<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
(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, 1998
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
Commission file number 0-22610
DAVEL COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 37-1064777
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
10120 Windhorst Road
Tampa, Florida 33619
(address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (813) 628-8000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
None
Securities registered pursuant to Section 12 (g) of the Act:
Common Stock, $.01 par value per share
(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 the 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. ( )
As of March 31, 1999, the aggregate market value of the voting stock held
by non-affiliates of the registrant was approximately $48,760,586. As of March
31, 1999, there were 10,536,155 shares of the registrant's Common Stock
outstanding.
Documents incorporated by reference: None
<PAGE>
This Form 10-K/A amends the Annual Report on Form 10-K for the year ended
December 31, 1998 of Davel Communications, Inc. (the "Company"), filed on April
15, 1999, by providing that information required by items 10, 11, 12 and 13 of
Form 10-K which was not included with the April 15, 1999 filing.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names and ages of the Company's
directors and executive officers and their positions with the Company:
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
David R. Hill(1)(2) 67 Chairman of the Board of Directors
Robert D. Hill(1) 47 President and Chief Executive
Officer and Director
Michael E. Hayes 41 Senior Vice President and Chief
Financial Officer and Director
Paul B. Demirdjian 38 Senior Vice President and Chief
Information Officer
Lawrence T. Ellman 47 Senior Vice President of
National Sales
Michael G. Kouri 54 Senior Vice President of
Business Development
Theodore C. Rammelkamp, Jr. 54 Senior Vice President and
General Counsel and Secretary
Bruce W. Renard 45 Senior Vice President of Regulatory
And External Affairs
Charles R. Resnick 48 Senior Vice President of
Field Operations
Marlin E. Turnipseed 45 Senior Vice President of
National Sales
F. Philip Handy(1)(3) 54 Director
Justin S. Maccarone 40 Director
Thomas M. Vitale(2)(3) 41 Director
A. Jones Yorke(2)(3) 67 Director
Samuel Zell 57 Director
- -----------
</TABLE>
(1) Member of the Executive Committee
(2) Member of the Audit Committee
(3) Member of the Compensation Committee
2
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David R. Hill, Chairman of the Board of Directors, founded Davel. He has
been Chairman of the Board of Davel since its date of incorporation. He served
as the Chief Executive Officer of Davel through December 1994. He has been
involved in industries related to electronics and telecommunications since 1951.
Mr. Hill is the father of Robert D. Hill.
Robert D. Hill, President and Chief Executive Officer, joined Davel in 1981
as the general manager of its largest telephone remanufacturing facility.
Between January 1990 and December 1994, he served as Davel's President and Chief
Operating Officer. Since January 1995, he has served as Davel's President and
Chief Executive Officer.
Michael E. Hayes, Senior Vice President and Chief Financial Officer, joined
Davel in 1992 as its Controller and Treasurer. Mr. Hayes became Vice President
and Chief Financial Officer in August 1993 and became a Senior Vice President in
January 1996.
Paul B. Demirdjian, Senior Vice President and Chief Information Officer,
joined Davel in 1984. From 1990 to June 1998, he served as Davel's Senior Vice
President of Operations.
Lawrence T. Ellman, Senior Vice President of National Sales, joined Peoples
Telephone in June 1994 as President of its payphone division. In February 1996
he became Executive Vice President of National Accounts, and was named Senior
Vice President of National Accounts of Davel following its merger with Peoples
Telephone in December 1998.
Michael G. Kouri, Senior Vice President of Business Development, served as
a financial consultant to Davel from October 1990 through August 1993. He was
appointed Senior Vice President of Development and Finance of Davel in November
1993. Prior to his employment with Davel, he was Chairman of the Board and Chief
Executive Officer of Elite Financial Corporation, a financial services company.
Two of Elite's subsidiaries, Telco Leasing Acceptance Corporation and Eastern
Payphones, Inc., specialize in the financing, operating and marketing of
payphones.
Theodore C. Rammelkamp, Jr., Senior Vice President, General Counsel and
Secretary, has been with Davel since April 1994. Prior to becoming an employee
of Davel, Mr. Rammelkamp was a member of the law firm of Rammelkamp, Bradney,
Dahman, Kuster, Keaton, Fritsche & Lindsay, P.C. from 1979 through March 1994,
serving as its managing partner from January 1991 through March 1994.
