FORM 10-Q/A No. 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended: June 30, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d)
Of the Securities Exchange Act of 1934
Commission File Number: 0-16479
PEOPLES TELEPHONE COMPANY, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 13-2626435
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) I.D. No.)
2300 NORTHWEST 89TH PLACE, MIAMI, FLORIDA 33172
(Address of principal executive offices) (Zip Code)
(305) 593-9667
(Registrant's telephone number, including area code)
<PAGE>
Part I. Item 6 of the Form 10-Q of Peoples Telephone Company, Inc. (the
"Company") for the quarter ended June 30,1 997 is amended in its entirety to
read as follows:
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibits Description
10.1 Letter Agreements dated February 25, 1997 and March 17, 1997 between the
Company and David Arvizu
10.2 Letter Agreement dated July 15, 1997 between the Company and William A.
Baum
27 Financial Data Schedule
(b) Reports on Form 8-K:
(i) A current report on Form 8-K dated July 10, 1997 related to Item 5 - Other
Information.
(ii) A current report on Form 8-K dated July 17, 1997 related to Item 5 - Other
Information.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its gehalf by the
undersigned thereunto duly authorized.
PEOPLES TELEPHONE COMPANY, INC.
Registrant
Date: August 29, 1997 /s/ William A. Baum
-------------------------------
William A. Baum
Chief Financial Officer
February 25, 1997
PERSONAL AND CONFIDENTIAL
VIA FAX
303/706-1926
Mr. David A. Arvizu
8426 Green Island Circle
Littleton, CO 80134
Dear Dave:
We are pleased to extend this offer of employment to you as Senior Vice
President-Marketing & Sales for local and regional markets with Peoples
Telephone Company, Inc., ("Peoples"). The terms of your employment will be as
follows:
1. Base Salary: You will receive a base salary of $140,000 per annum, which will
be paid bi-monthly and reviewed annually.
2. Bonus: You will be eligible for an annual bonus of 50% of base salary for
on-target performance. A percentage of this will be based on overall company
performance and a percentage based on achievement of personal goals, to be
mutually agreed in advance by the two of us. At that time, we will also
establish criteria for over achievement of this bonus level. The bonus will be
paid quarterly and trued-up at year-end.
3.Equity Plan: As a company executive, you will be eligible for participation in
the company's Executive Stock Option Plan. Your anticipation in the plan will be
at the rate of 80,000 options, vesting over 5 years, according to the following
traunches; fair market value (at time of signing of this offer), $4.25, $5.25,
$6.25, and $7.25, in equal traunches of 16,000 shares each.
4.Savings Plan: You will be eligible to participate in the Company's 401(k)
savings plan, the details of which are enclosed, beginning January 1, 1998.
5.Vacation: In addition to company holidays, you will be eligible for three
weeks' annual vacation.
<PAGE>
Mr. David A. Arvizu
February 25, 1997
Page 2
6. Relocation: In lieu of a company relocation program, we will provide a
sign-on bonus of $45,000 upon joining Peoples Telephone to apply toward
relocating yourself and your family from Denver to Miami. Of course, we would be
happy to provide any advice to help smooth the transition.
7. Benefit Plans: You will be eligible to participate in the Company's medical,
disability, and life insurance plans, the details of which are enclosed.
8.Termination: Should your employment be terminated without cause ( cause' to be
Peoples' standard definition of cause), you will be eligible for a termination
payment equal to a half a year's base salary.
Dave, pursuant to our discussions, Neil, Alan and I are convinced that you will
be effective on our team and that your leadership will significantly enhance our
results. Moreover, we believe that you are our kind of person and that,
together, we can build the kind of company with which we will be proud to be
affiliated.
We hope that you will accept our offer of employment (contingent upon your
successful completion of the drug test) by signing this letter and returning it
to my attention by March 3. This offer is with the understanding that you devote
your full time to the business of Peoples. We look forward to you joining our
team on March 17.
Sincerely,
/s/ E. Craig Sanders
E. Craig Sanders
I accept this offer of employment as set forth in this letter.
/s/ David A. Arvizu February 25, 1997
David A. Arvizu
<PAGE>
LETTER AGREEMENT
March 17, 1997
Mr. David A. Arvizu
Peoples Telephone Company, Inc.
2300 N.W. 89th Place
Miami, Florida 33172
Dear Mr. Arvizu:
This is to confirm our agreement as further set forth herein that:
1. Peoples Telephone Company, Inc. (the "Company") relies upon you and your
expertise and wishes to continue to take advantage of and benefit from such
experience and, therefore, wishes to enter into this Letter Agreement and you
wish to enter into this Letter Agreement.
