<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 10-K/A NO. 1
<TABLE>
<C> <S>
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
</TABLE>
COMMISSION FILE 0-16029
--------------------------
PRONET INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 75-1832168
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
6340 LBJ FREEWAY
DALLAS, TEXAS 75240
(Address of principal executive (Zip Code)
offices)
</TABLE>
Registrant's telephone number, including area code: 214-687-2000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $.01 Par Value
(Title of Class)
--------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of February 26, 1996 was approximately $171,712,905. As of
February 26, 1996, there were 6,988,436 outstanding shares of the registrant's
Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Registration Statement on Form S-1 (File No.
33-14956) filed with the Commission on July 10, 1987, July 15, 1987 and July 29,
1987 are incorporated by reference into Part IV of this Form 10-K.
Portions of the registrant's Current Reports on Form 8-K dated September 8,
1987, July 21, 1988, March 1, 1994, April 19, 1995, July 5, 1995, July 7, 1995
and January 16, 1996 are incorporated by reference into Part IV of this Form
10-K.
Portions of the registrant's Annual Report on Form 10-K for each of the
years ended December 31, 1991 and 1994 are incorporated by reference into Part
IV of this Form 10-K.
Portions of the registrant's Quarterly Report on Form 10-Q for the each of
the fiscal quarters ended June 30, 1994 and March 31, 1995 are incorporated by
reference into Part IV of this Form 10-K.
Portions of the registrant's Registration Statement on Form S-2 (File No.
33-85696) filed with the Commission on October 28, 1994 are incorporated by
reference into Part IV of this Form 10-K.
Portions of the registrant's Proxy Statement filed with the Commission on
April 26, 1994 and April 24, 1995 are incorporated by reference into Part IV of
this Form 10-K.
Portions of the registrant's Registration Statement on Form S-4 (File No.
33-60925) filed with the Commission on July 7, 1995 are incorporated herein by
reference into Part IV of this Form 10-K.
Portions of the registrant's Registration Statement on Form 8-A dated April
7, 1995 are incorporated by reference into Part IV of this Form 10-K.
- --------------------------------------------------------------------------------
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<PAGE>
The following Items 10, 11, 12 and 13 of Part III from the ProNet Inc. (the
"Company") 1995 Form 10-K filed with the Securities and Exchange Commission
(the "SEC") on March 1, 1996, are hereby amended and restated in its entirety
as follows.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The current directors and executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------- --- ---------------------------------------------------------------
<S> <C> <C>
Jackie R. Kimzey 43 Chief Executive Officer and Chairman of the Board of Directors
David J. Vucina 42 President, Chief Operating Officer and Director
Thomas V. Bruns 63 Director
Harvey B. Cash 57 Director
Edward E. Jungerman 53 Director
Mark C. Masur 42 Director
Bo Bernard 50 Executive Vice President
Jan E. Gaulding 41 Senior Vice President, Treasurer and Chief Financial Officer
Jeffery A. Owens 42 Senior Vice President and Chief Technology Officer
Mark A. Solls 39 Vice President, Secretary and General Counsel
</TABLE>
Jackie R. Kimzey is a founder of the Company and has been a director of the
Company since 1983. Mr. Kimzey has been Chairman of the Board of the Company
since March 1990 and Chief Executive Officer of the Company since May 1983. Mr.
Kimzey served as President of the Company from May 1983 until May 1991.
David J. Vucina joined the Company in August 1988 and has been a director of
the Company since 1994. Mr. Vucina served as Executive Vice President of the
Company and President and Chief Operating Officer of ProNet Medical
Communications, the Company's medical communications division until May 1991, at
which time he was elected President and Chief Operating Officer of the Company.
Thomas V. Bruns has been a director of the Company since May 1991. Mr. Bruns
has been Chairman of the Board of Zaun Equipment Company, a power equipment
distributor, since 1986.
