SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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 Section 240.14a-11(c) or Section 240.14a-12
Peoples Telephone Company, Inc.
(Name of Registrant as Specified In Its Charter)
---------------------------------------------------------------------------
(Name of Persons(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(4)
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>
PEOPLES TELEPHONE COMPANY, INC.
NOTICE OF 1995 ANNUAL MEETING OF SHAREHOLDERS
To Be Held On August 25, 1995
----------------
TO THE SHAREHOLDERS OF PEOPLES TELEPHONE COMPANY, INC.:
The Annual Meeting of Shareholders of PEOPLES TELEPHONE COMPANY, INC.,
a New York corporation (the "Company"), will be held at the Radisson Mart
Plaza Hotel at 711 Northwest 72nd Avenue, Miami, Florida 33126, on August
25, 1995, at 10:00 a.m., for the following purposes:
1. To elect four persons to the Company's Board of Directors (by the
holders of Common Stock and Series C Cumulative Convertible Preferred
Stock, voting together as a single class), as more fully described in
the accompanying Proxy Statement, to hold office until the next Annual
Meeting of Shareholders and until their respective successors are duly
elected and qualified; and
2. To transact all other business that may properly come before the
meeting and all adjournments of the meeting.
Pursuant to the terms of the Company's Series C Cumulative Convertible
Preferred Stock (the "Preferred Stock"), the holders of the Preferred Stock
are entitled to vote on all matters submitted to the shareholders for a
vote together with the holders of the Common Stock, voting together as a
single class, with each share of Common Stock entitled to one vote per
share and each share of Preferred Stock entitled to one vote for each share
of Common Stock issuable upon the conversion of the Preferred Stock as of
the record date. As of the close of business on July 20, 1995, the record
date for the meeting, each share of Preferred Stock was convertible into
19.04762 shares of Common Stock.
Whether or not you expect to be present at the meeting, please sign,
date and return the enclosed proxy in the enclosed envelope as promptly as
possible.
By Order of the Board of Directors
/s/ FRANCIS J. HARKINS
Francis J. Harkins, Secretary
July 25, 1995
THIS IS AN IMPORTANT MEETING AND ALL SHAREHOLDERS ARE INVITED TO ATTEND THE
MEETING IN PERSON. THOSE SHAREHOLDERS WHO ARE UNABLE TO ATTEND IN PERSON
SHOULD PROMPTLY EXECUTE AND RETURN THE ENCLOSED PROXY CARD. SHAREHOLDERS
WHO EXECUTE A PROXY CARD MAY ATTEND THE MEETING, REVOKE THEIR PROXY AND
VOTE THEIR SHARES IN PERSON.
<PAGE>
PEOPLES TELEPHONE COMPANY, INC.
PROXY STATEMENT
_______________________
1995 ANNUAL MEETING OF SHAREHOLDERS
To Be Held On August 25, 1995
_______________________
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Peoples Telephone Company, Inc., a New York
corporation (the "Company"), of proxies from the holders of common stock,
par value $.01 per share ("Common Stock") and Series C Cumulative
Convertible Preferred Stock, par value $.01 per share ("Preferred Stock"),
of the Company for use at the 1995 Annual Meeting of Shareholders of the
Company (the "Annual Meeting") and at any adjournments or postponements of
the Annual Meeting.
The Annual Meeting will be held at the Radisson Mart Plaza Hotel at
711 Northwest 72nd Avenue, Miami, Florida 33126, on August 25, 1995, at
10:00 a.m. The Company's 1994 Annual Report to Shareholders accompanies
this Proxy Statement but does not form a part of this Proxy Statement. It
is expected that this Proxy Statement will be mailed to the shareholders of
the Company on or about July 25, 1995. The principal executive offices of
the Company are located at 2300 N.W. 89th Place, Miami, Florida 33172.
OUTSTANDING STOCK AND VOTING RIGHTS
On July 19, 1995, the Company issued to UBS Partners, Inc. ("UBS
Partners") 150,000 shares of Preferred Stock for gross proceeds of $15.0
million (the "Preferred Stock Investment"). Pursuant to the terms of the
Preferred Stock, the holders of the Preferred Stock are currently entitled
to elect two members of the Board of Directors of the Company. The terms
of the Preferred Stock also provide that as long as the Preferred Stock is
entitled to elect one director, the Board of Directors shall consist of six
directors. UBS Partners has elected only one of its designees, Mr. Charles
J. Delaney, to serve on the Board of Directors of the Company. UBS
Partners has advised the Board of Directors that it will, at or about the
time of the Annual Meeting, elect Mr. Jeffrey J. Keenan to serve as the
second designee of UBS Partners on the Board of Directors.
In addition to the right to elect two of the six directors of the
Board of Directors discussed in the preceding paragraph, the holders of the
Preferred Stock are entitled to vote on all matters submitted to the
shareholders of the Company (including the election of the four directors
with regard to which the holders of Common Stock are entitled to vote) for
a vote together with the holders of the Common Stock, voting together as a
single class, with each share of Common Stock entitled to one vote per
share and each share of Preferred Stock entitled to one vote for each share
of Common Stock issuable upon conversion of the Preferred Stock. As of the
date of this Proxy Statement, the Board of Directors knows of no business
other than the election of directors which is to be submitted to the
shareholders of the Company at the Annual Meeting.
<PAGE>
In accordance with the Bylaws of the Company, the Board of Directors
has fixed the close of business on July 20, 1995 as the record date for the
determination of shareholders entitled to notice of, and to vote at, the
Annual Meeting. Only shareholders of record at the close of business on
that date will be entitled to vote. Each shareholder who submits a proxy
on the accompanying form has the power to revoke it by notice of revocation
directed to the proxy-holders or to the Company at any time before it is
voted. Unless authority is withheld, proxies which are properly executed
will be voted for the proposal set forth on the proxies. Although a
shareholder may have given a proxy, the holder may nevertheless attend the
meeting, revoke the proxy and vote in person.
At the close of business on July 20, 1995, there were 16,073,176
shares of Common Stock outstanding and 150,000 shares of Preferred Stock
(convertible into 2,857,143 shares of Common Stock) outstanding. Every
holder of record of Preferred Stock and Common Stock of the Company at the
close of business on July 20, 1995 is entitled to notice of the meeting and
to vote, in person or by proxy, 19.04762 votes for each share of Preferred
Stock and one (1) vote for each share of Common Stock, as the case may be,
held by such holder. A majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at the Annual
Meeting. Under the laws of the State of New York (in which the Company is
incorporated), the election of directors requires the affirmative vote of a
majority of the votes cast at the meeting by the holders of shares entitled
to vote thereon. For purposes of determining whether the proposal has
received a majority vote, abstentions will not be included in the vote
totals and, in instances where brokers are prohibited from exercising
discretionary authority for beneficial owners who have not returned a proxy
(so called "broker non-votes"), those votes will not be included in the
vote totals. However, abstentions and broker non-votes will be counted in
the determination of a quorum.