Bruce W. Renard, Senior Vice President of Regulatory and External Affairs,
joined Peoples Telephone as General Counsel and Vice President of Regulatory
Affairs in January 1992. In February 1996, he became General Counsel and
Executive Vice President of Legal and Regulatory Affairs and Carrier Relations.
Following the merger of Peoples Telephone with Davel in December 1998, Mr.
Renard was appointed Senior Vice
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President of Regulatory and External Affairs of Davel following its merger with
Peoples Telephone in December 1998.
Charles R. Resnick, Senior Vice President of Field Operations, joined Davel
in October 1998. Mr. Resnick served as the Vice President of Strategic
Relationships and Applied Technology for Danka Business Systems, PLC from 1994
to 1998. From 1991 to 1993, Mr. Resnick served as Undersecretary of the United
States Department of Agriculture and Assistant to the President of the United
States.
Marlin E. Turnipseed, Senior Vice President of Sales and Marketing, joined
Davel in 1988 as National Sales Manager and served as Davel's Vice President of
Sales and Marketing from August 1993 to June 1998. Prior to joining Davel, Mr.
Turnipseed served for eleven years as a regional sales manager for U.S. Steel.
F. Philip Handy was appointed to the board of directors of Davel in June
1998. Mr. Handy is a managing director of Equity Group Corporate Investments, a
division of EGI. Prior to joining EGI, Mr. Handy was Chairman and President of
Winter Park Capital Company, a private investment firm he founded in 1980. He
also serves as a director of Anixter International Inc., Banca Quadrum, S.A.,
Q-Tel S.A. de C.V., Jacor Communications, Inc., Chart House Enterprises, Inc.
and Transmedia Network Inc.
Justin S. Maccarone was appointed to the Board of Directors of Davel
following its merger with Peoples Telephone in December 1998. Mr. Maccarone is a
partner at UBS Capital II LLC and its affiliate UBS Capital LLC. Prior to
joining UBS Capital in 1993, he was a Senior Vice President with GE Capital
Corporation.
Thomas M. Vitale has been a partner in the law firm of Mayer, Brown & Platt
for over five years.
A. Jones Yorke has been Chairman of the Board of Auerbach, Pollack &
Richardson, Inc., a registered securities dealer, and Auerbach Financial Group,
Inc., a financial holding company (''Auerbach''), since June 1998. Mr. Yorke
also formerly served as Chairman of Auerbach from November 1994 through November
1995. From November 1995 through June 1998, Mr. Yorke was the Chairman and Chief
Executive Officer of Weatherly Securities, a registered securities dealer. Mr.
Yorke was a financial consultant to and President of Asset Channels, Inc., an
investment company, from 1990 to 1996 and currently serves as Chairman of 42nd
Street Development Corporation, a not-for-profit corporation.
Samuel Zell became a director of Davel in June 1998. Mr. Zell was the
founder, and serves as Chairman of the Board, of EGI, which is an affiliate of
Samstock (a principal shareholder of Davel). In addition, he serves on the board
of directors of Anixter International Inc., American Classic Voyages Co., Chart
House Enterprises, Inc., Fred Meyer, Inc., Jacor Communications, Inc. and
Manufactured Home Communities. Mr. Zell
4
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also serves on the board of trustees of Equity Residential Properties Trust,
Equity Office Properties Trust and Capital Trust. He is a non-executive director
of RAMCO Energy plc.