Harvey B. Cash has been a director of the Company since 1982. Mr. Cash was
Chairman of the Board of the Company from 1982 until March 1990. Mr. Cash is
currently general partner of Berry Cash Southwest Partnership, a venture capital
fund. Mr. Cash is Chairman of the Board of Cyrix Corporation, a publicly held
microprocessor company, and currently also serves on the Boards of Directors
of the following public companies: i2 Technologies, Inc., a provider of supply
chain management software; Aurora Electronics, Inc., a distributor of recycled
integrated circuit boards and computer components; Benchmarq Microelectronics,
Inc., a developer of chips and chipsets for portable electronic devices; AMX
Corporation, a manufacturer of remote control systems; and Heritage Media
Corporation, an owner and operator of radio and television stations.
Edward E. Jungerman has been a director of the Company since May 1992. Mr.
Jungerman has been President of Impulse Telecommunications Corporation, a
strategic telecommunications consulting firm, since 1986. He has over 25 years
experience in the telecommunications field, including senior executive positions
at Northern Telecom, Inc. and private, start-up ventures in the specialized
advanced telecommunications services field.
Mark C. Masur has been a director of the Company since 1984. Mr. Masur
co-founded and since September 1988 has been a general partner of O'Donnell &
Masur, a venture capital partnership. Mr. Masur served in various management
capacities for InterFirst Venture Corporation in Dallas, Texas and its successor
entities from 1982 until September 1988.
<PAGE>
Bo Bernard is a founder of the Company. He served as Senior Vice President
of the Company from May 1983 until July 1991. In July 1991, he was elected
Executive Vice President of the Company. Mr. Bernard is responsible for
expansion programs for the Company.
Jan E. Gaulding joined the Company in March 1984 and served as Vice
President -- Finance, Treasurer and Chief Financial Officer until January 1994
at which time she was elected Senior Vice President, Treasurer and Chief
Financial Officer of the Company. Ms. Gaulding served as Secretary of the
Company from February 1986 until December 1994. As Chief Financial Officer, Ms.
Gaulding has primary responsibility for the Company's financial, treasury,
accounting, human resources and information systems functions.
Jeffery A. Owens joined the Company in May 1984 and served as Vice President
- -- Engineering until January 1996 at which time he was elected Senior Vice
President and Chief Technology Officer of the Company. Prior to joining the
Company, Mr. Owens was a communications system engineer and engineering manager
for Motorola Communications and Electronics, Inc. Mr. Owens is responsible for
overseeing the Company's strategic technology and engineering functions.
Mark A. Solls joined the Company in December 1994 as Vice President,
Secretary and General Counsel. From February 1993 until joining the Company, Mr.
Solls engaged in the private practice of law. From November 1990 until February
1993, Mr. Solls served as Senior Vice President, Secretary and General Counsel
of Maxum Health Corp., a provider of medical diagnostic services. From 1988 to
1990, he served as Associate General Counsel for Republic Health Corporation
(since renamed OrNda Health Corp.), a hospital management company.
Officers are appointed by the Board of Directors and serve until their
respective successors are appointed and qualified by the Board of Directors.
ITEM 11. EXECUTIVE COMPENSATION
DIRECTORS' COMPENSATION
The Company currently has a policy whereby each non-employee director
receives a $4,000 annual retainer and $1,000 for each Board meeting attended.
All directors of the Company are reimbursed for traveling costs and other
out-of-pocket expenses incurred in attending meetings of the Board of Directors.
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
On May 22, 1991, the Company granted to Mr. Bruns, as a newly elected
non-employee director, an option to purchase 7,500 shares of Common Stock,
$.01 par value per share ("Common Stock") at an exercise price equal to the
closing price of the Common Stock as quoted on the NASDAQ National Market System
on May 22, 1991. On July 2, 1991, the Company adopted a Non-Employee Director
Stock Option Plan which provides for a one-time grant of an option to purchase
7,500 shares of Common Stock of the Company to each non-employee director of the
Company who at the time of adoption previously had not received a stock option
grant (Messrs. Cash and Masur), and to any subsequent outside director who is
elected and begins serving on the Company's Board of Directors on or before
July 1, 2001 (Mr. Jungerman). Options granted under this plan may be exercised
after the director has completed six months of service as a member of the Board
after the date on which the director was granted the option. The exercise price
of each option granted under this plan on the effective date of the plan
(July 2, 1991) was the closing price of the Company's Common Stock as quoted
on the NASDAQ National Market System on such effective date, and the exercise
price of subsequently granted options is the closing price of the Company's
Common Stock as quoted on the NASDAQ National Market System as of the date
the grantee is elected to the Company's Board of Directors.