PROPOSAL 1
ELECTION OF DIRECTORS
As discussed under "OUTSTANDING STOCK AND VOTING RIGHTS," the holders
of the Preferred Stock have the right to elect two of the six directors of
the Company. With regard to the remaining four directors, the Board of
Directors has nominated the following four persons to serve as directors of
the Company until the next Annual Meeting of Shareholders and until their
successors are duly elected and qualified. Proxies cannot be voted for
more than four persons. With the exception of Jeffrey Hanft and Robert D.
Rubin, none of the four nominees listed below and the directors elected or
to be elected by the holders of the Preferred Stock is a current or former
employee of the Company or its subsidiaries. It is intended that proxies
will be voted for the nominees listed below, all of whom are presently
serving as directors of the Company.
To the best of the Company's knowledge, each of the nominees for
director is able and intends, if elected, to serve on the Board of
Directors. If, prior to the Annual Meeting, any of the nominees should
become unable to serve for any reason, the persons named as proxies will
have full discretion to vote for all other persons who are nominated. The
names and ages of, and certain other information about, the nominees for
election are set forth below:
2
<PAGE>
JEFFREY HANFT, age 49, has been the Chairman of the Board of Directors
and the Chief Executive Officer of the Company and its predecessor since
December 1983. He was also the President of the Company and its
predecessor from December 1983 until June 1990 and from September 1993
until June 1994. Mr. Hanft was the chairman of the Florida Pay Telephone
Association from 1987 to December 1990 and the chairman of the American
Public Communications Council ("APCC") from April 1988 to January 1992.
Mr. Hanft is currently the chairman of the Legal Committee of the APCC and
chairman emeritus of the APCC.
JODY FRANK, age 43, has served as a director of the Company and its
predecessor since September 1986. Since February 1990, he has been a vice
president of Shearson Lehman and, after Smith Barney acquired the assets of
Shearson Lehman in 1994, Smith Barney Shearson.
ROBERT E. LUND, age 51, was elected as a director of the Company in
May 1994. From September 1990 to December 1991, Mr. Lund was Chairman and
Chief Executive Officer of International Telecharge, Inc., a
telecommunications company. From February 1993 until October 1994 (when
Newtrend, L.P. was sold), Mr. Lund served as Chief Operating Officer of
Newtrend, L.P., a provider of software and professional services. Since
December 1994, Mr. Lund has served as President and Chief Executive Officer
of S2 Software, Inc., a Dallas, Texas software company.
ROBERT D. RUBIN, age 36, joined the Company in August 1989 as
Executive Vice President and became President in June 1994 and a director
in February 1995. Mr. Rubin is also chairman of the Company's merger and
acquisition committee. Mr. Rubin was an attorney from August 1984 to
August 1989 specializing in mergers and acquisitions, securities law and
general corporate law.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO ELECT THE
FOUR NOMINEES TO THE BOARD.
As discussed under "OUTSTANDING STOCK AND VOTING RIGHTS" above, the
holder of the Preferred Stock elected Charles J. Delaney to serve as a
director of the Company in July 1995, and has advised the Board of
Directors that it will elect Jeffrey J. Keenan to serve on the Board of
Directors at or about the time of the Annual Meeting. Certain information
about Messrs. Delaney and Keenan is set forth below:
CHARLES J. DELANEY, age 35, has been President of UBS Capital
Corporation, a wholly-owned subsidiary of Union Bank of Switzerland and an
affiliate of UBS Partners ("UBS Capital"), since January 1993 and Managing
Director in charge of the Leveraged Finance Group of the Corporate Banking
Division of Union Bank of Switzerland since May 1989. Prior to May 1989,
Mr. Delaney was Vice President of Marine Midland Bank, N.A. Mr. Delaney is
also a director of Specialty Foods Corporation, SDW Holding Corporation and
RU Corporation.
3
<PAGE>
JEFFREY J. KEENAN, age 38, has been a Vice President of UBS Partners
since January 1995 and a director of UBS Partners since March 1995. Mr.
Keenan joined UBS Capital in June 1994 as a Managing Director. Prior to
joining UBS Capital, Mr. Keenan was Managing General Partner of the WSW
Fund, a $250 million equity investment fund. From 1988 until 1991, he was
a General Partner at Acadia Partners, L.P., a $1.8 billion investment fund
and prior thereto, a Managing Director of AEA Investors, Inc., a $500
million equity investment fund. Mr. Keenan is a director of Choctaw Maid
Farms, Inc. and United Building Materials Corporation.
Charles Delaney replaced Ronald Gelber as a director of the Company
following Mr. Gelber's resignation in connection with the closing of the
Preferred Stock Investment on July 19, 1995. Jeffrey Keenan is expected
to replace current director Richard Whitman, who has not been renominated
by the Board of Directors.
MEETINGS AND COMMITTEES OF THE BOARD
Seventeen meetings of the Board of Directors were held during 1994.
Each of the directors of the Company participated, during the period of
1994 when he was a director, in at least 75% of the total of the meetings
of the Board of Directors and the meetings of the committees on which the
Board member served. Except for Mr. Hanft and Mr. Rubin, all of the
directors of the Company are reimbursed for all travel and other expenses
incurred in attending the meetings.
The Compensation Committee held seven meetings during 1994. The
Compensation Committee's responsibilities include, among other things,
recommending salary adjustments, establishing bonuses and granting options
to employees. Messrs. Robert E. Lund, Bernard M. Frank and Ronald Gelber
served on the Compensation Committee in 1994. Mr. Bernard M. Frank
resigned as a director, and as a committee member, in February 1995. Mr.
Jody Frank replaced him on the Compensation Committee. Mr. Ronald Gelber
resigned as a director, and as a committee member, in July 1995. No
additional fees were paid to directors for serving on the Compensation
Committee in 1994.