2. The Company and you agree that in case of a "Change in Control" (as
defined in Exhibit A attached hereto), if you are (a) terminated without cause
by the Company or any successor thereof, for a period beginning three (3) months
before and ending twelve (12) months after the Change of Control, (b) are asked
to assume lesser duties and/or title or duties inconsistent with your current
position without your consent or (c) the Company's corporate headquarters is
moved or you are required to be based at any office or location other than that
of the Company's present corporate headquarters which change of location would
require you to commute more than fifty (50) miles in excess of your commute
prior to such change ("Termination Date"), in addition to any other benefits due
you from the Company and without affecting any such other compensation or
benefits owed to you, the Company shall pay you within five (5) days of such
Termination Date as severance pay (i) a lump sum amount equal to fifty percent
(50%) of your annual base salary at the highest rate in effect during the twelve
(12) months immediately preceding the Termination Date plus (ii) any bonus you
may be eligible for under any Company bonus plan (such amount to be paid as if
any and all goals and conditions to such bonus payment had been met) plus (iii)
all options granted to you by the Company shall vest if not already vested (and
shall not be subject to any thirty (30) day exercise rule unless exemption from
such rule shall be prohibited by the plan under which such options were
granted).
<PAGE>
Mr. David A. Arvizu
Peoples Telephone Company, Inc.
March 17, 1997
Page 2
3. This Letter Agreement shall be binding upon the Company and any
successors and assigns thereof.
4. Termination for cause for purposes of this letter, and the Company's
offer letter of February 25, 1997 previously delivered to you, shall be defined
as: (1) conviction of a felony; (2) engages in one or more acts of fraud or
moral turpitude; (3) misappropriates Company assets; (4) engages in misconduct
injurious to the Company; and (5) if the Board determines you have materially
and willfully failed to perform your duties.
Please sign in the space provided below and return this form to me.
Very truly yours,
PEOPLES TELEPHONE COMPANY, INC.
By: /s/ E. Craig Sanders
E. Craig Sanders
President/Chief Executive Officer
Agreed and Accepted
this 17th day of March, 1997:
/s/ David A. Arvizu
David A. Arvizu
Senior Vice President - Sales and Marketing
<PAGE>
EXHIBIT A
For purposes of this Agreement, a "Change in Control" means:
(1) the acquisition of beneficial ownership, direct or indirect, of
equity securities of the Company by any person (as that term is defined in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) which, when combined with all other securities of the
Company beneficially owned, directly or indirectly by that person, equals
or exceeds 50% of (i) either the then outstanding shares of common stock of
the Company (the "Outstanding Company Common Stock") or (ii) the combined
voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
by the Company or any of its subsidiaries, (ii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Company or any of its subsidiaries or (iii) any acquisition by any
corporation with respect to which, following such acquisition, more than
75% of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such acquisition
in substantially the same proportions as their ownership, immediately prior
to such acquisition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be; or
(2) individuals who, as of the date hereof, constitute the Board of
Directors (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board of Directors; provided, however, that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding for this purpose any such
individual whose initial assumption of office occurs as a result of either
an actual or threatened solicitation to which Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act applies or other actual or threatened
solicitation of proxies or consents; or
(3) approval by the shareholders of the Company of a reorganization,
merger or consolidation, in each case, with respect to which all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation do not, following such
reorganization, merger or consolidation, beneficially own, directly or
indirectly, more than 75% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such reorganization, merger
<PAGE>
or consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation of the
Outstanding Company Common Stock and Outstanding Company Voting Securities,
as the case may be; or
(4) approval by the shareholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other
disposition of all or substantially all of the assets of the Company, other
than to a corporation, with respect to which following such sale or other
disposition, more than 75% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities immediately prior to
such sale or other disposition in substantially the same proportion as
their ownership, immediately prior to such sale or other disposition, of
the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be.
The term "the sale or disposition by the Company of all or substantially
all of the assets of the Company" shall mean a sale or other disposition
transaction or series of related transactions involving assets of the Company or
of any direct or indirect subsidiary of the Company (including the stock of any
direct or indirect subsidiary of the Company) in which the value of the assets
or stock being sold or otherwise disposed of (as measured by the purchase price
being paid therefor or by such other method as the Board of Directors determines
is appropriate in a case where there is no readily ascertainable purchase price)
constitutes more than two-thirds of the fair market value of the Company (as
hereinafter defined). The "fair market value of the Company" shall be the
aggregate market value of the then outstanding Company Common Stock (on a fully
diluted basis) plus the aggregated market value of Company's other outstanding
equity securities. The aggregate market value of the shares of Outstanding
Company Common Stock shall be determined by multiplying the number of shares of
Outstanding Company Common Stock (on a fully diluted basis) outstanding on the
date of the execution and delivery of a definitive agreement with respect to the
transaction or series of related transactions (the "Transaction Date") by the
average closing price of the shares of Outstanding Company Common Stock for the
ten trading days immediately preceding the Transaction Date. The aggregate
market value of any other equity securities of the Company shall be determined
in a manner similar to that prescribed in the immediately preceding sentence for
determining the aggregate market value of the shares of Outstanding Company
Common Stock or by such other method as the Board of Directors shall determine
is appropriate.
Exhibit 10.2
July 15, 1997
PERSONAL AND CONFIDENTIAL
Mr. William A. Baum
8241 SW 161st Street
Miami, FL 33157
Dear Bill:
This letter confirms the terms of your employment as Senior Vice President-Chief
Financial Officer of Peoples Telephone Company, Inc. ("Peoples" or the
"Company") and supersedes the letter dated July 7, 1997. Your employment will
commence on July 17, 1997, although it is understood that you will not be
present in the office on a full time basis until July 28, 1997. The terms of
your employment will be as follows:
1. Base Salary: Commencing July 28, 1997, you will receive a base salary of
$165,000.00 per annum, which will be paid bi-monthly and reviewed annually.
2. Bonus: You will be eligible for an annual bonus of up to 65% of base salary
for on-target performance. A percentage of this will be based on overall
performance by Peoples and a percentage based on achievement of personal goals,
to be mutually agreed upon in advance by you and the President of Peoples.
Peoples will guarantee 1997's bonus on a prorated basis. You will also receive a
sign-on bonus of $20,000.00.
3. Equity Plan: As a Company executive, you will be eligible for participation
in People's Stock Option Plan. Your participation in the plan will be at the
rate of 160,000 options, according to the following tranches: 26,000 shares at
fair market value on July 17, 1997; 26,000 shares at $4.25; 26,000 shares at
$5.25; 26,000 shares at $6.25; and 56,000 shares at $7.25. These will vest
according to the following schedule: 52,000 shares on December 31, 1998; 52,000
shares on December 31, 1999; and 56,000 shares on December 31, 2000.
4. Savings Plan: You will be eligible to participate in People's 401(k) savings
plan, the details of which have been delivered to you, beginning January 1,
1998.
5. Vacation: In addition to Company holidays, you will be eligible for four
weeks' annual vacation. Vacation for 1997 will be prorated.
6. Benefit Plans: You will be eligible to participate in People's medical,
disability and life insurance plans, the details of which have been provided to
you.
<PAGE>
Mr. William A. Baum
July 15, 1997
Page 2
7. Termination: Your employment may be terminated as follows:
(a) Your employment shall terminate upon your death.
(b) The Company has the right to terminate your employment if, by
reason of Disability, you have been unable to perform your duties for a
period of 90 consecutive days or 120 days in any 180 day period.
"Disability" means physical or mental disability, which disability is
expected to be of long or indefinite duration and prevents you from
performing your duties. All determinations of Disability made by the
Company pursuant to the Company's Long Term Disability Insurance Policy, if
any, shall be determinative of your Disability under this letter. If the
Company does not have a Long Term Disability Insurance Policy, Disability
shall be determined by the Compensation Committee upon the basis of the
evidence the Compensation Committee deems appropriate.
(c) You may terminate your employment if your health (either physical
or mental) becomes impaired to an extent that makes the continued
performance of your duties materially harmful to your life or physical or
mental health.
(d) The Company may terminate your employment under this Agreement for
Cause at any time. The Company shall have "Cause" if you (i) are convicted
of a felony; (ii) willfully engage in one or more acts involving fraud or
moral turpitude; (iii)(x) willfully misappropriate Company assets or (y)
willfully engage in gross misconduct materially injurious to the Company or
its subsidiaries; or (iv) if the Board of Directors determines that you
have materially and willfully failed to perform your duties, such
determination to be made in good faith after having given you a reasonably
detailed written explanation of such failure and the opportunity for you
and your counsel to be heard. "Willful" means an act done, or omitted to be
done in bad faith, provided that you knew or reasonably should have known
that the action or omission was not in the best interest of the Company.
Notwithstanding the foregoing, a termination for Cause as described in
clause (iii)(y) or (iv), shall not occur unless you shall have been given
notice of the existence of the basis for termination thereunder and shall
have had 30 calendar days to cure such basis to the reasonable satisfaction
of the Board of Directors.
(e) The Company may terminate your employment by providing you with
written notice of such termination.
(f) You may terminate your employment for "Good Reason". You shall
have "Good Reason" to terminate your employment any time if, after a Change
in Control of the Company (as defined in Exhibit A), the Company (i)
<PAGE>
Mr. William A. Baum
July 15, 1997
Page 3
assigns to you any duties that are inconsistent with the positions
described in the first paragraph of this letter, (ii) diminishes
significantly your then existing duties without your written consent, (iii)
removes you from or fails to re-elect you to such positions, (iv) reduces
your base salary or the maximum percentage of base salary payable as Bonus,
(v) materially fails to comply with Sections 1 through 6 of this letter,
(vi) requires you to be based at any office or location other than the
current Miami headquarters, which change of location would require you to
commute a distance from your primary residence in excess of the greater of
(x) 50 miles and (y) 125 percent of the distance of such commute prior to
such change of location, or (vii) fails to obtain the assumption of the
Company's obligations in this letter by a successor owner of all or
substantially all of the assets of the Company.
(g) A termination of your employment shall be communicated by the
terminating party by written notice of termination ("Notice of
Termination") that shall include (i) the date such termination is to be
effective; (ii) the specific termination provision upon which the
terminating party has relied; and (iii) except for a termination under
paragraph 7(a), the facts and circumstances claimed by the terminating
party that provide a basis for the termination of your employment under the
provision indicated in the Notice of Termination. Any termination of your
employment shall, without further action on your part, constitute your
simultaneous resignation from all other positions and offices of the
Company and its subsidiaries held by you.
8. Compensation Upon Termination:
(a) Upon termination of your employment under paragraph 7(a), 7(b),
7(c) or 7(d), the Company shall have no further obligation to make any
payments to or bestow any benefits on you after the Termination Date (as
defined below), other than payments and benefits accrued and due and
payable to you prior to the Termination Date. "Termination Date" means (i)
if your employment is terminated pursuant to paragraph 7(a), the date of
your death; or (ii) if your employment is terminated for any other reason,
the date specified in the Notice of Termination which shall not be earlier
than the date such notice is sent or given to you.
(b) Upon termination of your employment by the Company without Cause
(except in the situation where paragraph 8(c) applies), the Company shall
pay you, in addition to all payments and benefits accrued, due and payable
prior to the Termination Date, a lump sum payment, within 5 business day
after the Termination Date, in an amount equal to 100 percent of your base
<PAGE>
Mr. William A. Baum
July 15, 1997
Page 4
salary as in effect on the Termination Date. The Company shall also provide
you with all fringe benefits enjoyed by you at the Termination Date (on a
basis consistent with the basis upon which such benefits were provided
prior to such termination) until the second anniversary of the Termination
Date or, to the extent that you are not eligible to participate in any
Company fringe benefit plans (by the terms of any such plan), the after tax
value of providing such benefits until the second anniversary of the
Termination Date.
(c) If after a Change in Control (i) your employment is terminated by
the Company without Cause or (ii) is terminated by you for Good Reason, in
addition to payments and benefits accrued and due and payable to you prior
to the Termination Date, the Company shall pay to you, within 5 business
days after the Termination Date, a lump sum payment equal to 100 percent of
the sum of (x) your base salary as then in effect plus (y) the maximum
Bonus which you would have been eligible to earn pursuant to paragraph 2
hereof as if the Company and you achieved 100 percent of the performance
targets for the year in which such termination occurs. The Company shall
also provide you with all fringe benefits enjoyed by you at the Termination
Date (on a basis consistent with the basis upon which such benefits were
provided prior to such termination) until the second anniversary of the
Termination Date or, to the extent that you are not eligible to participate
in any Company fringe benefit plans (by the terms of any such plan), the
after tax value of providing such benefits until the second anniversary of
the Termination Date. In the event it shall be determined that any payment
or distribution by the Company following a Change in Control (a "Payment")
would be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended, or any interest or penalties are incurred
by you with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as
the "Excise Tax"), then you shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by you
of all taxes (including any interest or penalties imposed with respect to
such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, retain an amount of Gross-Up Payment equal to
the Excise Tax imposed upon the Payments.
(d) The Company shall maintain in full force and effect until the
Termination Date all group insurance plans (the "Plans") in which you were
a participant immediately prior to the date of the Notice of Termination.
If your continued participation is not permitted under the terms of a Plan,
the Company shall arrange to provide you with alternative benefits
substantially similar to those provided under that Plan.
<PAGE>
Mr. William A. Baum
July 15, 1997
Page 5
(e) For the purposes of all retirement plans of the Company applicable
to you and in effect on the date of the Notice of Termination, the Company
shall provide for payment of retirement or death benefits to you or your
surviving spouse that are calculated to reflect service credits for the
period ending on the Date of Termination, as though you were an employee of
the Company throughout this period.
(f) You shall not be required to mitigate the amount of any payment
provided for in paragraph 7(b) or 7(c) by seeking other employment or
otherwise, nor shall the amount of any payment provided for in paragraph
7(b) or 7(c) be reduced by any compensation earned by you as the result of
employment by another employer after the Termination Date, or otherwise.
Fifty percent (50%) of any payment under paragraph 7(b) or 7(c) shall be
deemed to be in consideration of any covenant not to compete between you
and the Company.
If the foregoing accurately reflects our mutual understanding, please execute
this letter in the place provided below.
Very truly yours,
PEOPLES TELEPHONE COMPANY, INC.
By: /s/ E. Craig Sanders
E. Craig Sanders
ACCEPTED AND AGREED TO
as of the date first above written:
/s/ William A. Baum
William A. Baum
<PAGE>
EXHIBIT A
For purposes of the letter dated July 15, 1997 to which this Exhibit A is
attached, a "Change in Control" means:
(1) the acquisition of beneficial ownership, direct or indirect, of equity
securities of the Company by any person (as that term is defined in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) which, when combined with all other securities of the Company
beneficially owned, directly or indirectly by that person, equals or exceeds 50%
of (i) either the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that the following acquisitions shall not constitute a Change
of Control: (i) any acquisition by the Company or any of its subsidiaries, (ii)
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its subsidiaries or (iii) any acquisition by
any corporation with respect to which, following such acquisition, more than 75%
of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such acquisition in substantially
the same proportions as their ownership, immediately prior to such acquisition,
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be; or
(2) individuals who, as of the date hereof, constitute the Board of
Directors (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board of Directors; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or nomination
for election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding for this purpose any such individual whose initial assumption of
office occurs as a result of either an actual or threatened solicitation to
which Rule 14a-11 of Regulation 14A promulgated under the Exchange Act applies
or other actual or threatened solicitation of proxies or consents; or
(3) approval by the shareholders of the Company of a reorganization, merger
or consolidation, in each case, with respect to which all or substantially all
of the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such reorganization, merger or consolidation do not,
<PAGE>
following such reorganization, merger or consolidation, beneficially own,
directly or indirectly, more than 75% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such reorganization, merger
or consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be; or
(4) approval by the shareholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other disposition
of all or substantially all of the assets of the Company, other than to a
corporation, with respect to which following such sale or other disposition,
more than 75% of, respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately prior to such
sale or other disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be.
The term "the sale or disposition by the Company of all or substantially
all of the assets of the Company" shall mean a sale or other disposition
transaction or series of related transactions involving assets of the Company or
of any direct or indirect subsidiary of the Company (including the stock of any
direct or indirect subsidiary of the Company) in which the value of the assets
or stock being sold or otherwise disposed of (as measured by the purchase price
being paid therefor or by such other method as the Board of Directors determines
is appropriate in a case where there is no readily ascertainable purchase price)
constitutes more than two-thirds of the fair market value of the Company (as
hereinafter defined). The "fair market value of the Company" shall be the
aggregate market value of the then outstanding Company Common Stock (on a fully
diluted basis) plus the aggregated market value of Company's other outstanding
equity securities. The aggregate market value of the shares of Outstanding
Company Common Stock shall be determined by multiplying the number of shares of
Outstanding Company Common Stock (on a fully diluted basis) outstanding on the
date of the execution and delivery of a definitive agreement with respect to the
transaction or series of related transactions (the "Transaction Date") by the
average closing price of the shares of Outstanding Company Common Stock for the
ten trading days immediately preceding the Transaction Date. The aggregate
market value of any other equity securities of the Company shall be determined
in a manner similar to that prescribed in the immediately preceding sentence for
determining the aggregate market value of the shares of Outstanding Company
Common Stock or by such other method as the Board of Directors shall determine
is appropriate.
<TABLE> <S> <C>
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<NAME> Peoples Telephone Company, Inc.
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<PERIOD-END> JUN-30-1997
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15663000
0
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