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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
PhoneTel Technologies, Inc.
(Name of Issuer)
Common Stock, $.01 par value
(Title of Class of Securities)
71921H-10-9
(CUSIP Number)
Lawrence G. Goodman, Esq.
Shereff, Friedman, Hoffman & Goodman, LLP
919 Third Avenue
New York, New York 10022
(212) 758-9500
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
September 22, 1995
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement / /. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
SEC 1746 (12-91)
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SCHEDULE 13D
CUSIP No. 71921H-10-9 Page 2 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GABRIEL CAPITAL, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7 SOLE VOTING POWER
8 SHARED VOTING POWER
975,850
9 SOLE DISPOSITIVE POWER
10 SHARED DISPOSITIVE POWER
975,850
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
975,850
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.2%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE
ATTESTATION.
SEC 1746 (12-91)
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SCHEDULE 13D
CUSIP No. 71921H-10-9 Page 3 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
ARIEL FUND LIMITED
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
CAYMAN ISLANDS
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7 SOLE VOTING POWER
8 SHARED VOTING POWER
975,850
9 SOLE DISPOSITIVE POWER
10 SHARED DISPOSITIVE POWER
975,850
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
975,850
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.2%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE
ATTESTATION.
SEC 1746 (12-91)
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SCHEDULE 13D
CUSIP No. 71921H-10-9 Page 4 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
ARIEL MANAGEMENT CORP.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7 SOLE VOTING POWER
8 SHARED VOTING POWER
975,850
9 SOLE DISPOSITIVE POWER
10 SHARED DISPOSITIVE POWER
975,850
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
975,850
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.2%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE
ATTESTATION.
SEC 1746 (12-91)
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SCHEDULE 13D
CUSIP No. 71921H-10-9 Page 5 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
J. EZRA MERKIN
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7 SOLE VOTING POWER
8 SHARED VOTING POWER
1,951,700
9 SOLE DISPOSITIVE POWER
10 SHARED DISPOSITIVE POWER
1,951,700
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,951,700
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.4%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE
ATTESTATION.
SEC 1746 (12-91)
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SCHEDULE 13D
This Amendment No. 2 amends and supplements the following Items of the
Reporting Persons' Statement on Schedule 13D (the "Schedule").
Item 2. Identity and Background
(a), (b), (c) and (f) The information contained in Item 2 to the
Schedule is hereby amended and supplemented as follows:
On September 22, 1995, Gabriel and Ariel Fund entered into a Voting
and Proxy Agreement, and also an amendment thereto (collectively, the "Voting
Agreement"), with World Communications, Inc., a Missouri Corporation ("WCI").
The Issuer has advised Gabriel and Ariel Fund that Peter G. Graf, George Henry,
Gerhard Waldshutz, Steve Richman, Sarah Walker, William D. Moses Jr., The
Standard Phone Co. and Zandec Ltd., Joseph Abrams and Douglas Abrams
(collectively, the "Shareholders") have also entered into the Voting Agreement.
Gabriel and Ariel Fund have no independent arrangments or understandings with
the Shareholders.
The provisions of the Voting Agreement are described below in Item
4. A copy of the form of Voting Agreement is attached as Exhibit C hereto and
is incorporated herein by reference.
Information or disclosure contained herein with respect to the
Shareholders or WCI and the transactions described below to which such persons,
but not Gabriel and Ariel, are parties, is based solely upon information
contained in the Voting Agreement or supplied to Gabriel and Ariel Fund by the
Issuer and/or the Issuer's counsel.
Item 4. Purpose of the Transaction
The information contained in Item 4 to the Schedule is hereby
amended and supplemented as follows:
The Voting Agreement provides, among other things, that the
Shareholders and Gabriel and Ariel will vote all shares of Common Stock owned by
them (including shares of Common Stock issued upon the exercise of options and
warrants) in favor of (i) calling or causing the Issuer to call a special
meeting of shareholders to occur on or before March 31, 1996 (the "Special
Meeting"), (ii) a proposal to increase the number of directors of the Issuer to
eight, (iii) the election of four directors to the Board of Directors of the
Issuer as designated by Stuart Hollander and Aron Katzman and (iv) the grant of
conversion rights which would attach to the shares of 10% Non-Voting Preferred
Shares, without par value, of the Issuer (the "Preferred Shares"). The
Preferred Shares were issued to the
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shareholder of WCI in connection with the merger (the "Merger") of WCI with and
into a wholly owned subsidiary of the Issuer.