ITEM 11. EXECUTIVE OFFICER COMPENSATION AND BENEFITS
Executive Officer Compensation
The following tables and notes set forth the compensation of the Company's
Chief Executive Officer and the four highest paid executive officers whose
salary and bonuses exceeded $100,000 in the fiscal year ended December 31, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
- ------------------------------- ------------------------------------------ -------------------------------------
Common Securities
Other Annual Stock Underlying All Other
Name and Position Year Salary Bonus Compensation(1) Grants Options Compensation(2)
- ----------------- ---- -------- --------- --------------- ------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
David R. Hill, 1998 $400,000 $ -- $-- $100,000 -- $2,400
Chairman of the Board 1997 400,000 160,000 -- 100,000 34,412 2,250
1996 250,000 91,777 -- -- 200,00 2,250
Robert D. Hill, 1998 $250,000 $105,000 $-- $ 0 130,500 $3,908
President and Chief 1997 200,000 80,000 -- 40,000 17,206 2,400
Executive Officer 1996 200,000 33,664 -- 40,000 6,000 2,250
Paul B. Demirdjian, 1998 $190,000 $ 28,500 $-- $ 0 70,525 $1,171
Senior Vice President 1997 145,000 59,450 -- 30,000 12,824 2,091
and Chief Information 1996 145,000 30,696 -- 30,000 6,000 2,250
Officer
Michael G. Kouri, 1998 $170,000 $ 25,500 $-- $ 0 65,655 $3,348
Senior Vice President 1997 145,000 56,550 -- 30,000 12,183 2,091
of Business Development 1996 145,000 24,100 -- 30,000 6,000 2,250
Michael E. Hayes, 1998 $170,000 $ 25,500 $-- $ 0 88,920 $3,138
Senior Vice President 1997 120,000 49,200 -- 30,000 10,613 1,693
and Chief Financial Officer 1996 120,000 13,034 -- 30,000 6,000 1,995
</TABLE>
(1) Other Annual Compensation was paid in the form of perquisites and was less
than the level required for reporting.
(2) All Other Compensation disclosed in this column represents Davel's
contributions, both vested and unvested, to Davel's defined contribution
plan.
5
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OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
-----------------------------------------------------------
Percent of Total
----------------
Number of of All Options Exercise or Potential Realizable
--------- -------------- ---------- --------------------
Shares Underlying Granted to Base Price Expiration Value(1)
------------------ ---------- ---------- ---------- --------
Name Option Grants Employees Per Share Date 0%/5%/10%
- ---- ------------- --------- --------- ---- ----------
<S> <C> <C> <C> <C> <C>
David R. Hill 34,412(2) 6% $24.875 7/1/03 $0/$236,496/$522,596
Robert D. Hill 58,000(2) 10% 24.875 7/1/03 0/ 118,248/ 261,298
72,500(3) 13% 6.50 4/21/04 0/ 130,500/ 287,825
Paul B. Demirdjian 37,000(2) 6% 24.875 7/1/03 0/ 88,133/ 194,751
33,525(3) 6% 6.50 4/21/04 0/ 60,345/ 133,094
Michael G. Kouri 30,000(2) 5% 24.875 7/1/03 0/ 83,728/ 185,016
35,655(3) 6% 6.50 4/21/04 0/ 64,179/ 141,550
Michael E. Hayes 47,500(2) 8% 24.875 7/1/03 0/ 72,938/ 161,173
41,420(3) 7% 6.50 4/21/04 0/ 74,556/ 164,437
</TABLE>
(1) The values shown are purely hypothetical and have been calculated on the
assumption that the value of Davel Common Stock underlying an option
appreciates at the specified rate (0%, 5% or 10% per annum) from the date
of the grant of the option until its expiration. In fact, the options
cannot be valued without prediction of the future movement of the price of
Davel's stock. The amount realized from the options disclosed in this table
will depend upon, among other things, the continued employment of the
recipient of the option and the actual performance of Davel's stock during
the applicable period.
(2) Granted on July 1, 1998.
(3) Granted on April 21, 1999 for the 1998 fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
---------------- -----------------------------
Number of Underlying Unexercised In-The-Money Options
--------- ----------------------- -----------------------------
Shares Acquired Value Options at Year-End ($) at Year-End
--------------- ----- ------------------------- -----------------------------
Name on Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable (1)
- ---- ----------- -------- ------------------------- -----------------------------
<S> <C> <C> <C> <C>
David R. Hill.......... 0 0 211,471/ 22,941 $ 625,000/$ 0
Robert D. Hill......... 38,000 570,000 37,069/122,637 68,250/851,875
Paul B. Demirdjian..... 22,550 338,250 28,608/ 66,741 68,250/393,919
Michael G. Kouri....... 21,450 321,750 20,029/ 63,713 33,000/418,946
Michael E. Hayes....... 5,900 88,500 31,371/ 80,162 68,250/486,685
</TABLE>
(1) Equals the difference between the aggregate exercise price of such options
and the aggregate fair market value of the shares of Davel Common Stock
that would be received upon exercise, assuming such exercise occurred on
December 31, 1998, at which date the closing price of the Davel Common
Stock as quoted on the Nasdaq National Market was $18.25 per share. The
above valuations may not reflect the actual value of unexercised options,
as the value of unexercised options fluctuates with market activity.
