Officer, was
entitled to a base salary of $242,016 in 1999 pursuant to the terms of an
employment agreement. The Committee concluded that the 1999 base salary and paid
incentive compensation of Mr. Dunaway were reasonable in amount and consistent
with industry practices. Mr. Dunaway is also a participant in the Company's 2000
bonus program for executive officers, as set forth above. The Compensation
Committee will consider long-term incentive compensation awards to Mr. Dunaway
based upon achievement of the Company's operational and financial objectives.
Compliance with Code Section 162(m). Section 162(m) of the Code generally
disallows a tax deduction to public companies for compensation over $1 million
paid to the corporation's chief executive officer and four other most highly
compensated executive officers. Qualified performance-based compensation under
Section 162(m) of the Code and the applicable regulations is not subject to the
deduction limit if certain requirements are met. The Compensation Committee
believes that options granted under the Company's 1995 Stock Option Plan have
been exempt from the limitations as performance-based compensation as a result
of certain transition rules adopted when Section 162(m) was instituted and
because of the approval of the 1995 Stock Option Plan by the stockholders in
1997. The Company intends to take all actions necessary so that these stock
options continue to qualify as performance-based compensation and are therefore
exempt from the Section 162(m) limit. The Company believes that other
compensation expected to be paid in 1999 will not exceed the Section 162(m)
limitations.
William H. Bang
Robert M. Van Degna
The above report will not be deemed to be incorporated into any filing by
the Company under the Securities Act of 1933, as amended or the Exchange Act,
except to the extent that the Company specifically incorporates the same by
reference.
12
<PAGE> 16
OTHER MATTERS
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than ten percent of a registered class
of the Company's equity securities, to file reports (Forms 3, 4 and 5) of stock
ownership and changes in ownership with the SEC. Executive officers, directors
and beneficial owners of more than ten percent of the Company's stock are
required to furnish the Company with copies of all forms that they file.
Based solely on the Company's review of copies of Forms 3, 4 and 5 and the
amendments thereto received by the Company, or written representations from
reporting persons that no Forms 5 were required to be filed by those persons,
the Company believes that during the year ended December 31, 1999, all filing
requirements were complied with by its executive officers, directors and
beneficial owners of more than ten percent of the Company's stock.
RELATIONSHIP WITH INDEPENDENT PUBLIC AUDITORS
On October 25, 1999, Ernst & Young LLP ("E&Y") resigned as the Company's
independent accountant by delivering a letter to the Company informing the
Company of the cessation of the client-auditor relationship between the Company
and E&Y.
The reports of E&Y on the Company's consolidated financial statements for
the past two years, the most recent of which is the fiscal year ended December
31, 1998, contained no adverse opinion or disclaimer of opinion and were not
qualified or modified as to audit scope or accounting principles. However, their
report for the fiscal year ending December 31, 1998 includes an explanatory
paragraph that describes the uncertainty over the Company's ability to continue
as a going concern as described in Note 2 to the consolidated financial
statements.
In connection with the audits of the Company's consolidated financial
statements for each of the two most recent fiscal years, and in the subsequent
interim period, there have been no disagreements with E&Y on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which disagreements if not resolved to the satisfaction of
E&Y would have caused them to make reference thereto in their report on the
Company's consolidated financial statements.
The Company engaged Grant Thornton LLP as its new independent accountant as
of January 21, 2000. During the Company's two most recent fiscal years and
through January 21, 2000, neither the Company nor someone on its behalf has
consulted with Grant Thornton LLP on items which (1) involved the application of
accounting principles to a specified transaction, either completed or proposed,
or involved the type of audit opinion that might be rendered on the Company's
financial statements, or (2) concerned the subject matter of a disagreement or
reportable event with the Company's former independent accountant.
Representatives of Grant Thornton LLP are expected to be present at the Meeting
and will have an opportunity to make a statement if they desire to do so and
will be able to respond to appropriate questions.
STOCKHOLDERS' PROPOSALS
Proposals of stockholders intended to be presented at the Company's Annual
Meeting of Stockholders to be held in 2001 must be received at the Company no
later than November 30, 2000 to be included in the proxy statement for such
meeting. Proposals must comply with the requirements as to form and substance
established by the SEC for proposals in order to be included in the proxy
statement.
13
<PAGE> 17
OTHER BUSINESS
As of the date of this Proxy Statement, the Company knows of no other
business that will come before the Meeting for action. If any other matter is
properly presented for consideration and action at the Meeting, however, the
proxies will be voted with respect to those matters in accordance with the best
judgment and in the discretion of the proxy holders.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Mark B. Jones
Mark B. Jones
Secretary
May 8, 2000
14
<PAGE> 18
PREFERRED NETWORKS, INC.
850 CENTER WAY
NORCROSS, GEORGIA 30071
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF PREFERRED NETWORKS, INC.
FOR THE ANNUAL MEETING OF STOCKHOLDERS
JUNE 8, 2000
The undersigned stockholder of Preferred Networks, Inc. hereby appoints Mark H.
Dunaway and Mark B. Jones with full power of substitution, acting jointly or by
either one of them, attorney and proxies to represent and vote in the manner
specified below the shares of stock which the undersigned could vote if
personally present at the Annual Meeting of Stockholders to be held on June 8,
2000, or at any adjournment thereof.
I. Election of Two Directors by the holders of the Common Stock, Class A
Redeemable Preferred Stock, and Class B Senior Redeemable Preferred Stock.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
THROUGH THE NOMINEE NAME.)
<TABLE>
<S> <C>
[ ] FOR the nominees listed below [ ] WITHHOLD AUTHORITY to vote for all nominees listed
below
</TABLE>
William H. Bang
John J. Hurley
(Continued and to be signed on other side)
<PAGE> 19
(Continued from other side)
II. In their discretion upon such other business as may properly come
before the meeting
IF NO DIRECTION TO THE CONTRARY IS INDICATED, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF EACH OF THE TWO NOMINEES FOR DIRECTOR NAMED ABOVE.
Dated: , 2000
--------------------
--------------------------------
Signature(s) of Stockholder
--------------------------------
Signature if signing jointly
Please sign exactly as name
appears hereon. If shares are
held jointly, each stockholder
should sign. When signing for a
corporation or partnership or
other entity or as attorney,
executor, administrator,
trustee, guardian or custodian,
please indicate the capacity in
which you are signing.
PLEASE FILL IN, DATE AND SIGN THE PROXY AND RETURN IT IN THE ENCLOSED POSTPAID
ENVELOPE.