1995 LONG-TERM INCENTIVE PLAN
On May 25, 1995, the Company granted a nonstatutory option to purchase
2,500 shares of Common Stock to its four non-employee directors in accordance
with the terms of the 1995 Long-Term Incentive Plan (the "1995 Plan"). The
1995 Plan provides for an automatic grant of a nonstatutory option to purchase
2,500 shares of Common Stock to each non-employee director who is a director
of the Company as of both the day immediately preceding the annual meeting of
the Company's stockholders and the day immediately following the annual
meeting, effective on the date of the first meeting of the Board of Directors
following the annual meeting. The exercise price for each share of stock
subject to the option shall be the fair market value of a share of stock on
the date of grant of such option. The option shall become vested and
exercisable with respect to 833 shares of stock on each of the first two
anniversaries of the date of grant, and with respect to 834 shares of stock
on the third anniversary of the date of grant, so long as the non-employee
director remains a director of the Company after the date of grant through
those dates. The option shall terminate on the earliest of (i) the date ten
years from the date of grant, (ii) immediately when the holder ceases to be a
director, if the Board demands or requests the holder's resignation from the
Board, (iii) on the date 90 days after the Holder ceases to be a director for
any reason other than the reasons specified in the preceding clause (ii) or
the following clause (iv), or (iv) on the date one year after the holder
ceases to be a director because of death or permanent disability.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding the
compensation of the Company's Chief Executive Officer and the Company's four
most highly compensated executive officers other than the Chief Executive
Officer (the "Named Executives"), as well as the total compensation earned by
each such individual for the last three fiscal years:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION> LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- AWARDS -- ALL OTHER
SALARY BONUS OPTIONS (1) COMPENSATION (2)
------ ----- ------------- ----------------
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($)
- ------------------------------------------------ --------- --------- --------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Jackie R. Kimzey................................ 1995 $208,000 $97,955 -- $16,716
Chief Executive Officer 1994 191,435 92,736 70,000 15,708
1993 178,440 86,722 50,000 12,686
David J. Vucina................................. 1995 168,000 101,722 -- 12,737
President 1994 149,511 108,675 70,000 8,290
1993 138,276 106,520 50,000 6,143
Bo Bernard...................................... 1995 114,125 51,803 -- 5,222
Executive Vice President 1994 114,708 55,545 30,000 4,847
1993 108,000 40,594 15,000 3,937
Jan E. Gaulding................................. 1995 105,000 35,320 -- 4,126
Senior Vice President 1994 94,704 30,590 50,000 3,607
1993 87,900 23,484 10,000 3,248
Mark A. Solls................................... 1995 125,004 33,250 20,000 6,055
Vice President and General Counsel 1994 -- -- -- --
1993 -- -- -- --
</TABLE>
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(1) Options to acquire shares of Common Stock.
(2) Amount represents premiums paid by the Company for compensatory split-dollar
life and disability insurance including the portion attributable to term
life insurance (less than $1,000 for each Named Executive) that is taxable
compensation to the Named Executive.
