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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 2, 1997
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PRONET INC.
(Exact name of issuer as specified in its charter)
DELAWARE 0-16029 75-1832168
(State or other (Commission File Number) (I.R.S. Employer
Jurisdiction of Identification Number)
incorporation)
6340 LBJ FREEWAY 75240
DALLAS, TEXAS (Zip Code)
(Address of Principal
Executive Offices)
Registrant's telephone number, including area code: (972) 687-2000
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ITEM 5. OTHER EVENTS
On May 15, 1997 and July 2, 1997, ProNet Inc. (the "Company") issued the
attached press releases. Under the terms of the described settlement, the
Company would pay the Plaintiffs a total of $1.9 million in cash, the
Company's first two levels of insurance would pay the Plaintiffs a total of
$3.5 million in cash and the underwriter defendants would pay the Plaintiffs
a total of $1.85 million in cash.
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SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
PRONET INC.
(Registrant)
By: /s/ JAN E. GAULDING
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Jan E. Gaulding
Senior Vice President and
Chief Financial Officer
(principal financial and
accounting officer)
Date: July 2, 1997
<PAGE>
[Letterhead]
FOR IMMEDIATE RELEASE
For More Information Contact:
Kelly H. Love, Director of Investor
Relations (972) 687-2000
PRONET ANNOUNCES SETTLEMENT OF SECURITIES LITIGATION
DALLAS, MAY 15, 1997-PRONET INC. (NASDAQ-PNET) announced today that it has
entered into an agreement in principle to settle the securities class actions
pending against the Company in state and federal courts. As previously
announced, the Company and certain of its officers and directors are
defendants in class actions that were filed after the price of the Company's
stock declined in June 1996.
The Company and its insurance carriers will pay $5 million to settle all
claims against the Company and its officers and directors. The Company will
also assign to the plaintiffs certain rights against one of its insurers and
will issue one million shares of ProNet stock to the class. The Company will
also pay $2 million to the class if, within two years from final approval of
the settlement, the Company engages in a merger or similar transaction in
which control of the Company changes. The proposed settlement is subject to
execution of a definitive settlement agreement and court approval. The
proposed settlement does not resolve any claims asserted against the
underwriter defendants by the class plaintiffs or any potential claims by the
underwriters against the Company. The settlement terms include a provision
by which the Company's maximum exposure to claims of contribution or
indemnity to the underwriters is $6.5 million, plus any attorney fees
associated with the litigation. The Company intends to vigorously defend any
claims for contribution or indemnity which might be asserted against the
Company by the underwriters.
Jackie Kimzey, chairman and chief executive officer of ProNet, said that
the Company believes that the proposed settlement is in the best interest of
the Company and its stockholders.
ProNet, based in Dallas, is a leading provider of wireless communication
services through its paging and security system operations. The company
serves more than 1.3 million subscribers through its five regional
SuperCenter locations in New York, Chicago, Houston, Charlotte and Stockton,
CA. ProNet's sophisticated proprietary paging applications offer
communications systems solutions to companies and value-added, personal
impact services to individuals.
-more-
<PAGE>
Certain statements contained in this press release are not based on
historical facts, but are forward-looking statements that are based upon
numerous assumptions as of the date of this release regarding future
conditions that could prove not to be accurate. Actual events, transactions
and results may materially differ from the anticipated transactions or
results described in such statements. The company's ability to achieve such
events or results is subject to certain risks and uncertainties. Such risks
and uncertainties include, but are not limited to, the existence of, demand
for, and acceptance of the company's products and services, the availability
of appropriate candidates for acquisition by the company, regulatory
approvals, economic conditions, the impact of competition and pricing,
results of financing efforts and other factors affecting the company's
business that are beyond the company's control, including but not limited to
the matters described from time to time in the company's SEC reports,
including the Form 10-K for the year ended December 31, 1996, filed with the
SEC on March 28, 1997. The company disclaims any obligation to update the
forward-looking statements contained in this press release.
###
<PAGE>
[Letterhead]
FOR IMMEDIATE RELEASE
For More Information Contact:
Kelly H. Love, Director of Investor
Relations (972) 687-2000
PRONET ANNOUNCES SETTLEMENT OF UNDERWRITERS DISPUTE
DALLAS, JULY 2, 1997 - PRONET INC. (NASDAQ - PNET) announced on May 15, 1997,
an agreement in principle to settle the securities class actions pending
against the Company in state and federal courts in Dallas, Texas. That same
announcement described a judgment-reduction agreement with the class
plaintiffs that capped ProNet's potential exposure to indemnity and
contribution claims by ProNet's former underwriters at $6.5 million, plus
attorneys' fees. Subsequent to that announcement, Lehman Brothers brought an
action against ProNet in New York state court seeking a declaration that its
indemnity agreement with the Company is applicable to the securities actions
pending in Dallas and enforceable.
ProNet today announces that it has reached an agreement with its former
underwriters that will resolve the New York declaratory judgment action and
will terminate the Company's potential liability to its former underwriters.
The agreement will also terminate the Company's potential liability to the
class plaintiffs under the judgment-reduction agreement. Under the terms of
the agreement reached with its former underwriters, ProNet will pay an
additional $400,000 toward its previously announced settlement with the class
plaintiffs. The underwriters will also pay $1.85 million to the class
plaintiffs.
The proposed class settlement is subject to the execution of a definitive
settlement agreement by all of the parties and is subject to court approval.
ProNet, based in Dallas, is a leading provider of wireless communication
services through its paging and security system operations. ProNet serves
more than 1.3 million subscribers through its five regional SuperCenter
locations in New York, Chicago, Houston, Charlotte and Stockton, CA.
ProNet's sophisticated proprietary paging applications offer communication
systems solutions to companies and value-added, personal impact services to
individuals.
-more-
<PAGE>
Certain statements contained in this press release are not based on
historical facts, but are forward-looking statements that are based upon
numerous assumptions as of the date of this release regarding future
conditions that could prove not to be accurate. Actual events, transactions
and results may materially differ from the anticipated transactions or
results described in such statements. ProNet's ability to achieve such events
or results is subject to certain risks and uncertainties. Such risks and
uncertainties include, but are not limited to, the existence of, demand for,
and acceptance of ProNet's products and services, the availability of
appropriate candidates for acquisition by ProNet, regulatory approvals,
economic conditions, the impact of competition and pricing, results of
financing efforts, results of litigation and other factors affecting ProNet's
business that are beyond ProNet's control, including but not limited to
the matters described from time to time in ProNet's SEC reports, including
the Form 10-K for the year ended December 31, 1996, filed with the SEC on
March 28, 1997. ProNet disclaims any obligation to update the forward-looking
statements contained in this press release.
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