The Audit Committee held two meetings during 1994. Messrs. Jody
Frank, Ronald Gelber and Richard Whitman served on the Audit Committee in
1994. Mr. Gelber resigned as a director, and as a committee member, in
July 1995. The Audit Committee's responsibilities include, among other
things, recommending independent auditors to the Board, reviewing the scope
of audit functions of the independent auditors and reviewing audit reports
rendered by the independent auditors.
The Nominating Committee held one meeting during 1994. The
responsibilities of the Nominating Committee include the recommendation of
candidates for nomination as directors of the Company. Messrs. Jeffrey
Hanft and Jody Frank served on the Nominating Committee in 1994. The
Nominating Committee will consider nominees recommended by shareholders.
Nominees for election at the 1996 Annual Meeting of Shareholders should be
submitted to the Board of Directors before December 26, 1995.
4
<PAGE>
DIRECTORS COMPENSATION AND CONSULTING ARRANGEMENTS
For 1995, all directors will receive, as compensation for serving on
the Board of Directors, $500 per person for each meeting attended
telephonically and $1,000 per person for each meeting attended in person.
Upon election (or re-election) by the shareholders of the Company at an
annual meeting of shareholders, pursuant to the terms of the Company's 1993
Non-Employee Director Stock Option Plan, each non-employee director of the
Company receives an option to purchase 10,000 shares of Common Stock of the
Company. Non-employee directors who are chosen to fill a newly created
directorship or vacancy in the Board of Directors are also granted an
option to purchase 10,000 shares of Common Stock of the Company. The
exercise price of any option granted to directors is the fair market value
of the Common Stock of the Company on the date the option is granted.
Jody Frank has agreed to provide consulting services to the Company in
the areas of financial analysis and acquisitions. Mr. Frank received a fee
of $50,000 in 1994. In 1995, Mr. Frank will receive a monthly fee of
$2,000 for such consulting services. Mr. Frank also received a grant of
options on 15,000 shares of Common Stock of the Company in 1994.
Bernard M. Frank, who was a director of the Company and a Compensation
Committee member in 1994, received $25,000 and a grant of options on 15,000
shares of Common Stock of the Company in 1994. Mr. Frank resigned from the
Board of Directors and the Compensation Committee in February 1995. Mr.
Frank is the father of Jody Frank.
Richard Whitman received $47,500 in 1994 for providing consulting
services to the Company. Mr. Whitman received a grant of options on 15,000
shares of Common Stock of the Company in 1994.
Ronald Gelber received fees of $50,000 in 1994 from the Company for
serving on its Board of Directors. In 1995, prior to his resignation, Mr.
Gelber received a monthly fee of $2,000 for serving as the Chairman of the
Audit Committee. In 1994, Mr. Gelber also received a grant of options on
15,000 shares of Common Stock of the Company. Mr. Gelber resigned from
the Board of Directors and the Compensation Committee in July 1995.
Robert Lund received $32,500 from the Company in 1994 for consulting
services and for serving on its Board of Directors. Mr. Lund also received
a grant of options on 15,000 shares of Common Stock of the Company in 1994.
5
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth certain information concerning the
beneficial ownership of the Common Stock of the Company as of June 30, 1995
(except as otherwise indicated) by (i) each person known by the Company to
beneficially own more than five percent of the outstanding Common Stock of
the Company, (ii) each current director and nominee for director of the
Company, (iii) each executive officer named in the Summary Compensation
Table, and (iv) all directors and executive officers of the Company, as a
group. Except as otherwise indicated, the persons named in the table have
the sole voting and investment power with respect to the shares shown as
beneficially owned by them. Included in the following table is UBS
Partners, the owner of 150,000 shares of Preferred Stock issued pursuant to
the closing of the Preferred Stock Investment on July 19, 1995, which
shares of Preferred Stock are immediately convertible, at the option of UBS
Partners, into 2,857,143 shares of Common Stock (or 15.09% of the
outstanding Common Stock as of June 30, 1995, determined in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934).
AMOUNT AND NATURE PERCENT
NAME OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP(1) OF CLASS
- ------------------------ -------------------------- --------
Jeffrey Hanft 806,529(2)(3) 4.93%
Robert D. Rubin 344,833(3) 2.12%
Richard F. Militello 306,275(3)(4) 1.89%
Richard Whitman 264,219(5) 1.64%
Jody Frank 214,262(5)(6) 1.32%
Bruce W. Renard 115,833(3) *
Lawrence T. Ellman 30,000(3) *
Robert E. Lund 31,350(5) *
Charles J. Delaney 0(7) -
UBS Partners
299 Park Avenue
New York, New York 10171 2,857,143(8) 15.09%
Kayne Anderson Investment
Management, Inc.
1800 Avenue of Stars
Los Angeles, California 90067 1,023,200(9) 6.37%
Creditanstalt American Corp.
245 Park Avenue
New York, New York 10167 850,000(9)(10) 5.07%
6
<PAGE>
All directors and executive 2,199,134(2)(3)(4)
officers as a group (5)(6)(11) 12.80%
(12 persons)
_________________________
* Less than one percent.
(1) Includes shares of Common Stock issuable upon the exercise of stock
options, which are exercisable within 60 days of June 30, 1995.
(2) Includes 11,980 shares of Common Stock held by Rikki Hanft, the minor
daughter of Jeffrey Hanft.
(3) Includes options to purchase 834,833 shares of Common Stock granted
under the Company's stock option plans to the following executive
officers: 286,667 to Jeffrey Hanft (at an average exercise price of
$8.14 per share); 229,333 to Robert D. Rubin (at an average exercise price
of $8.14 per share); 173,000 to Richard F. Militello (at an average
exercise price of $8.15 per share); 115,833 to Bruce W. Renard (at an
average exercise price of $6.18 per share); and 30,000 to Lawrence T.
Ellman (at an average exercise price of $5.69 per share).
(4) Includes 5,625 shares of Common Stock owned by Richard F. Militello as
custodian for Laura Militello, Sara Militello and Michael Militello,
his minor children.
(5) Includes options to purchase shares of Common Stock granted to the
following directors: 60,000 to Richard Whitman (at an average
exercise price of $10.03 per share); 105,000 to Jody Frank (at an
average exercise price of $8.70 per share); and 30,000 to Robert E. Lund
(at an average exercise price of $8.00 per share).
(6) Includes 40,050 shares of Common Stock in a voting trust of which Jody
Frank is the beneficial owner. Also includes 3,812 shares for which
Jody Frank is custodian and as to which Aaron Frank, Rebekah Frank and
Lucy Frank, Mr. Frank's minor children, are the beneficial owners of 1,812
shares, 1,000 shares and 1,000 shares, respectively.