6
<PAGE>
Employment Agreements
In June 1998, Davel entered into new employment agreements with Messrs.
Robert Hill, Rammelkamp, Hayes, Demirdjian, Kouri and Turnipseed (collectively,
the ''Executives''), which replaced certain employment agreements entered into
between Davel and the Executives in 1996 and subsequently amended in 1997.
Following the merger of Davel with Peoples Telephone, the Company also entered
into employment agreements with Messrs. Ellman and Renard. The employment
agreements provide for an initial employment period through December 31, 2000,
with automatic one-year renewals unless either party notifies the other at least
60 days prior to the end of any term. The employment agreements provide for an
annual base salary of at least $250,000 for Mr. Hill, $170,000 for Mr.
Rammelkamp, $170,000 for Mr. Hayes, $180,000 for Mr. Demirdjian, $170,000 for
Mr. Kouri, $130,000 for Mr. Turnipseed, $170,000 for Mr. Ellman and $170,000 for
Mr. Renard. The employment agreements provide for employment of such persons in
their current respective positions, subject to change or reassignment of duties
by Davel.
The employment agreements provide for certain fringe benefits and incentive
compensation as outlined below. Under the employment agreements, Davel may
terminate any Executive for cause (as defined therein). An Executive can
voluntarily terminate his employment agreement by providing 60 days' written
notice to Davel at any time. In the event of termination with cause or voluntary
termination the Executive will receive all accrued base pay and a credit for
certain unused vacation.
If Davel breaches any provisions of, terminates without cause or fails to
renew an employment agreement with any Executive, the Executive will be deemed
to have been involuntarily terminated. In the event of involuntary termination
or termination for a disability, all of such Executive's options fully vest and
all accrued base pay and a credit for certain unusual vacation benefits become
due. The Executive will also receive the greater of one year's base pay or the
remaining base pay due under the term of the employment agreement, the greater
of the target incentive bonus for such year or the highest annualized bonus
during the prior three years, and continuation of benefits for the remainder of
the term.
The Executives will be deemed to have been terminated upon a ''Change in
Control'' if any party other than David Hill or his descendants or Samstock
acquires control of 25% or more of the combined voting power of Davel and within
two years Davel terminates the Executive or the Executive resigns for any
reason. In the event of termination upon such a Change in Control, an Executive
will receive a severance payment equal to the sum of the Executive's base salary
and target incentive bonuses for the year in which the Change in Control
occurred multiplied by three, subject to certain reductions if such amounts
would constitute ''parachute payments'' under the Internal Revenue Code. In
addition, the Executive will receive those other benefits described in the
preceding paragraph afforded to the Executive as if he had been involuntarily
terminated.
7
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In September 1996, Davel entered into an employment agreement with Mr.
David Hill for employment in his current position as Chairman of the Board and
Chairman of the Executive Committee of the Board for six years at an annual base
salary of $400,000. Mr. David Hill has agreed to accept the duties commonly
involved in carrying out the position and any other duties as may be required.
Under the agreement, Mr. David Hill is eligible to receive a cash bonus as well
as a grant of options based upon the percentage by which the annual before tax
profit exceeds the annual before tax profit for 1996. Mr. David Hill has agreed
not to compete with Davel during his employment and for a period of one year
afterwards. The agreement also provides that, upon a change of control (as
defined therein), (1) all stock options previously awarded to Mr. David Hill
will vest and become immediately exercisable and (2) in the event of a
termination of Mr. David Hill, he will receive severance pay from Davel as
specified in his employment agreement.