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table summarizes options to acquire shares of Common Stock
granted to the Named Executives during 1995.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
--------------------------------------------------------- ANNUAL RATES OF
NUMBER OF STOCK PRICE
SECURITIES % OF TOTAL APPRECIATION FOR
UNDERLYING OPTIONS GRANTED EXERCISE OPTION TERM (2)
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION --------------------
NAME GRANTED (#)(1) FISCAL YEAR ($/SHARE) DATE 5% 10%
- ------------------------------------ --------------- --------------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Jackie R. Kimzey.................... -- -- -- -- -- --
David J. Vucina..................... -- -- -- -- -- --
Bo Bernard.......................... -- -- -- -- -- --
Jan E. Gaulding..................... -- -- -- -- -- --
Mark A. Solls....................... 20,000 43% $ 14.25 1/3/2005 $179,200 $454,200
</TABLE>
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(1) All options were granted pursuant to the 1987 Incentive Stock Option Plan.
The exercise price represents the fair market value of the stock on the date
of grant. The options have a term of ten years and vest in 25% cumulative
annual increments over that period beginning with the first anniversary date
of the grant.
(2) The potential realizable value portion of the table illustrates the values
that might be realized upon exercise of the options immediately prior to the
expiration of their term, assuming the specified compounded rates of
appreciation to the Company's Common Stock over the term of the options. The
price of Common Stock at the end of the ten year term of the options would
be $23.21 assuming 5% annual appreciation and would be $36.96 assuming
10% annual appreciation. These amounts represent assumed rates of
appreciation only. Actual gains, if any, on stock option exercises depend
on the future performance of the Common Stock and overall market
conditions. There can be no assurances that the potential values set forth
in this table reflect the actual values that may be obtained by any of the
Named Executives.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
The following table summarizes options exercised during 1995 and presents
the value of unexercised options held by the Named Executives at fiscal
year-end:
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR-END (#) AT FISCAL YEAR-END (1)
SHARES ACQUIRED VALUE -------------------------- ----------------------------
NAME ON EXERCISE (#) REALIZED (2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ --------------- ------------- ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jackie R. Kimzey........ 96,168 $ 2,326,491 42,000 88,000 $ 884,000 $ 1,692,250
David J. Vucina......... 91,732 1,540,704 42,500 90,000 881,813 1,736,000
Bo Bernard.............. -- -- 58,000 34,500 1,327,250 660,563
Jan E. Gaulding......... 4,675 122,719 56,325 46,500 1,244,944 823,438
Mark A. Solls........... -- -- -- 20,000 -- 305,000
</TABLE>
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<PAGE>
(1) The last sales price of Common Stock as reported on the NASDAQ National
Market System on December 29, 1995, the last trading day of 1995, was
$29.50. Value is calculated on the basis of the remainder of $29.50 minus
the exercise price multiplied by the number of shares of Common Stock
underlying the option.
(2) Value is calculated based on the remainder of the closing market price of
Common Stock on the date of the exercise minus the exercise price multiplied
by the number of shares to which the exercise relates.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1995, the Compensation Committee was composed of Messrs. Bruns, Cash,
Jungerman and Masur. No member of the Compensation Committee is an officer of
the Company. Since March 1992, upon management's request, Impulse
Telecommunications Corporation ("Impulse") has provided consulting services in
the area of personal communications technologies and services to the Company.
Mr. Jungerman is the President and owns a controlling interest in Impulse.
During the last fiscal year, the Company paid Impulse approximately $28,300 for
these consulting services.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 31,
1996, regarding the amount and nature of the beneficial ownership of the
Company's Common Stock by (i) each person known to the Company to be the
beneficial owner of more than five percent of the outstanding shares of
Common Stock, (ii) each of its directors, (iii) each executive officer of
the Company named in the Summary Compensation Table herein and (iv) all
of the Company's directors and executive officers as a group. Except
as otherwise noted, the persons named in the table have sole voting and
investment power in the shares of Common Stock shown as beneficially owned
by such persons.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP AS OF MARCH 31,
1996
------------------------------------
NUMBER OF PERCENT OF
SHARES OF OUTSTANDING
NAME OF BENEFICIAL OWNER COMMON STOCK COMMON STOCK
- ------------------------------------------------------------------------ -------------- ---------------
<S> <C> <C>
PRINCIPAL STOCKHOLDERS:
J.& W. Seligman & Co. Inc. (1)........................................ 429,674 6.08%
Oppenheimer Funds, Inc. (2)........................................... 358,000 5.06
DIRECTORS AND OFFICERS:
Bo Bernard (3)........................................................ 120,113 1.68
Thomas V. Bruns (4)................................................... 8,333 *
Harvey B. Cash (5).................................................... 28,333 *
Jan E. Gaulding (6)................................................... 74,850 1.05
Edward E. Jungerman (4)............................................... 8,333 *
Jackie R. Kimzey (7).................................................. 150,189 2.11
Mark C. Masur (8)..................................................... 76,833 1.09
Mark A. Solls (9)..................................................... 5,182 *
David J. Vucina (10).................................................. 47,469 *
All directors and executive officers as a group (10 persons) (11)..... 592,384 7.96
</TABLE>
- ------------------------
* REPRESENTS LESS THAN 1% OF THE SHARES OUTSTANDING.