(7) Mr. Delaney disclaims beneficial ownership of the Preferred Stock
owned by UBS Partners, and of the Common Stock into which the
Preferred Stock is convertible.
(8) Represents shares of Common Stock issuable upon conversion of 150,000
shares of Preferred Stock currently outstanding. All of the
outstanding Preferred Stock is owned by UBS Partners (a wholly-owned
subsidiary of Union Bank of Switzerland).
(9) Information provided by Schedule 13D and/or 13Gs filed by such
persons. The Company has not independently verified such information.
(10) Represents currently exercisable warrants received in connection with
a previous credit facility between the Company and Creditanstalt-
Bankverein (of which Creditanstalt American Corporation
7
<PAGE>
is a wholly-owned subsidiary) and 150,000 shares of Common Stock obtained
upon the exercise of warrants in connection with a previous credit
facility. The currently exercisable warrants expire March 12, 2000 and are
exercisable for 700,000 shares of Common Stock or the Company's Series B
Preferred Stock at an average price of $7.86 per share. Each share of
Series B Preferred Stock is convertible into one share of Common Stock.
See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."
(11) Includes options to purchase 81,834 shares of Common Stock granted to
executive officers of the Company not named in the Summary Compensation
Table.
OWNERSHIP AND TRANSACTION REPORTS
Under Section 16 of the Securities Exchange Act of 1934, the Company's
directors and certain of its officers, and beneficial owners of more than
10% of the outstanding Common Stock, are required to file reports with the
Securities and Exchange Commission concerning their ownership of and
transactions in Common Stock; such persons are also required to furnish the
Company with copies of such reports. To the Company's knowledge, based
solely on a review of the copies of such reports furnished to the Company
and related information furnished to the Company, the Company believes that
all such filing requirements were complied with in a timely manner with
respect to 1994.
EXECUTIVE OFFICERS
The principal occupation of each executive officer (other than Messrs.
Hanft and Rubin) for at least the last five years is set forth below:
RICHARD F. MILITELLO, age 45, has been employed by the Company since
October 1986. He served as Chief Financial Officer of the Company from
October 1986 to August 1993, as Vice President - Finance from June 1988 to
August 1993, and as Chief Operating Officer since August 1993.
BONNIE S. BIUMI, age 33, joined the Company in July 1994 as Chief
Financial Officer. Prior to joining the Company, Ms. Biumi was a Senior
Manager with Price Waterhouse LLP in Miami, Florida. Ms. Biumi is a
certified public accountant.
LAWRENCE T. ELLMAN, age 43, joined the Company in June 1994 as
President of its Pay Telephone Division. From 1990 until joining Company,
Mr. Ellman was President of Atlantic Telco Joint Venture, an independent
public pay telephone operator acquired by the Company in June 1994. For
approximately eight years prior thereto, he was Executive Vice President
and Chief Financial Officer of American Potomac Distributing Company, a
beverage distributor.
F.J. POLLAK, age 32, has been employed by the Company since November
1993 as President of PTC Cellular, Inc. From September 1992 through
October 1993, Mr. Pollak was Marketing Director for Weisman Enterprises
("Weisman"), the holding company for Intera Communications, Best Vendors
and Mobile
8
<PAGE>
Merchandising, Inc. From January 1984 through September 1993, he was
Executive Vice President of Nationwide Vending Services, Inc., whose assets
were sold to Weisman.
BRUCE W. RENARD, age 41, joined the Company as Vice President -
Regulatory Affairs/General Counsel in January 1992. From September 1, 1991
to December 31, 1991, Mr. Renard was a sole practitioner specializing in
legal and regulatory consulting services to the telecommunications and
utility industries. From August 1984 to September 1991, Mr. Renard was a
partner with the Florida law firm of Messer, Vickers, Caparello, French and
Madsen, managing the utility and telecommunications law sections of the
firm. Prior to that time Mr. Renard served as Associate General Counsel
for the Florida Public Service Commission.
KAREN V. GARCIA, age 38, joined the Company in October 1990 as
National Sales Manager. Ms. Garcia's previous employment included 13 years
with the Bell System, two of which were at New York Telephone Company and
the remaining eleven with Southern Bell Telephone Company and has served as
Vice President of Sales and Customer Support since November 1993.
9
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth, for the fiscal years ended December
31, 1994, 1993 and 1992, the compensation paid by the Company to its Chief
Executive Officer and each of the four remaining most highly compensated
executive officers for the fiscal year ended December 31, 1994.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------ -------------
SECURITIES ALL OTHER
NAME AND PRINCIPAL UNDERLYING COMPENSATION
POSITION YEAR SALARY BONUS OPTIONS (1)
- ------------------ ------- --------- -------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Jeffrey Hanft, 1994 $417,000 $ 0 300,000 $2,000
CEO, Chairman 1993 361,000 0 68,000 2,000
of the Board 1992 282,000 120,000 75,000 2,000
Robert D. Rubin, 1994 263,000 0 240,000 2,000
President 1993 233,000 0 54,000 2,000
1992 179,000 80,000 60,000 1,000
Richard F. Militello, 1994 208,000 0 180,000 1,000
Chief Operating 1993 176,000 0 42,000 1,000
Officer 1992 135,000 57,000 83,000 1,000
Bruce W. Renard, 1994 150,000 0 20,000 2,000
V.P. Regulatory 1993 164,000 25,000 15,000 2,000
Affairs, General 1992 150,000 43,000 0 0
Counsel
Lawrence T. Ellman, 1994(2) 105,000 10,000 45,000 0
President, Pay
Telephone
Division
<FN>
____________________
(1) The amounts disclosed in this column include the Company's contributions
on behalf of the named executive officer to the Company's 401(k)
retirement plan in amounts equal to 25% of the executive officer's
yearly participation in the plan.
(2) Mr. Ellman joined the Company in June 1994.
