SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
June 14, 1996
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Date of Report (Date of earliest event reported)
Protocol Systems, Inc.
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(Exact name of registrant as specified in its charter)
Oregon 0-19943 93-0913130
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
8500 S.W. Creekside Place, Beaverton, Oregon 97008
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(Address of principal executive offices)
(503) 526-8500
(Registrant's telephone number, including area code)
Not applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Matters.
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The Agreement and Plan of Merger (the "Merger Agreement") dated as of February
20, 1996 among Protocol Systems, Inc. ("Protocol"), Protocol Merger
Corporation ("Merger Sub") and Pryon Corporation ("Pryon") provides for the
merger of Pryon and Merger Sub (the "Merger"), with Pryon becoming a wholly-
owned subsidiary of Protocol and all of the outstanding capital stock of Pryon
being converted into shares of Protocol common stock based on an exchange
ratio determined according to the Merger Agreement. The Merger Agreement
provides that the consideration to be paid by Protocol to the security holders
of Pryon in the Merger will be subject to adjustment if the average of the per
share closing price of Protocol common stock on the Nasdaq National Market for
the thirty consecutive trading days ending on June 14, 1996 (the "Protocol
Market Value") is less than $10.643 or more than $13.486. The Merger
Agreement provides that if the Protocol Market Value is more than $13.486, the
aggregate consideration to be paid to Pryon security holders will be the
number of shares of Protocol common stock determined by dividing $31.3 million
by the Protocol Market Value.
The Protocol Market Value has been determined to be $23.49. Accordingly, if
the proposed transaction is approved by the shareholders of Pryon and Protocol
at meetings scheduled to be held on July 8, 1996 and July 10, 1996,
respectively, and all other conditions to the Merger are satisfied, Protocol
would issue 5.6458 shares of Protocol common Stock in exchange for each
outstanding share of Pryon capital stock upon consummation of the Merger.
Protocol would also issue options to purchase Protocol common stock in
replacement of each outstanding option to purchase Pryon common stock based on
the exchange ratio of 5.6458 shares of Protocol common stock for each share of
Pryon common stock. Based on the Protocol Market Value of $23.49, a total of
approximately 1,332,485 shares of Protocol common stock (subject to adjustment
for fractional shares) including approximately 121,385 shares of Protocol
common stock to be issued upon the exercise of replacement stock options
(subject to adjustment for fractional shares) would be issued upon
consummation of the Merger. The Protocol common stock to be issued in the
Merger, including Protocol common stock to be issued upon the exercise of
replacement stock options, would represent approximately 14.2% of the weighted
average number of shares of Protocol common stock outstanding on a fully-
diluted basis after the Merger.
Protocol filed a Registration Statement on Form S-4 (File No. 333-03316) with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, relating to the shares of Protocol common stock issuable in
connection with the Merger on April 9, 1996. A Joint Proxy
Statement/Prospectus containing information about the Merger was mailed to
shareholders of Protocol and Pryon on or about June 5, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
PROTOCOL SYSTEMS, INC.
Date: June 20, 1996 By:/s/ Craig M. Swanson
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Craig M. Swanson
Vice President and
Chief Financial Officer