The Voting Agreement also provides that, under certain circumstances,
the Shareholders and Gabriel and Ariel Fund will be required to exercise, pro
rata based upon their respective rights to shares of Common Stock under such
options and warrants, any options and warrants held by them to the extent
necessary so that at least 52% of the outstanding shares of the Issuer's Common
Stock will be obligated to vote in favor of the matters specified in clauses
(ii), (iii) and (iv) above, whether pursuant to the Voting Agreement or other
agreements, assuming for purposes of this calculation that the shares of Common
Stock issued in connection with the Merger are so obligated. The Shareholders,
Gabriel and Ariel Fund also appointed Aron Katzman as proxy to vote their shares
in favor of such proposals at the Special Meeting.
The foregoing summary of the Voting Agreement is qualified in its
entirety by reference to the text thereof, a copy of the form of which is filed
as Exhibit C hereto and is incorporated by reference herein.
Item 5. Interest in Securities of the Issuer
The information contained in Item 5 to the Schedule is hereby
amended and supplemented as follows:
(a) and (b) Gabriel is the beneficial and record owner of 350,000
shares of Common Stock and Warrants to purchase 625,850 shares of Common Stock,
for a total beneficial ownership of 975,850 shares of Common Stock, or 6.2% of
the outstanding shares of Common Stock.
Ariel Fund is the beneficial and record owner of 350,000 shares of
Common Stock and Warrants to purchase 625,850 shares of Common Stock, for a
total beneficial ownership of 975,850 shares of Common Stock, or 6.2% of the
outstanding shares of Common Stock.
Ariel, as Investment Advisor to Ariel Fund, has the power to vote
and to direct the voting of and the power to dispose and direct the disposition
of the 975,850 shares of Common Stock (assuming exercise of the Warrants) owned
by Ariel Fund. Accordingly, Ariel may be deemed to be the beneficial owner of
such 975,850 shares of Common Stock, or 6.2% of the outstanding shares of Common
Stock.
As the General Partner of Gabriel, Merkin has the power to vote and
to direct the voting of and the power to dispose and direct the disposition of
the 975,850 shares of Common Stock (assuming exercise of the Warrants) owned by
Gabriel. In addition, as the president of Ariel, Merkin may be deemed to have
power to vote and to direct the voting of and the power to dispose and direct
the disposition of the 975,850 shares of Common Stock
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(assuming exercise of the Warrants) owned by Ariel Fund. Accordingly, Merkin
may be deemed to be the beneficial owner of 1,951,700 shares of Common Stock, or
12.4% of the outstanding shares of Common Stock.
The number of shares beneficially owned by each of the foregoing
Reporting Persons and the percentage of outstanding shares represented thereby,
have been computed in accordance with Rule 13d-3 under the Securities Exchange
Act of 1934, as amended. The ownership of the Reporting Persons is based on
14,490,405 outstanding shares of Common Stock of the Issuer on September 26,
1995, which information was supplied by the Issuer to the Reporting Persons.
The Warrants are exercisable for a period of ten years from issuance
at an exercise price of $.95 per share of Common Stock. The Warrants and the
Common Stock issuable in respect of the Warrants are, or will be, unregistered.
(c) Since the filing of Amendment No. 1 to the Reporting Persons'
Report on Schedule 13D, none of the Reporting Persons has effected transactions
in securities of the Issuer.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
See Item 4.
Item 7. Material to be Filed as Exhibits
Exhibit C. Form of Voting Agreement
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Signatures
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
GABRIEL CAPITAL, L.P.
By: /s/ J. Ezra Merkin
------------------
Name: J. Ezra Merkin
Title: General Partner
ARIEL FUND LIMITED
By: MEESPIERSON MANAGMENT
(CAYMAN) LIMITED
By: /s/ Roger Hanson, C. Anthony Mellin
------------------------------------
Name: Roger Hanson, C. Anthony Mellin
Title: Director, Director
ARIEL MANAGEMENT CORP.
By: /s/ J. Ezra Merkin
------------------
Name: J. Ezra Merkin
Title: President
/s/ J. Ezra Merkin
------------------
J. EZRA MERKIN
Dated: October 3, 1995
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Exhibit C
VOTING AND PROXY AGREEMENT
This agreement is made as of this 22nd day of September, 1995 by and
among World Communications, Inc. ("WCI") and the shareholders of PhoneTel
Technologies. ("PhoneTel") who have signed this agreement and who are identified
on Schedule A attached hereto (the "Shareholders").