</FN>
</TABLE>
10
<PAGE>
The following table sets forth certain information with respect to stock
options granted during the year ended December 31, 1994 to the executive
officers named in the Summary Compensation Table:
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
--------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE OF
ASSUMED ANNUAL RATES OF STOCK
NUMBER OF % OF TOTAL PRICE APPRECIATION FOR OPTION
SECURITIES OPTIONS GRANTED TERM(2)
UNDERLYING TO EMPLOYEES IN EXERCISE OR BASE EXPIRATION -----------------------------
OPTIONS(1) FISCAL YEAR PRICE ($/SHARE) DATE 5% 10%
---------- --------------- ---------------- ---------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey Hanft 250,000 22.67% $8.50(3) 2/16/99 $588,000 $1,301,000
50,000(4) 4.53 5.13 10/13/99 71,000 157,000
Robert D. Rubin 200,000 18.13 8.50(3) 2/16/99 470,000 1,041,000
40,000(4) 3.63 5.13 10/13/99 57,000 126,000
Richard F. Militello 150,000 13.60 8.50(3) 2/16/99 353,000 780,000
30,000(4) 2.72 5.13 10/13/99 43,000 94,000
Bruce W. Renard 20,000 1.81 5.13 10/13/99 28,000 63,000
Lawrence T. Ellman 45,000 4.08 5.69 7/11/99 71,000 157,000
<FN>
_____________________
(1) Options were granted for a term of five years, subject to earlier
termination in certain events related to termination of employment.
Options become exercisable in three equal annual installments.
(2) These amounts represent assumed rates of appreciation which may not
necessarily be achieved. The actual gains, if any, are dependent on
the market value of the Company's Common Stock at a future date as well as
the option holder's continued employment throughout the vesting period.
Appreciation reported is net of exercise price.
(3) In the event of a change in control of the Company, such exercise price
will be adjusted to $5.38.
(4) Vesting of options is contingent upon the Company meeting certain
performance levels during 1995.
</FN>
</TABLE>
11
<PAGE>
The following table sets forth certain information as to each
exercise of stock options during the year ended December 31, 1994 by the
executive officers named in the Summary Compensation Table and the fiscal
year end value of unexercised options:
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS OPTIONS AT FISCAL YEAR
AT FISCAL YEAR END END
SHARES ------------------- ----------------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(S) REALIZED UNEXERCISABLE UNEXERCISABLE
- ---------------------- ----------- -------- ------------------- ----------------------
<S> <C> <C> <C> <C>
Jeffrey Hanft 0 $ 0 261,667/180,833 $ 0/0
Robert D. Rubin 0 0 229,333/124,667 0/0
Richard F. Militello 0 0 173,000/94,000 0/0
Bruce W. Renard 0 0 99,167/18,333 4,200/0
Lawrence T. Ellman 0 0 15,000/30,000 0/0
</TABLE>
EMPLOYMENT AGREEMENTS
The Company is a party to an employment agreement with Jeffrey Hanft,
the Company's Chairman and Chief Executive Officer, commencing January 1,
1994 and ending on December 31, 1998. The agreement provides for automatic
one year extensions thereafter unless either party gives notice that it is
not to be extended. The employment agreement provides for payment of a
base salary currently fixed at the annual rate of $500,000 from January 1,
1995 to December 31, 1995. Commencing January 1, 1996 and every January
1st thereafter during the term of the agreement, the base salary will
increase by an amount equal to the previous year's base salary multiplied
by 10%. The base salary may also be increased annually by merit increases
or at any time at the discretion of the Board of Directors. Under certain
circumstances (e.g., if the Company's income is not at certain levels), no
increase may be granted. Mr. Hanft may also receive an incentive bonus for
each of the Company's fiscal years during the term of his agreement. The
incentive bonus shall be equal to 3% of the Company's pre-tax consolidated
net income but shall not exceed 60% of Mr. Hanft's base salary for such
fiscal year. Mr. Hanft is also entitled under the agreement to other
employee benefits. Further, if the Company terminates Mr. Hanft's
employment agreement without cause or Mr. Hanft terminates the agreement
for certain defined reasons, the Company will pay Mr. Hanft (a) his base
salary through the termination date and (b) as severance pay a lump sum
amount equal to 200% of the sum of (i) the annual base salary at the
highest rate in effect during the 12 months immediately preceding
termination and (ii) the average of the three annual bonus payments paid
with respect to the preceding three years under the agreement. Upon
termination due to a change in control within one year after the change in
control, Mr. Hanft shall receive (a) his base salary through the
termination date, (b) all other benefits provided in the agreement and (c)
severance pay equal to 299.99% of the average taxable compensation of Mr.
Hanft
12
<PAGE>
for the five taxable years prior to such termination. Upon termination of
his employment for disability, Mr. Hanft is entitled to 100% of his base
salary then in effect for one year and 50% of his base salary for two
additional years.
The Company is a party to an employment agreement with Robert D. Rubin,
the Company's President. The employment agreement is for a four year term
commencing January 1, 1994 and ending December 31, 1997. Mr. Rubin's base
salary for 1994 and 1995 under such agreement is $315,000. The agreement
provides for automatic one year extensions thereafter unless either party
gives notice that it is not to be extended. Mr. Rubin's employment
agreement is otherwise similar to Mr. Hanft's, except that Mr. Rubin's
incentive bonus is 1.85% of the Company's pre-tax consolidated net income.
The Company is a party to an employment agreement with Richard F.
Militello, the Company's Chief Operating Officer. The employment agreement
is for a three year term commencing January 1, 1994 and ending December 31,
1996. Mr. Militello's base salary for 1994 and 1995 under such agreement
is $250,000. The agreement provides for automatic one year extensions
thereafter unless either party gives notice that it is not to be extended.
Mr. Militello's employment agreement is otherwise similar to those of
Messrs. Hanft and Rubin, except that Mr. Militello's incentive bonus is
1.5% of the Company's pre-tax consolidated net income.
As a result of losses incurred by the Company in the first quarter of
1994, effective June 1, 1994 Messrs. Hanft, Rubin and Militello voluntarily
reduced their salaries by 50%. On October 1, 1994, their salaries were
reinstated to their contract amounts.
The Company is a party to an employment agreement with Bruce W. Renard,
the Company's Vice President-Regulatory Affairs/General Counsel. The
employment agreement is for a three year term commencing on January 1, 1995
and ending on December 31, 1997. The agreement provides for payment of a
base salary initially fixed at the annual rate of $172,500 with an annual
increase of 10%, provided the Company has met certain income targets. The
agreement provides for automatic one year extensions thereafter unless
either party gives notice that it is not to be extended. Mr. Renard's
employment agreement also provides for an incentive bonus in the sole
discretion of the Board of Directors and that upon termination due to a
change in control, Mr. Renard shall receive severance pay equal to 100% of
his highest annual base salary.
The Company is a party to an employment agreement with Lawrence T.