Incentive Compensation
Davel has implemented a bonus plan that allows each Executive to receive a
substantial cash bonus. Under the plan, Mr. Robert Hill has a maximum bonus of
120% of his base pay with a target bonus of 60% of base pay, and Messrs.
Rammelkamp, Turnipseed, Demirdjian, Kouri, Hayes, Ellman and Renard have maximum
bonuses of 60% of base pay and target bonuses of 30% of base pay. The bonuses
are comprised of three parts: company objectives, departmental objectives and
personal objectives. The company objectives are based upon growth in earnings
per share and EBITDA, and the department and personal goals are determined with
respect to each Executive by January 30 of the applicable year. Davel also
maintains a stock option plan pursuant to which the Executives are granted
options to purchase Davel Common Stock at the latest closing price that is
available prior to the date the options are awarded. Under the employment
agreements, each Executive is awarded a minimum of 5,000 stock options each year
of his employ and may be awarded a greater number at the discretion of the
Compensation Committee.
Under the stock option plan, other employees may be granted Davel Common
Stock and options to purchase shares of Common Stock of Davel. The Compensation
Committee of the Board currently administers the Stock Option Plan. The
Compensation Committee determines which individuals will be granted options, the
number of shares to be subject to options and other terms and conditions
applicable to the grants. The employment agreement with Mr. David Hill provides
that Mr. David Hill will receive option grants in amounts within a range based
upon the percentage change in earnings per share of Davel Common Stock measured
against a base year (1996 being set as the base year). Mr. David Hill also
received a grant of options to purchase 200,000 shares of Davel Common Stock
upon the signing of his employment agreement.
8
<PAGE>
Pursuant to the Stock Option Plan, Mr. David Hill is also entitled to
annual grants of Davel Common Stock during the term of his employment agreement.
The employment agreement provides that the annual stock grant will be valued at
$100,000 for Mr. David Hill.
Davel maintains a bonus plan pursuant to which Mr. David Hill is eligible
to receive annual cash bonuses in an amount within a range based upon the
percentage change in earnings per share of Davel's Common Stock measured against
a base year (1996 being set as the base year). The incentive bonuses range from
5% to a maximum of 45% of his base salary.
401(k) Plan
Davel maintains a 401(k) Plan which is available to all employees of Davel,
including its executive officers. Davel provides a matching contribution to the
plan up to a maximum of 1.5% of the salary of the contributing employee. Davel's
contribution to an employee's account vests over a period of five years.
Compensation of Directors
Through December 31, 1995, Davel did not pay cash compensation for service
as directors. In 1996, Davel began paying cash compensation to directors who are
not employees of Davel in the amount of $2,500 per meeting. In April 1998,
Davel's Board of Directors approved a resolution to eliminate the per-meeting
payment and begin paying (effective as of the date of the 1998 annual meeting)
an annual cash retainer to directors who are not employees of Davel in the
amount of $20,000.
Directors of Davel who are not employees of Davel are also reimbursed for
their out-of-pocket expenses associated with attending meetings of the Board of
Directors and committees and are eligible to receive options granted pursuant to
Davel's Directors' Stock Option Plan. Davel also provides Mr. Yorke with
individual health insurance coverage.
Compliance with Section 16 of the Securities Exchange Act
Section 16(a) of the Securities Exchange Act generally requires the
officers and directors of a public company, and persons who own more than ten
percent of a registered class of a public company's equity securities, to file
reports of beneficial ownership and changes in beneficial ownership with the
Securities and Exchange Commission. Based solely on its review of the copies of
such reports received by it, or upon written representations obtained from
certain reporting persons, Davel believes that, during 1998, all Section 16(a)
filing requirements applicable to its officers, directors and ten-percent
shareholders were complied with.
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Compensation Committee Interlocks and Insider Participation
Until June 29, 1998, the members of the Compensation Committee in 1998 were
Messrs. Vitale, Yorke and Glen E. Barber, a former member of the Board of
Directors who resigned on that date. Following his appointment to the Board, Mr.