<PAGE>
(1) J.& W. Seligman & Co. Inc. has beneficial ownership with sole voting power
with respect to 302,580 shares and sole dispositive power with respect to
all 429,674 shares. The business address of J.& W. Seligman & Co. Inc. is
100 Park Avenue, New York, New York 10017.
(2) The business address of Oppenheimer Funds, Inc. is Two World Trade
Center, Suite 3400, New York, New York, 10048.
(3) Includes 61,000 shares subject to currently exercisable options or options
exercisable within 60 days after March 31, 1996 and 714 shares beneficially
owned by Mr. Bernard's child.
(4) Represents shares subject to currently exercisable options or options
exercisable within 60 days after March 31, 1996.
(5) Includes 8,333 shares subject to currently exercisable options or options
exercisable within 60 days after March 31, 1996.
(6) Includes 59,325 shares subject to currently exercisable options or options
exercisable within 60 days after March 31, 1996.
(7) Includes 46,000 shares subject to currently exercisable options or options
exercisable within 60 days after March 31, 1996, and 61,000 shares
beneficially owned by Mr. Kimzey's children.
(8) Includes 8,333 shares subject to currently exercisable options or options
exercisable within 60 days after March 31, 1996 and 60,000 shares
beneficially owned by Silver Creek Fund of which Mr. Masur is the
sole general partner. Mr. Masur has sole voting and investment power in the
shares beneficially owned by such partnership.
(9) Includes 5,000 shares subject to currently exercisable options or options
exercisable within 60 days after March 31, 1996.
(10) Includes 46,500 shares subject to currently exercisable options or options
exercisable within 60 days after March 31, 1996.
(11) Includes 313,157 shares subject to currently exercisable options or options
exercisable within 60 days after March 31, 1996.
Section 16(a) of the Securities and Exchange Act of 1934, as amended
(the "Exchange Act"), requires the Company's officers and directors, and
beneficial owners of more than ten percent of the Company's Common Stock, to
file with the SEC and the National Association of Securities Dealers,
Inc. reports of ownership and changes in ownership of the Company's Common
Stock. Copies of such reports are required to be furnished to the Company.
Based solely on its review of the copies of such reports furnished to
the Company, or written representations that no reports were required,
the Company believes that two Form 4's with respect to acquisitions of Common
Stock under the Company's Employee Stock Purchase Plan were not reported on a
timely basis for the following officers of the Company: Jackie Kimzey, David
Vucina, Jan Gaulding, and Mark Solls and one Form 4 with respect to the
exercise of stock options was not reported on a timely basis for Jan Gaulding.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED ACTIONS
Since March 1992, upon management's request, Impulse has provided consulting
services in the area of personal communications services to the Company. Mr.
Jungerman is the President of, and owns a controlling interest in, Impulse.
During the last fiscal year, the Company paid Impulse $28,300 for these
consulting services, an amount which management believes is fair and reasonable
and as favorable to the Company as could have been obtained from a wholly
unrelated party.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
PRONET INC.
(Registrant)
Date: April 29, 1996 /s/ JAN E. GAULDING
--------------------------------------
Jan E. Gaulding
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