Ellman, the President of the Company's Pay Telephone Division. The
employment agreement is for a three year term commencing June 22, 1994 and
ending June 22, 1997. The agreement provides for a base salary at the
annual rate of $150,000, increasing 10% each year with the approval of the
Board of Directors, and a minimum annual bonus of $25,000. Mr. Ellman's
employment agreement is otherwise similar to those of Messrs. Hanft, Rubin
and Militello, except that the Company shall have no obligation to pay
benefits upon a termination for cause, disability or death, and no
additional benefits accrue to Mr. Ellman upon a change in control.
Each employment agreement above restricts the employee from competing
with the Company for one year in the areas in which the Company then
operates following termination of the agreement. Generally,
13
<PAGE>
except as set forth above, the Company may terminate an employment agreement
without further payment if the employee materially breaches his or her
obligations and duties under the agreement or is convicted of a felony under
certain circumstances or violates the non-competition provision contained in
the employment agreement or upon death of the employee.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors of the Company
(the "Committee") is composed of two non-employee directors. The Committee
is responsible for reviewing and approving the compensation paid to
executive officers of the Company, including salaries, bonuses and stock
options. Following review and approval by the Committee, actions
pertaining to the executive compensation are reported to the full Board of
Directors.
Executive compensation is set at levels which are sufficiently
competitive with companies of similar size and complexity to permit the
Company to attract and retain the best possible individuals. The
compensation plans are structured to provide incentives for executive
officer performance that promote continuing improvement in the Company's
financial results. The plans are also designed to align the interests of
the Company's executives and its shareholders by providing for payment of a
significant portion of incentive compensation in the form of options to
purchase the Company's Common Stock. Moreover, each executive officer's
compensation is based upon both individual performance and Company
performance. Consideration is given to the Company's income, cash flow,
growth, return on capital employed and other factors. The contributions of
each executive officer to such items are evaluated in determining
adjustments to salaries and whether incentive awards will be made. Certain
executive officers have entered into employment contracts with the Company
which take these factors into consideration.
As may be seen on the Summary Compensation Table included on page 10,
the compensation of executive officers consists of three principal parts,
each of which is reviewed by the Committee. Annual salaries shown in the
Table represent the fixed portion of compensation for the year. Changes in
salary depend upon Company as well as individual performance. The Bonus
shown in the Table paid to executive officers depends on the financial
performance of the Company. The final component of compensation arises
from the Company's grant of stock options to executive officers. The
Committee sets the number of options to be granted based upon the
recipient's performance. All options under the plan are granted at fair
market value, and, therefore, any value which ultimately accrues to the
executive officer is based entirely on the Company's performance, as
perceived by investors who establish the price for the Company's stock.
The compensation of Jeffrey Hanft, Chief Executive Officer and
Chairman, is determined in accordance with the philosophy set forth above.
The Committee believes Mr. Hanft's leadership skills and business acumen
favorably affect all key aspects of the Company's business including not
only the development of the Company's long-term strategic goals but also
oversight of day-to-day operations. This belief is based on a subjective
analysis of Mr. Hanft's effectiveness and recognition of his achievements
to date. During 1994, under Mr. Hanft's direction, the Company developed a
new corporate strategy to restructure and reposition the corporation. The
Company is now focusing on its core pay telephone business
14
<PAGE>
and the sale of its non-strategic businesses. In addition, Mr. Hanft
initiated and continues to lead a broad re-evaluation and refinement of the
Company' operating and financial policies and procedures. In 1994, Mr. Hanft
received a base salary of $417,000 and no bonus. Under the terms of Mr.
Hanft's employment agreement, he was entitled to receive a base salary of
$500,000. However, as a result of losses incurred by the Company during
the first quarter of 1994, Mr. Hanft voluntarily reduced his salary by 50%
for the period from June 1, 1994 to October 1, 1994. Mr. Hanft also
received options in 1994 to purchase 300,000 shares of the Company's Common
Stock at the fair market value determined on the date such options were
granted. Any value which ultimately accrues to Mr. Hanft based upon this
grant of options will be based entirely upon the Company's performance as
perceived by investors.
Rules of the Securities and Exchange Commission require the inclusion
in this Proxy Statement of a graph of the cumulative total return to
shareholders during the previous 5 years in comparison with a broad market
index (the NASDAQ Total Return Index - US Companies in the case of the
Company) and a peer group index (the NASDAQ Total Return Industry
Index - Telecommunications in the case of the Company). The Company's record
in this area is a factor of management's performance considered by the
Compensation Committee.
The Compensation Committee
Respectfully Submitted,
Jody Frank
Robert E. Lund
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
See "Directors' Compensation and Consulting Arrangements" and "Certain
Relationships and Related Transactions."
15
<PAGE>
PERFORMANCE GRAPH
The following graph shows a comparison of the five year cumulative
return (assuming reinvestment of any dividends), among the Company, the
NASDAQ Total Return Index (US Companies) ("NASDAQ-US"), and a peer group
selected by the Company, the NASDAQ Total Return Industry Index -
Telecommunications ("Telecom Group"). This graph and table assume an
investment of $100 in the Common Stock and each index on December 31, 1989.
Note: The stock price performance shown on the graph below is not
necessarily indicative of future price performance.
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
NASDAQ - US 100 85 136 159 182 178
Telecom Group 100 67 93 114 176 146
Company 100 67 163 188 244 76
16
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since January 1, 1994, the Company has engaged in the following
transactions with directors and/or executive officers of the Company,
shareholders listed in the security ownership table on page 6, or with
businesses with which they are associated:
1. The Company prepaid a deposit on a real property lease for its
Russian joint venture, Artel, to Robin Enterprises, Inc. ("Robin") in the
amount of $675,000. Such lease was canceled in June 1994 and the prepaid
deposit returned to the Company. Robin is a corporation which owns an
approximately 32,000 square foot building in Moscow. Jeffrey Hanft, Jody
Frank, Bernard M. Frank, Robert D. Rubin, Richard F. Militello and Richard
Whitman, all of whom are directors or former directors of the Company, are
shareholders of Robin.