Handy filled the vacancy on the Compensation Committee created by Mr. Barber's
resignation. No member of the Compensation Committee was at any time during
1998, or formerly, an officer or employee of Davel or any subsidiary of Davel,
nor has any member of the Compensation Committee had any relationship with Davel
requiring disclosure under Item 404 of Regulation S-K under the Securities Act.
No executive officer of Davel has served as a director or member of the
Compensation Committee (or other committee serving an equivalent function) of
Davel.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information as of April 30, 1999
with respect to the beneficial ownership of Davel Common Stock by (1) each
person who is known by Davel to own beneficially more than five percent of the
Davel Common Stock, (2) each of Davel's directors and executive officers and (3)
all current directors and executive officers as a group. Unless otherwise
indicated, each person has sole voting power and investment power with respect
to the shares attributed to him.
<TABLE>
<CAPTION>
Number of
-------------
Shares
-------------
Beneficially Percentage
------------- ----------
Directors, Executive Officers and 5% Shareholders(1) Owned of Class
- ---------------------------------------------------- ------------- --------
<S> <C> <C>
David R. Hill(2)(3)(4).................................. 2,063,004 18.5%
Robert D. Hill(2)(3)(5)................................. 114,905 1.0%
Michael E. Hayes(2)(3)(6)............................... 74,841 *
Paul B. Demirdjian(2)(7)................................ 64,109 *
Lawrence T. Ellman(2)(8)............................... 29,387 *
Michael G. Kouri(2)(9).................................. 57,392 *
Theodore C. Rammelkamp, Jr.(2)(10)...................... 87,213 *
Bruce W. Renard(2)(11)................................. 97,500 *
Marlin E. Turnipseed(2)(12)............................. 53,839 *
F. Philip Handy(3)(13).................................. 2,034,559 18.3%
Justin S. Maccarone(3)(14).............................. 909,427 8.6%
Thomas M. Vitale(3)(15)................................. 28,000 *
A. Jones Yorke(3)(16)................................... 23,000 *
Samuel Zell(3)(17)...................................... 2,034,559 18.3%
Samstock, L.L.C.(18).................................... 2,034,559 18.3%
Goldman, Sachs & Co.(19)................................ 1,045,566 9.9%
UBS Capital II LLC(20).................................. 909,427 8.6%
Heartland Advisors, Inc.(21)............................ 879,054 8.2%
All current directors and executive officers as a group
(14 persons)(22)...................................... 4,751,748 42.7%
</TABLE>
* Represents less than 1.0%.
(1) For purposes of calculating the beneficial ownership of each shareholder, it
was assumed (in accordance with the Commission's definition of ''beneficial
ownership'') that such shareholder had exercised all options, conversion
rights or warrants by which such shareholder had the right, within 60 days
following April 30, 1999, to acquire shares of such class of stock.
(2) Such person is an employee of Davel.
(3) Such person is a director of Davel.
(4) Includes 211,471 shares that could be acquired within 60 days upon the
exercise of options granted pursuant to the Stock Option Plan.
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<PAGE>
(5) Includes 109,569 shares that could be acquired within 60 days upon the
exercise of options granted pursuant to the Stock Option Plan.
(6) Includes 72,791 shares that could be acquired within 60 days upon the
exercise of options granted pursuant to the Stock Option Plan.
(7) Includes 62,133 shares that could be acquired within 60 days upon the
exercise of options granted pursuant to the Stock Option Plan.
(8) Includes 29,387 shares that could be acquired within 60 days upon the
exercise of options granted pursuant to the Stock Option Plan.
(9) Includes 55,716 shares that could be acquired within 60 days upon the
exercise of options granted pursuant to the Stock Option Plan.
(10) Includes 85,645 shares that could be acquired within 60 days upon the
exercise of options granted pursuant to the Stock Option Plan.
(11) Includes 97,500 shares that could be acquired within 60 days upon the
exercise of options granted pursuant to the Stock Option Plan.
(12) Includes 51,181 shares that could be acquired within 60 days upon the
exercise of options granted pursuant to the Stock Option Plan.
(13) Includes 16,000 shares that could be acquired within 60 days upon the
exercise of options granted pursuant to the Directors' Stock Option Plan
and 2,018,559 shares beneficially owned by Samstock (including warrants to
acquire 350,000 shares of Davel Common Stock) that Messrs. Handy and Zell
could be deemed to beneficially own as a result of being principals of EGI,
an affiliate of Samstock. Each of Messrs. Handy and Zell disclaims
beneficial ownership of such shares.