RECITALS:
A. WCI is a party to a certain Agreement and Plan of Merger (the "Merger
Agreement"), dated of even date herewith among PhoneTel, PhoneTel II,
Inc. and WCI.
B. As a material inducement for WCI to enter into the Merger Agreement and
the WCI Shareholders to approve the Merger Agreement and the WCI
Shareholders to approve the Merger Agreement and to exchange WCI stock
for PhoneTel stock, the Shareholders have agreed to be bound by certain
restrictions in connection with the shares of common stock of PhoneTel
(i) owned by the Shareholders on the date hereof, and (ii) issued upon
conversion of the options and warrants convertible into common stock
of PhoneTel (collectively, the "Agreement Shares"), which shares are
described on Exhibit A attached hereto.
AGREEMENTS:
Now, therefore, in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:
1. Covenants With Respect To Voting. During the period commencing on the date
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hereof and ending on the earlier to occur of (i) sixteen (16) months from the
date hereof, or (ii) the approval of the "Special Meeting Proposals: as defined
below (the "Agreement Period"), the Shareholders shall cause the Agreement
Shares owned by them to be voted for the following actions:
1.1 Duly calling or causing PhoneTel to call a special meeting of shareholders
of PhoneTel to occur on or before March 31, 1996 (the "Special Meeting"), to
approve the proposals referred to in Section 1.2 below.
1.2 Voting in favor of the following proposals (the "Special Meeting
Proposals") as more specifically set forth in Schedule 1.2 hereto:
a. to increase the number of directors of PhoneTel to eight;
b. to elect (or, if already appointed by the Board, to ratify the
appointment of) four (4) directors designated jointly by Stuart Hollander and
Aron Katzman;
c. to approve the grant of conversion rights which would attach
immediately to the PhoneTel Preferred Shares (as defined in the Merger
Agreement) so that each PhoneTel Preferred Share may be converted into ten (10)
shares of PhoneTel common stock.
1.3 During the Agreement Period, the Shareholders shall not, directly or
indirectly:
a. call a meeting of shareholders of PhoneTel prior to the occurrence
of the Special Meeting; or
b. vote to remove any director of PhoneTel prior to the occurrence
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of the Special Meeting.
1.4 For thirty (30) days after the approval of the conversion rights proposal
set forth in Section 1.2c, hereof, the Shareholders agree to take any action
which would negate the effects of the approval of the proposals set forth in
subsections 1.2a, b or c hereof.
1.5 In the event that the Special Meeting is held and the Special Meeting
Proposals are not approved, then the Shareholders agree that they shall
exercise, in accordance with their terms, withing thirty (30) days after the
Special Meeting, all options and warrants held by them to acquire the common
stock of PhoneTel, and shall thereafter comply with the provisions of Section
1.1 and 1.2 with respect to calling and holding a new Special Meeting as
promptly as practicable, but in no event later than 180 days after the first
Special Meeting is held.
1.6 Notwithstanding anything in this Agreement to the contrary, this Agreement
shall continue in effect until such time as the Shareholder Loans (as defined in
the Merger Agreement) have been repaid and the guarantors have been released
from the guarantees described on Exhibit B attached hereto.
2. Representations and Warranties. Each of the Shareholders hereby represents
and warrants to WCI with respect to the Agreement Shares set forth next to such
Shareholders name on Exhibit A hereto, that:
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a. Such Shares are owned free and clear of any encumbrances;
b. Such Shares constitute all of the issued and outstanding common
stock of PhoneTel which he, she or it owns legally; and
c. Such Shareholder has authority to restrict such Shares pursuant
to the terms of this Agreement and that entering into this
Agreement does not violate any other agreements of such
Shareholder.
3. Legend. The Shareholders agree that, during the Agreement Period, the
obligations hereunder shall attach to the Agreement Shares, and that any
transfer of the Agreement Shares shall be subject to the obligations created
hereunder. the Shareholders agree that, during the Agreement Period, a legend
referencing this Agreement shall be placed on the certificates representing the
Agreement Shares prior to the transfer of the Agreement Shares. Said legend
shall provide as follows:
"The shares represented by this certificate are subject to the
provisions of a certain Voting Agreement dated September 22, 1995, by
and among World Communications, Inc. and the Shareholders referred
to therein."
The Shareholders undertake and covenant to submit to PhoneTel's Transfer Agent
the certificates representing the Agreement Shares held by them prior to
transfer for the purpose of placing the aforementioned legend on each such
certificate. The legend shall be immediately removed upon the expiration of the
Agreement Period.
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4. Irrevocable Proxy. In order to secure each Shareholders obligation to vote
his or her Agreement Shares in accordance with the provisions of this Agreement,
each Shareholder hereby appoints Aron Katzman as his, her or its true and lawful
proxy and attorney-in-fact, with full power of substitution, to all of his or
her Agreement Shares in favor of the Special Meeting Proposals. Aron Katzman
may exercise the irrevocable proxy granted to him hereunder at any time any
Shareholder fails to comply with the provisions of this Agreement. The proxies
and powers granted by each Shareholder pursuant to his Section 4 are coupled
with an interest and given to secure the performance of each Shareholder's
obligations to WCI under this Agreement. Such proxies and powers shall be
irrevocable until the earlier of (i) the end of the Agreement Period or (ii)
August 12, 1996.
5. No Adequate Remedy. Since it is recognized by the Shareholders that
irreparable damage without an adequate judicial remedy at law could result from
any violation of the provisions of this Agreement, the Shareholders agree that,
in addition to any other remedies available to WCI or its shareholders WCI and
its shareholders shall have the remedy of a restraining order, injunction, or
such other equitable relief as may be decreed or issued by a court of competent
jurisdiction to enforce the provisions hereof.
6. Miscellaneous.
6.1 Enforceability. If any term provision, covenant or restriction of this
Agreement thereof to any person or circumstance should be held by an
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administrative agency or court of competent jurisdiction to be invalid, void, or
unenforceable, then the remainder of this Agreement and the application of such
term provision, covenant, or restriction to other persons or circumstances shall
not be affected thereby, but rather shall be enforced to the greatest extent
permitted by law. Further, it is the intent of the Parties that if any term,
provision, covenant, or restriction of the Agreement should be held to be
invalid, void, or unenforceable as applied to any person or circumstance, then
such term, provision, covenant, or restriction shall be modified to the minimum
extend necessary in order to render the same enforceable, consistent with the
expressed objectives of the parties hereto the entering into this Agreement.
6.2 Successors and Assigns: Third Party Beneficiary Rights. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors, assigns, heir, legatees, and other legal
representatives. The parties acknowledge that his Agreement is intended to and
shall be construed to give the shareholders of WCI third party beneficiary
rights including the right, either individually or collectively, to enforce the
provisions of this Agreement against the Shareholders.
6.3 Headings. The headings in this Agreement have been inserted solely for
convenience of reference and do not themselves constitute a part of this
Agreement.
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6.4 Entire Understanding. This Agreement and the documents referred to herein
set forth the entire understanding of the parties relating to the subject matter
of this action and any other prior or contemporaneous oral or written agreement
respecting its subject matter shall have no force or effect whatsoever.
6.5 Waiver. No waiver of any breach of any term hereof shall be effective
unless in writing and signed by the party against whom enforcement of waiver is
sought, and no such waiver shall be construed as a waiver of any subsequent
breach of that term or of any other term hereof.
6.6 Amendment. This Agreement may not be amended, modified, or terminated
except by a writing signed by all other parties.
6.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all which
together shall be deemed to be the same instrument.
6.8 Governing Law. It is the intention of the parties hereto that this
Agreement shall be subject to, governed by, and construed and enforced in
accordance with the laws of the State of Ohio. In the event of a breach by any
party of its obligations hereunder, the prevailing party in such litigation, as
determined by the court, shall be entitled to reimbursement of its reasonable
attorneys' fees and costs.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day first written above.
WORLD COMMUNICATIONS, INC.
By: _______________________________
Its: ______________________________
"SHAREHOLDERS":
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
I hereby accept the appointment the appointments as proxy referenced in Section
4 hereof.
________________________________________
Aron Katzman
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EXHIBIT A
Beneficial Ownership
Shares Warrants/Options
------ ----------------
Sarah Walker 57,000 0
Peter Graf 831,575 449,401
George Henry 1,951,959 0
Steven Richman 380,783 240,477
Standard Phone Co. 1,148,480 0
and Zandec Ltd.
Gerhard Waldshutz 260,783 123,677
Gabriel Capital, 700,000 1,251,700
L.P. and Ariel Fund
Limited
Douglas Adams 120,000 25,000
Joseph Abrams 40,000 0
William Moses Jr. 140,000 514,550
Aron Katzman 191,568 0
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VOTING AND PROXY AGREEMENT
EXHIBIT B
Shareholders of WCI named below have guaranteed certain indebtedness of WCI and
PhoneTel to The Boatmen's National Bank of St. Louis, N.A., St. Louis, Missouri,
which must be released before this Agreement may be terminated in accordance
with Section 1.6 of this Agreement.
Stuart Hollander and Sharon Hollander
Aron Katzman
Jack D. Minner
David Hoffman
Sanford J. Spitzer
Gary Pace and Kelly Pace
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SCHEDULE 1.2
PROPOSED RESOLUTIONS OF A SPECIAL MEETING
OF THE SHAREHOLDERS OF PHONETEL TECHNOLOGIES, INC.
RESOLVED, that the first sentence of the second paragraph of Article III,
Section 1 of the Corporation's Code of Regulations be deleted in its entirety
and the following inserted in lieu thereof:
"The number of directors shall be not less than four (4) persons nor more
than ________ (____) persons."
RESOLVED FURTHER, that the number of Directors shall be increased to eight
(8) and the following persons are elected as Directors, each to serve until the
next annual meeting of Shareholders and until such Directors's successors shall
be elected and qualified:
______________________________
______________________________
______________________________
______________________________
______________________________
______________________________
______________________________
______________________________
RESOLVED FURTHER, that subparagraph (j) of the Corporations' Articles of
Incorporation is hereby amended by the addition of the following as paragraph 8:
8. CONVERSION RIGHTS. Any holder of 10% Preferred Stock Series B may, at any
time, convert all, but not less than all, of his, her or its shares of 10%
Preferred Stock Series B into fully paid and non-assessable shares of Common
Stock such that each of 10% Preferred Stock Series B stock is convertible into
ten (10) shares of Common Stock. In order to exercise the conversion privilege,
the holder of 10% Preferred Stock Series B stock to be converted shall surrender
certificates for such stock, duly endorsed or assigned to the Company or in
blank, accompanied by written notice to the Company that the holder selects to
convert such stock (the "Conversion Notices"). As soon as practicable but not
later than twenty (20) business days after the Company's receipt of the
Conversion Notice, the Company shall cause to the issued to the holder
certificates for such Common Stock. Such Common
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Stock shall carry with it the same registration rights as were granted in
connection with the Merger.
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AMENDMENT AGREEMENT
THIS AMENDMENT AGREEMENT dated as of September 22, 1995, amends the Voting
and Proxy Agreement (the "Agreement") of even date herewith by and among World
Communications, Inc. ("WCI") and the shareholders of PhoneTel Technologies, Inc.
("PhoneTel") signatory thereto (the "Shareholders"). All terms capitalized and
not defined herein shall have the meaning ascribed to them in the Agreement.
WHEREAS, WCI and the Shareholders have entered into the Agreement, and
wish to clarify or modify certain of the obligations set forth therein;
NOW, THEREFORE, the parties hereto, intending to be legally bound, agrees as
follows:
1. Notwithstanding the obligations of the Shareholders under Section 1.5 of
the Agreement, the Shareholders will be required to exercise any options and
warrants held by them only to the extent necessary so that at least 52% of the
outstanding shares of common stock of PhoneTel ("PhoneTel Shares") will be
obligated to vote in favor of the Special Meeting Proposals, whether pursuant to
the Agreement or other agreements, assuming for purposes of calculation that all
PhoneTel Shares issued in connection with the merger of WCI with and into a
wholly-owned subsidiary of PhoneTel are so obligated.
2. The obligation to exercise options and warrants pursuant to Section 1.5 of
the Agreement, as modified by Section 1 above, shall apply pro rata to the
Shareholders on the basis of the number of PhoneTel Shares issuable upon
exercise of such options and warrants.
3. This Amendment Agreement shall be effective as to each Shareholder upon
execution hereof, notwithstanding the failure of any other Shareholder to
execute this Amendment Agreement.
4. Except as modified hereby, the Agreement remains in full force and effect.
5. This Amendment Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which shall be deemed
to be one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Amendment Agreement as
of the day first above written.
WORLD COMMUNICATIONS, INC.
By: __________________________________
Title: ______________________________
SHAREHOLDERS
______________________________________
______________________________________
______________________________________
______________________________________
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