2. On March 31, 1994, the Company sold certain of its telephone
calling center assets to Global Link Teleco Corporation ("Global Link") for
a total of $2.5 million. In connection with the transactions, Global Link
delivered to the Company 10.0% of the issued and outstanding common stock
of Global Link and granted the Company the right to designate two members
of Global Link's Board of Directors. In February 1995, after obtaining a
fairness opinion indicating the proposed sale of the assets for the agreed
upon consideration was fair to the Company from a financial point of view
and after the transaction was approved by the disinterested members of the
Company's Board of Directors, the Company sold substantially all of the
assets of its prepaid calling card business to Global Link for
approximately $6.3 million. Upon the sale, the Company maintained the
right to designate one member of Global Link's Board of Directors. The
Company received $1.0 million in cash, a $5.3 million promissory note due
February 1998, bearing interest at 8.5%, payable quarterly, and shares of
common stock of Global Link. As a result of the February 1995 transaction,
and because of a drafting error discovered in May 1995 that did not reflect
the intentions of the parties, the Company's interest in the outstanding
common stock of Global Link was 28.8% instead of the intended 19.99%. To
correct this error, the Company reduced its share ownership to the intended
19.99% level. Jeffrey Hanft and Jody Frank, directors of the Company, are
directors, and Jody Frank is a shareholder, of Global Link. Mr. Bernard M.
Frank, a former director of the Company, is also a director and shareholder
of Global Link.
3. On November 24, 1994, the Company entered into a Settlement
Agreement with Richard Whitman, a director of the Company, to resolve
claims arising under an indemnity provision in connection with the November
1, 1991 merger of Ram Telephone and Communications ("Ram") into the
Company. Pursuant to the Settlement Agreement, Mr. Whitman executed a
promissory note in favor of the Company, agreeing to pay $237,000, plus
simple interest of eight percent (8%) per annum, due and payable in full on
December 31, 1997. Mr. Whitman also executed a Security Agreement,
providing a pledge of up to 150,000 shares of the Company's Common Stock to
collateralize payment of the promissory note. Mr. Whitman was a
shareholder of Ram.
4. Information concerning indebtedness of directors and/or executive
officers to the Company since January 1, 1994 is as follows: (a) largest
aggregate indebtedness outstanding: Jeffrey Hanft ($2,385,000); Robert D.
Rubin ($735,000); Richard F. Militello ($907,000); Jody Frank ($309,000);
and
17
<PAGE>
Ronald Gelber ($47,000); (b) currently outstanding indebtedness: Jeffrey
Hanft ($1,712,000); Robert D. Rubin ($574,000); Richard F. Militello
($734,000); Jody Frank ($309,000); and Ronald Gelber ($47,000).
Since January 1, 1994, the Company has loaned (the "Company Loans")
certain funds to Jeffrey Hanft, Robert D. Rubin, Richard F. Militello, Jody
Frank and Ronald Gelber (the "Borrowers") for the reasons described below.
Each of the Company Loans is evidenced by a promissory note. Each such
Company Loan is due in full on March 28, 1996, and bears interest at the
prime rate of interest set by the Company's senior lender. Included in the
currently outstanding loans for these transactions are the following: Mr.
Hanft $968,000; Mr. Rubin $435,000; Mr. Militello $501,000; Mr. Frank
$239,000; and Mr. Gelber $47,000.
Each of the Company Loans was made following approval by the members of
the Board of Directors who were not parties to the transactions as a means
to provide the Borrowers with a vehicle to refinance certain commercial
bank indebtedness they had incurred to exercise Company stock options and
pay related income taxes. The Borrowers exercised the stock options in
December 1993 to purchase the Company's Common Stock for purposes of
increasing the Company's shareholders' equity without accessing the
external capital markets. The Borrowers personally borrowed the funds to
exercise the options from a commercial bank and pledged the Company's
Common Stock issued upon exercise as collateral for the bank loans ("Bank
Loans"). This equity increase in turn was a significant factor in
permitting the Company to increase its credit facility from $60.0 million
to $125.0 million in February 1994.
Commencing in May, 1994, as the market price of the stock declined, the
bank on several occasions required the Borrowers to pay down the Bank Loans
or provide additional collateral. The Borrowers approached the
disinterested members of the Company's Board of Directors to seek the
Company's assistance in refinancing a portion of their Bank Loans. The
Company then advanced the Company Loans upon the repayment terms noted
above.
Mr. Hanft, Mr. Militello and Mr. Frank also borrowed $535,000, $128,000
and $70,000, respectively, from the Company in connection with the payment
of personal income taxes related to the phantom gain incurred upon the
December 1993 exercise of the stock options mentioned above. The loans are
due in 1995 and bear interest at a rate equal to the average annual
borrowing rate of the Company's senior debt (for the fiscal year ending on
or immediately preceding the date interest on the outstanding principal is
payable).
In an unrelated transaction, in lieu of receiving payment of their
earned 1993 bonus, Mr. Hanft, Mr. Rubin and Mr. Militello agreed to accept
loans from the Company which bear interest at a rate equal to the average
annual borrowing rate of the Company's senior debt (for the fiscal year
ending on or immediately preceding the date interest on the outstanding
principal balance is payable) which loans are payable within five years of
the date of the loan. Included in the currently outstanding loans for this
transaction are the following: Mr. Hanft $210,000; Mr. Rubin $140,000; and
Mr. Militello $105,000.
5. On July 19, 1995, UBS Partners purchased 150,000 shares of the
Preferred Stock for gross proceeds of $15.0 million. See "OUTSTANDING
STOCK AND VOTING RIGHTS." Charles J. Delaney, a director of the Company,
is the President of UBS Capital, an affiliate of UBS Partners. Jeffrey J.
Keenan,
18
<PAGE>
who is expected to be elected a director of the Company by UBS Partners at
or about the time of the Annual Meeting, is a director and vice president of
UBS Partners. In connection with the Preferred Stock Investment, the Company
has agreed to reimburse UBS Partners for its out of pocket expenses up to a
maximum amount of $350,000.
6. In connection with the resignations of former directors Bernard M.
Frank and Ronald Gelber, in February 1995 and July 1995 respectively, the
Company issued to each former director options to acquire 32,500 shares of
Common Stock. The exercise prices of the options, based on the market
price of the Company's Common Stock on the date of the grants, are $5.06
with regard to Mr. Frank's options and $4.16 with regard to Mr. Gelber's
options.
7. In February 1994, the Company amended a credit facility agreement
with Creditanstalt- Bankverein and certain other lenders in order to
provide the Company with a revolving line of credit of $125 million, and
issued to Creditanstalt American Corporation (a subsidiary of
Creditanstalt-Bankverein) 250,000 Series D warrants to acquire Common Stock
or Series B Preferred Stock of the Company, with an exercise price of $9.00
per share. At the same time, Creditanstalt American Corporation, as the
assignee of Creditanstalt- Bankverein, exercised 150,000 Series A warrants
to acquire 150,000 shares of Common Stock at an exercise price of $3.17 per
share. In March 1995, the Company amended its credit facility agreement
with Creditanstalt- Bankverein and certain other lenders by reducing the
credit facility to $100 million. In May 1995, the Company agreed to
decrease to $5.25 the exercise price of a portion of the Series D warrants
in return for the cancellation of a demand registration right held by
Creditanstalt American Corporation. In July 1995, the Company repaid the
approximately $95.5 million of indebtedness under the credit facility,
amended the credit facility to reduce the line of credit to $40 million,
and paid Creditanstalt-Bankverein a loan origination fee of $200,000.