(14) Includes 16,450 shares that could be acquired within 60 days upon the
exercise of options granted pursuant to the Directors' Stock Option Plan
and 892,977 shares beneficially owned by UBS Capital II LLC that Mr.
Maccarone could be deemed to beneficially own as a result of being a
principal of UBS Capital II LLC. Mr. Maccarone disclaims beneficial
ownership of such shares.
(15) Includes 28,000 shares that could be acquired within 60 days upon the
exercise of options granted pursuant to the Directors' Stock Option Plan.
(16) Includes 20,000 shares that could be acquired within 60 days upon the
exercise of options granted pursuant to the Directors' Stock Option Plan.
(17) Includes 16,000 shares that could be acquired within 60 days upon the
exercise of options granted pursuant to the Directors' Stock Option Plan
and 2,018,559 shares beneficially owned by Samstock (including warrants to
acquire 350,000 shares of Davel Common Stock) that Messrs. Handy and Zell
could be deemed to beneficially own as a result of being principals of EGI,
an affiliate of Samstock. Each of Messrs. Handy and Zell disclaims
beneficial ownership of such shares.
(18) Includes 293,304 shares and warrants to acquire 63,216 shares that are
beneficially owned by EGI--Davel Investors, L.L.C., a limited liability
company of which Samstock is the managing member.
(19) Based on a Schedule 13G filed on February 12, 1999, Goldman, Sachs & Co.
claims shared voting power of 798,914 shares and shared dispositive power
of 1,045,566 shares with The Goldman Sachs Group, L.P.
(20) Includes 16,450 shares that could be acquired within 60 days upon the
exercise of options granted pursuant to the Directors' Stock Option Plan.
Based on a Schedule 13D/A filed on January 14, 1999, UBS Capital II LLC
claims sole voting and dispositive power of 892,977 shares. UBS Capital
Holdings LLC, the parent company of UBS Capital II LLC, and UBS AG, the
parent company of UBS Capital Holdings LLC, may be deemed to beneficially
own the shares owned by UBS Capital II LLC. UBS AG also owns 646 shares of
Davel Common Stock.
(21) Based on a Schedule 13G/A filed on February 10, 1999, Heartland Advisors,
Inc. claims sole voting power of 482,189 shares and sole dispositive power
of 879,054 shares.
(22) Includes 863,392 shares that could be acquired within 60 days upon the
exercise of options granted pursuant to the Stock Option Plan and the
Directors' Stock Option Plan and 2,018,559 shares beneficially owned by
Samstock (including warrants to acquire 350,000 shares of Davel Common
Stock) that Messrs. Handy and Zell could be deemed to beneficially own as a
result of being
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principals of EGI, an affiliate of Samstock. Each of Messrs. Handy and Zell
disclaims beneficial ownership of such shares.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Davel has entered in the past, and New Davel may enter in the future, into
certain transactions with certain of its shareholders. During 1998, Mr. David R.
Hill, the Chairman of Davel received payments from Davel for the lease of
commercial real estate in Jacksonville, Illinois in the aggregate amount of
$258,000. In addition, Davel received payments from Hill for administrative
services provided to him by certain employees of Davel in the aggregate amount
of $85,000.
In connection with advisory services provided by EGI, an affiliate of
Samstock, to Davel related to its business combination with Peoples Telephone,
the Company paid EGI a fee in the form of 44,659 shares of Davel Common Stock,
equal to 0.35% of the transaction value. The Company has also agreed, beginning
in April 1999, to pay EGI a monthly advisory fee of $25,000 in connection with
certain consulting services provided to Davel.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment on Form 10-K/A to the Annual Report on
Form 10-K to be signed on its behalf by the undersigned, thereunto duly
authorized.
DAVEL COMMUNICATIONS, INC.
Date: April 30, 1999 By: /s/ Michael E. Hayes
-------------------------
Michael E. Hayes
Senior Vice President and
Chief Financial Officer
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