Between January 1, 1994 and June 30, 1995, the Company paid approximately
$5.3 million in interest and fees to Creditanstalt-Bankverein as agent and
as a lender in connection with the Company's credit facilities.
In May 1995, in order to facilitate a $2.5 million loan to PTC
Cellular, Inc., a wholly-owned subsidiary of the Company, the Company
entered into an exchange agreement under which it granted to Creditanstalt
Corporate Finance, Inc. (an affiliate of Creditanstalt American
Corporation) the right to exchange indebtedness under the loan for shares
of Common Stock of the Company, with an exchange ratio based on the then
current market price of the Common Stock. Concurrently with the exchange
agreement, PTC Cellular, Inc. issued warrants to acquire 263,916 shares of
Class A or Class B Common Stock of PTC Cellular, Inc. to Creditanstalt
Corporate Finance, Inc, at an exercise price of $.01 per share. The
warrants expire on May 3, 2005.
CERTAIN INFORMATION AS TO INSURANCE
No shareholder action is required with respect to the following
information which is included to fulfill the requirements of Section 726 of
the Business Corporation Law of the State of New York. Effective December
31, 1994, the Company renewed an insurance policy providing for
reimbursement, with certain exclusions and deductions, to (i) the Company
for payments it makes to indemnify directors and officers of
19
<PAGE>
the Company and its subsidiaries, and (ii) directors and officers for losses,
costs and expenses incurred by them in connection with their acts in those
capacities for which they are not indemnified by the Company. The insurer is
Reliance Insurance Company. The cost of this insurance is $100,000 for a one
year term.
RELATIONSHIP WITH THE COMPANY'S AUDITORS
The Company is not required to obtain shareholder approval or
ratification of its selection of its auditors under the laws of the State
of New York, and the Audit Committee and the Board of Directors reserve the
right to make any change in auditors at any time, and without shareholder
approval, which the Board of Directors and Audit Committee deem advisable
or necessary. Representatives of Price Waterhouse LLP, the Company's
current auditors, are expected to be present at the Annual Meeting and will
be afforded the opportunity to make a statement, if they so desire, and
will be available to respond to appropriate questions from shareholders.
OTHER MATTERS
Management is not aware of any other business that may come before the
Annual Meeting. However, if additional matters properly come before the
Annual Meeting, proxies will be voted at the discretion of the proxy-
holders.
SOLICITATION PROCEDURES
The cost of soliciting proxies will be borne by the Company. In
addition, the Company will reimburse brokers or other persons holding stock
in their names or in the names of their nominees for charges and expenses
in forwarding proxies and proxy material to the beneficial owners.
Solicitations may also be made by employees of the Company, without
additional compensation, by use of the mails, telephone, telegraph or
otherwise. The Company may retain Corporate Investor Communications, Inc.,
to assist in the solicitation of proxies at a cost of approximately $3,000
(plus reasonable out-of-pocket expenses).
SHAREHOLDER PROPOSALS
Under the regulations applicable to the solicitation of proxies,
shareholder proposals intended to be presented at the 1996 Annual Meeting of
Shareholders of the Company must be received by the Company not later than
March 26, 1996. However, because the Board of Directors anticipates that
the 1996 Annual Meeting of Shareholders will take place on or about May 24,
1996 and the Proxy Statement related to that meeting will be sent to
shareholders on or about April 24, 1996, shareholder proposals intended to
be presented at the 1996 Annual Meeting of Shareholders must be received by
the Company a reasonable time prior to the date of the Proxy Statement.
The Company recommends that such shareholder proposals be received by the
Company not later than December 26, 1995, at its principal executive
offices, 2300 N.W. 89th
20
<PAGE>
Place, Miami, Florida 33172, Attention: Robert D. Rubin, President, for
inclusion in the Proxy Statement relating to the 1996 Annual Meeting of
Shareholders.
By Order of the Board of Directors
/s/ FRANCIS J. HARKINS
Francis J. Harkins, Secretary
Miami, Florida
July 25, 1995
21
<PAGE>
PEOPLES TELEPHONE COMPANY, INC.
ANNUAL MEETING OF SHAREHOLDERS
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Jeffrey Hanft, Robert D. Rubin, or
either of them, with full power of substitution, the proxies of the
undersigned, to vote all shares of Common Stock or Series C Cumulative
Convertible Preferred Stock of Peoples Telephone Company, Inc. which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Shareholders to be held on August 25, 1995, at 10:00 a.m., at
the Radisson Mart Plaza Hotel at 711 N.W. 72nd Avenue, Miami, Florida
33126, and at any adjournments thereof, as to the matters specified on
the reverse side, all as more fully described in the accompanying proxy
statement. The board of directors currently knows of no other matters
to be presented at the Annual Meeting. Proposal 1 has been proposed for
consideration by Peoples Telephone Company, Inc. THE SHARES REPRESENTED
BY THE PROXY WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER. IF NO
DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED "FOR" THE NOMINEES LISTED
IN PROPOSAL 1.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED
IN PROPOSAL 1.
(Continued on reverse side)
<PAGE>
1. To elect as directors of People's Telephone Company, Inc. the nominees
named below:
FOR [ ] WITHHELD [ ]
Nominees: Jeffrey Hanft, Jody Frank, Robert E. Lund and Robert D. Rubin
To withhold authority to vote for any individual nominee, write that
nominee's name in the space provided below:
--------------------------------------------------------------------
2. In their discretion, to transact and vote upon all other business as may
properly come before the meeting and all adjournments of the meeting.
Please mark, date and sign as your name appears
herein and return in the enclosed envelope.
If acting as executor, administrator, trustee,
guardian, etc., you should so indicate when
signing. If the signatory is a corporation, a
duly authorized officer should sign for the
corporation. If share are held jointly, each
shareholder named should sign.
Date: -----------------------, 1995
------------------------------------
Signature
------------------------------------
Signature (if held jointly)
PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES
