<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-KSB/A-1
(Mark One)
[X] Annual report under Section 13 or 15(d) of the Securities Exchange Act of
1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
-----------------
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
COMMISSION FILE NUMBER 0-16715
PHONETEL TECHNOLOGIES, INC.
---------------------------
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
OHIO 34-1462198
---- ----------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1127 EUCLID AVENUE, SUITE 650, STATLER OFFICE TOWER 44115-1601
- --------------------------------------------------- ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(216) 241-2555
--------------
(ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE)
SECURITIES REGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- -------------------
COMMON STOCK, PAR VALUE $0.01 AMERICAN STOCK EXCHANGE
SECURITIES REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE ACT:
COMMON STOCK, $0.01 PAR VALUE
-----------------------------
(TITLE OF CLASS)
CHECK WHETHER THE ISSUER: (1) FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION
13 OR 15(d) OF THE EXCHANGE ACT DURING THE PAST 12 MONTHS (OR FOR SUCH SHORTER
PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN
SUBJECT TO SUCH FILING REQUIREMENTS FOR PAST 90 DAYS. YES X NO
--- ---
CHECK IF THERE IS NO DISCLOSURE OF DELINQUENT FILERS IN RESPONSE TO ITEM 405 OF
REGULATION S-B CONTAINED IN THIS FORM, AND NO DISCLOSURE WILL BE CONTAINED, TO
THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION
STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-KSB OR ANY
AMENDMENT TO THIS FORM 10-KSB. [ X ]
Revenues for the year ended December 31, 1996 were $44,804,000.
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of April 28, 1997 was $32,415,000.
The number of shares outstanding of the registrant's Common Stock, $0.01 par
value, as of April 28, 1997 was 16,097,200.
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
1
<PAGE> 2
The undersigned registrant hereby amends the following items and exhibits of its
Annual Report for the fiscal year ended December 31, 1996 previously filed on
Form 10-KSB as set forth in the pages attached hereto.
COVER PAGE
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 10. EXECUTIVE COMPENSATION
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PART IV
ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K
2
<PAGE> 3
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth the names and ages of the members of the
Company's Board of Directors and its executive officers, and the positions with
the Company held by each.
<TABLE>
<CAPTION>
NAME, AGE AND
TENURE AS DIRECTOR PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- ------------------ -------------------------------------------
<S> <C>
Joseph Abrams, Age 60 Served as a Director of the Company since September 1995. Mr. Abrams
Director since September 1995 is also a director of Merisel, Inc., a public company that distributes micro
computer hardware and software, and Spectrum Signal Processing, Inc., a
public company that specializes in digital signal solutions. Mr. Abrams was
a co-founder of and served as the President of AGS Computers from 1967
to 1991. Since 1991, Mr. Abrams has been a private investor.
Peter G. Graf, Age 59 Served as a Director, Chairman and Chief Executive Officer of the Company since
Director since July 1995 July 1, 1995. Mr. Graf is licensed as an attorney and as a certified public
accountant and serves as an officer and/or director of various privately-held
companies and is the Managing Partner of an accounting firm. From 1991 to
September 1995, Mr. Graf served as Vice Chairman of USA Mobile Communications
Holdings, Inc.
George H. Henry, Age 43 Served as a Director of the Company since April 1990. Mr. Henry has been the
Director since April 1990 President of G. Howard Associates, Inc., a private investment firm, since 1986.
Mr. Henry is also on the Board of Directors of Biovail International Corporation and
is a trustee of Mitchell College.
Aron Katzman, Age 58 Served as a Director of the Company since September 1995. Mr. Katzman
Director since September 1995 is President of New Legends, Inc., a country club/residential community in
the St. Louis, Missouri area, and Chairman and Chief Executive Officer of
Decorating Den of Missouri, a company engaged in the selling of decorating
franchises in Missouri. Previously, Mr. Katzman was founder and former
director of Medicine Shoppe, Inc., a franchisor of pharmacies, and
Chairman and Chief Executive Officer of Roman Company, a manufacturer
and distributor of fashion costume jewelry, from 1984 until it was sold in
1994. Mr. Katzman was formerly a director and officer of World
Communications, Inc., which was merged into the Company in September
1995.
Nickey B. Maxey, Age 40 Served as a Director of the Company since April 1996 and as Vice
Director since April 1996 Chairman of the Company since February 1997. Mr. Maxey was founder and
President of International Pay Phones, Inc., a Tennessee company, and
International Pay Phones, Inc., a South Carolina company, for more than
five years prior to the acquisition of said companies by the Company in
March 1996. Since 1990, Mr. Maxey has owned and operated Resort
Hospitality Services of South Carolina, Resort Hospitality Services of
Tennessee and Resort Hospitality Services International, a group of affiliated
companies which are resellers of long distance services.
</TABLE>
3
<PAGE> 4
<TABLE>
<CAPTION>
NAME, AGE AND
TENURE AS DIRECTOR PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- ------------------ -------------------------------------------
<S> <C>
Steven Richman, Age 53 Served as a Director of the Company since September 1995. Mr. Richman
Director since September 1995 is principal owner of, and has served as the Chief Executive Officer of,
Fabric Resources International for more than the past five years. Mr.
Richman was the co-founder and an officer of Cable Systems USA, an
officer at Cellular Systems USA, and a director of USA Mobile
Communications Holdings, Inc. Mr. Richman has been a director of Cable
Systems USA II since 1989.
</TABLE>
EXECUTIVE OFFICERS OF THE REGISTRANT
The Company has two executive officers other than Messrs. Graf and Maxey.
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS BUSINESS EXPERIENCE DURING THE LAST FIVE YEARS
- ------------------ ----------------------------------------------
<S> <C>
Tammy L. Martin Served as Executive Vice President and Chief Administrative Officer of the
Age 32 Company since April 1996 and has been General Counsel and Secretary of the
Company since September 1995. Previously, Ms. Martin served as Associate Legal
Counsel for the Company during 1993 and 1994. Prior to joining the Company, Ms.
Martin was in private legal practice from 1992 to 1993 and was self-employed as
an accountant from 1990 to 1992.
Richard P. Kebert Served as Chief Financial Officer and Treasurer of the Company since September
Age 50 1996. Prior to joining the Company, Mr. Kebert was an independent consultant.
From 1994 to 1996, he was Vice President-Finance and Administration of Acordia
of Cleveland, Inc. For 12 years prior thereto, Mr. Kebert held several senior
management positions with Mr. Coffee, inc., including Vice President-
Administration and Secretary. Mr. Kebert is a certified public accountant.
</TABLE>
ITEM 10. EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
On September 22, 1995, the Company entered into an employment agreement
with the Company's former Senior Vice President, Gary Pace, pursuant to the
terms of the acquisition of World Communications, Inc. ("World"). The agreement
with Mr. Pace entitles him to annual salaries of $110,000 and $120,000, as well
as certain bonuses, during the two year term of the agreement.
On September 1, 1996, the Company also entered into an employment agreement
with the Company's Chief Financial Officer and Treasurer, Richard P. Kebert. The
agreement with Mr. Kebert entitles him to an annual salary of $120,000, as well
as a guaranteed minimum bonus of $15,000, during the eighteen-month term of the
agreement.
The following table sets forth a summary of all compensation of the
Company's Chief Executive Officer and all other executive officers whose total
compensation exceeded $100,000 per year for any year in the three year period
ended December 31, 1996.
4
<PAGE> 5
================================================================================
SUMMARY COMPENSATION TABLE
================================================================================
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards Payouts
----------------------- -------------------------
Other Long- All Other
Name Annual Restricted Term Com-
and Compen- Stock Options/ Incentive pen-
Principal Salary Bonus sation Award(s) SARs Payouts sation
Position Year ($) ($) ($) ($) (#) ($) ($)
--------- ---- ------ ------ ------ ------- ------- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Peter G. Graf 1996 -- -- -- -- -- -- --
Chairman, Chief 1995 -- -- -- -- -- -- --
Executive 1994 -- -- -- -- -- -- --
Officer and
Director
Jerry H. Burger 1996 -- -- -- -- 208,252(a) -- 468,527(b)
Former Chief 1995 74,293 13,600 13,600(c) -- 62,500 -- 212,000(d)
Executive 1994 40,000 -- -- -- -- -- --
Officer
Bernard Mandel 1996 -- -- -- -- 106,524(e) -- 325,731(f)
Former President, 1995 147,544 9,760 9,760(g) -- 41,666 -- 146,500(h)
Chief Operating 1994 88,894 -- 4,154(i) -- -- -- --
Officer, and Secretary
Daniel J. Moos 1996 61,154 -- 5,771(j) -- 67,826(k) -- 25,000(l)
Former Executive 1995 95,000 1,442 12,800(m) -- 54,999 -- --
Vice President,
Chief Financial
Officer and
Treasurer
Tammy L. Martin 1996 98,123 106,892 -- -- -- -- --
Executive Vice
President, Chief
Administrative
Officer, General
Counsel and
Secretary
Gary Pace 1996 112,307 20,000 -- -- -- -- --
Former Senior
Vice President
<FN>
(a) Represents additional shares issuable pursuant to anti-dilution rights. Mr.
Burger's outstanding options and the adjusted per share option price
(adjusted pursuant to anti-dilution rights) are as follows: 131,414 options
exercisable at $2.17 per share, 157,563 options exercisable at $2.38 per
share and 46,636 options exercisable at $2.23 per share through August 31,
1997.
(b) In addition to certain cash payments made under the Burger Separation
Agreement (as defined herein), also represents the value of non-business
use of a Company automobile and medical insurance premiums of $19,236 and
accrued interest of $4,291 paid pursuant to the Burger Separation
Agreement.
</TABLE>
5
<PAGE> 6
(c) Represents the value of 2,833 shares paid to Mr. Burger for services
provided.
(d) On September 15, 1995, the Company and Mr. Burger entered into a separation
agreement (the "Burger Separation Agreement") which provided for the
termination of his employment agreement and the resignation of Mr. Burger
as a Director, Officer and employee of the Company. Pursuant to the Burger
Separation Agreement, the Company agreed to pay Mr. Burger the amount of
$650,000 in installments, with an initial payment of $205,000 made in
September 1995 and the final payment of $445,000 made on March 15, 1996
and $7,000 for miscellanous expenses.
(e) Represents additional shares issuable pursuant to anti-dilution rights. Mr.
Mandel's outstanding options and the adjusted per share option price
(adjusted pursuant to anti-dilution rights) are as follows: 5,650 options
exercisable at $5.31 per share, 105,040 options exercisable at $2.38 per
share and 62,500 options exercisable at $1.20 per share through August 1,
2000.
(f) In addition to certain cash payment made under the Mandel Separation
Agreement (as defined herein), also represents the value of non-business
use of a Company automobile and medical insurance premiums of $14,255 and
accured interest of $2,976 paid pursuant to the Mandel Separation
Agreement.
(g) Represents the value of 2,033 shares paid to Mr. Mandel for services
provided.
(h) On September 15, 1995, the Company and Mr. Mandel entered into a separation
agreement (the "Mandel Separation Agreement") which provided for the
terminantion of his employment agreement and the resignation of Mr.
Mandel as a Director, Officer and employee of the Company. Pursuant to the
Mandel Separation Agreement, the Company agreed to pay Mr. Mandel the
amount of $455,000 in installments, with an initial payment of $146,500
made in September 1995 and the final payment of $308,500 made on March
15, 1996.
(i) Represents the value of non-business use of Company automobile.
(j) Represents the value of non-business use of Company automobile paid
pursuant to the Moos Separation Agreement (as defined herein).
(k) Represents additional shares issuable pursuant to anti-dilution rights. Mr.
Moos's outstanding options and the adjusted per share option price
(adjusted pursuant to anti-dilution rights) are as follows: 21,008 options
exercisable at $2.38 per share and 101,817 options exercisable at $2.75
per share through August 2, 2000.
(l) On July 29, 1996, the Company and Mr. Moos entered into a separation
agreement (the "Moos Separation Agreement") which provided for the
termination of his employment agreement and the resignation of Mr. Moos as
an Executive Vice President, Chief Financial Officer and Treasurer of the
Company, effective August 2, 1996. Pursuant to the Moos Separation
Agreement, the Company agreed to pay Mr. Moos the amount of $325,000, of
which $25,000 was paid in 1996 and $250,000 was paid in 1997.
(m) Represents the value of 2,666 shares paid to Mr. Moos for services
provided.
GRANTS IN FISCAL 1996
Other than options issued pursuant to certain anti-dilution rights, there
were no individual grants of stock options made during the year ended December
31, 1996 to any of the named executive officers. The following table sets forth
certain information about unexercised stock options held by the named
executive officers at December 31, 1996. No stock options were exercised by such
persons during 1996.
6
<PAGE> 7
================================================================================
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND
FY-END OPTION/SAR VALUES
================================================================================
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
SHARES UNEXERCISED IN-THE-MONEY
ACQUIRED OPTIONS/SARS OPTIONS/SARS
NAME ON VALUE AT FY-END AT FY-END
AND EXERCISE REALIZED (#) ($)
PRINCIPAL POSITION (#) ($) EXERCISABLE EXERCISABLE
---------------- ------- ------- ------------ -------------
<S> <C> <C> <C> <C>
Peter G. Graf -- -- -- --
Chairman,
Chief Executive Officer
and Director
Jerry H. Burger -- -- 335,613 274,137
Former Chief
Executive Officer
Bernard Mandel -- -- 173,190 193,331
Former President,
Chief Operating Officer
and Secretary
Daniel J. Moos -- -- 122,825 49,994
Former Executive
Vice President,
Chief Financial Officer
and Treasurer
Tammy L. Martin -- -- 333 --
Executive Vice President,
Chief Administrative Officer,
General Counsel and
Secretary
</TABLE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock owned by each Director of the Company, each person
known by the Company to own beneficially more than 5% of the outstanding Common
Stock, the named executive officers and all Directors and Officers as a group as
of March 31, 1997 (after giving effect to the sale of shares pursuant to the
Over-Allotment Option). Unless otherwise indicated, the number of shares of
Common Stock owned by the named shareholders assumes the exercise of the
warrants or options that are exercisable within 60 days, the number of which is
separately referred to in a footnote, and the percentage shown assumes the
exercise of such warrants or options and assumes that no warrants or options
held by others are exercised. This information is based upon information
furnished by such persons and statements filed with the Commission and other
information known by the Company.
7
<PAGE> 8
<TABLE>
<CAPTION>
===================================================================================================================
NUMBER OF SHARES PERCENTAGE
NAME AND ADDRESS OF COMMON STOCK OF
OF BENEFICIAL OWNER BENEFICIALLY OWNED CLASS
===================================================================================================================
DIRECTORS
=========
<S> <C> <C>
Peter G. Graf (a)(o) 1,272,434 7.7%
Chairman, Chief Executive Officer
and Director
1127 Euclid Avenue, Suite 650
Cleveland, OH 44115-1601
Nickey B. Maxey (b)(o) 408,411 2.5%
Vice Chairman and Director
1127 Euclid Avenue, Suite 650
Cleveland, OH 44115-1601
George H. Henry (c) 350,376 2.2%
Director
6860 Sunrise Court
Coral Gables, FL 33133
Stuart Hollander (d) 323,559 2.0%
Director
32 Lake Forest
St. Louis, MO 63117
Steven Richman (e)(o) 261,734 1.6%
Director
9 Beech Lane
Kings Point, NY 11024
Aron Katzman (f)(o) 248,045 1.5%
Director
10 Layton Lane
St. Louis, MO 63124
Joseph Abrams (g)(o) 200,014 1.2%
Director
85 Old Farm Road
Bedminster, NJ 07921
NAMED EXECUTIVE OFFICERS
=======================
Jerry H. Burger (h) 365,113 2.2%
Former Chief Executive Officer
27040 Cedar Road
Beachwood, OH 44122
</TABLE>
8
<PAGE> 9
<TABLE>
<CAPTION>
===================================================================================================================
NUMBER OF SHARES PERCENTAGE
NAME AND ADDRESS OF COMMON STOCK OF
OF BENEFICIAL OWNER BENEFICIALLY OWNED CLASS
===================================================================================================================
<S> <C> <C>
Bernard Mandel (i) 176,473 1.1%
Former President, Chief Operating Officer and
Secretary
8233 Whispering Pines Drive
Russell, OH 44072
Daniel J. Moos (j) 134,824 1.0%
Former Executive Vice President,
Chief Financial Officer and Treasurer
7399 Stow Road
Hudson, OH 44236
Tammy L. Martin (k) 333 *
Executive Vice President,
Chief Administrative Officer,
General Counsel and Secretary
Executive Officers and Directors 3,064,905 18.2%
as a group (8 persons) (l)(o)
5% BENEFICIAL OWNERS
====================
ING (U.S.) Investment Corporation (m) 2,048,240 11.3%
135 East 57th Street
New York, NY 10022
Cerberus Partners, L.P. (n) 2,048,240 11.4%
450 Park Avenue
New York, NY 10022
<FN>
* Less than 1.0%
(a) Includes warrants to purchase 33,231 shares of Common Stock through
December 31, 1997, warrants to purchase 41,833 shares of Common Stock
through August 15, 2000 and 14% Preferred which is convertible through June
30, 2000 into 288,646 shares of Common Stock.
(b) Includes 14% Preferred which is convertible through June 30, 2000 into
33,489 shares of Common Stock.
(c) Includes options to purchase 25,000 shares of Common Stock through October
9, 1998.
(d) Includes 148,864 shares of Common Stock held by his spouse and 6,266 shares
of Common Stock held by other family members.
(e) Includes Nominal Value Warrants to purchase 89,998 shares of Common Stock
through March 31, 2001, warrants to purchase 8,110 shares of Common Stock
through December 31, 1997, warrants to purchase 12,500 shares of Common
Stock through August 15, 2000, warrants to purchase 16,222 shares of Common
Stock through August 29, 2000, warrants to purchanse 3,244 shares of Common
Stock through August 29, 2000, 11,033 shares of Common Stock held by his
spouse and 14% Preferred which is convertible through June 30, 2000 into
48,108 shares of Common Stock.
(f) Includes 14% Preferred which is convertible through June 30, 2000 into
50,850 shares of Common Stock.
(g) Includes 14% Preferred which is convertible through June 30, 2000 into
67,351 shares of Common Stock.
(h) Includes options to purchase 335,613 shares of Common Stock through August
31, 1997. Beneficial owner has anti-dilution rights pursuant to stock
option agreements or other rights which may require adjustments to the
</TABLE>
9
<PAGE> 10
number of shares beneficially owned as a result of certain transactions
which occur subsequent to March 31, 1997.
(i) Includes options to purchase 173,190 shares of Common Stock through August
1, 2000 and 1,250 shares of Common Stock held by his spouse. Beneficial
owner has anti-dilution rights pursuant to stock option agreements or other
rights which may require adjustments to the number of shares beneficially
owned as a result of certain transactions which occur subsequent to March
31, 1997.
(j) Includes options to purchase 122,825 shares of Common Stock which expire
August 2, 2000. Beneficial owner has anti-dilution rights pursuant to stock
option agreements or other rights which may require adjustments to the
number of shares beneficially owned as a result of certain transactions
which occur subsequent to March 31, 1997.
(k) Includes options to purchase 333 shares of Common Stock through January 3,
2000.
(l) Includes beneficial ownership of Common Stock described above with respect
to Messrs. Graf, Maxey, Richman, Abrams, Katzman, Hollander and Henry and
Ms. Martin.
(m) Reflects Lenders' Warrants (as defined herein) to purchase the Series A
Preferred, which is immediately convertible into 2,048,240 shares of Common
Stock. ING (U.S.) Investment Corporation is a wholly-owned subsidiary of
Internationale Nederlanden (U.S.) Capital Corporation ("ING"). In December
1996, ING transferred the Lenders' Warrants to ING (U.S.) Investment
Corporation. All references to "ING" as holder of the Lenders' Warrants or
as a holder of shares of Common Stock refer to ING (U.S.) Investment
Corporation. See "Capital Stock".
(n) Reflects Lenders' Warrants to purchase the Series A Preferred, which is
immediately convertible into 1,798,240 shares of Common Stock. See "Capital
Stock".
(o) See "Certain Transactions" for information with respect to the 14%
Preferred and the Nominal Value Warrants.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On March 15, 1996, Nominal Value Warrants to purchase 2,018,942 shares of
Common Stock expiring March 13, 2001 were issued in conjunction with the
acquisitions of International Pay Phones, Inc., a Tennessee company,
International Pay Phones, Inc., a South Carolina company and Paramount
Communications Systems, Inc., redemption of the 10% Preferred, 8% Preferred and
7% Preferred and conversion of certain debt of the Company into the 14%
Preferred. See "Description of Capital Stock--Preferred Stock--14% Preferred"
for a description of the terms of the 14% Preferred. Concurrently with their
exchange of debt and preferred stock for the 14% Preferred, the following
Directors, Executive Officers and security holders, who at the time held 5% or
more of the Common Stock, received the amount of 14% Preferred and Nominal Value
Warrants shown below.
<TABLE>
<CAPTION>
==============================================================================================
Value of Debt/Preferred Number of Nominal
Name of Beneficial Owner Surrendered Value Warrants
and Stated Value of 14% Issued
Preferred Issued
==============================================================================================
<S> <C> <C>
Peter G. Graf $1,500,000 539,989
Chairman, Chief
Executive Officer
and Director
Joseph Abrams $ 350,000 125,997
Director
Aron Katzman $ 264,250 95,128
Director
</TABLE>
10
<PAGE> 11
<TABLE>
<CAPTION>
==============================================================================================
Value of Debt/Preferred Number of Nominal
Name of Beneficial Owner Surrendered Value Warrants
and Stated Value of 14% Issued
Preferred Issued
==============================================================================================
<S> <C> <C>
Steven Richman $250,000 89,998
Director
Nickey B. Maxey $174,032 62,650
Director
J&C Resources, Inc. $825,000 296,994
5% Owner
Southcoast Capital $600,000 143,994
Corporation
5% Owner
</TABLE>
In 1995, Mr. Graf loaned an aggregate of $1.25 million to the Company at no
interest. Such amounts were subordinated to the Company's other indebtedness. In
the first quarter of 1996, Mr. Graf loaned to the Company an additional $250,000
under similar terms. On March 15, 1996, Mr. Graf and the Company agreed to
convert $1.5 million of such indebtedness into 25,000 shares of 14% Preferred
and 539,989 Nominal Value Warrants. Additionally in 1996, Mr. Graf loaned
approximately $585,000 to the Company at an interest rate of 13.25%. On
December 31, 1996, Mr. Graf and the Company agreed to convert approximately
$248,000 of the principal amount of such indebtedness into 99,119 shares of
Common Stock or $2.50 per share, representing the market price of the Common
Stock on the day the Company's Board of Directors approved the conversion. On
January 2, 1997, Mr. Graf and the Company agreed to convert the remaining
indebtedness of approximately $337,000, plus accrued interest of $37,000, into
124,747 shares of Common Stock or $3.00 per share, representing the market
price of the Common Stock on the day the Company's Board of Directors approved
the conversion.
In March 1996, a predecessor of Southcoast Capital Corporation
("Southcoast"), which at the time and prior to the consummation of the Company
Equity Offering was a 5% or more stockholder of the Company, was paid fees
consisting of (i) $600,000, (ii) 10,000 shares of 14% Preferred valued at
$600,000 and (iii) Nominal Value Warrants to purchase 143,944 shares of Common
Stock for providing financial advisory services to the Company in connection
with a certain credit agreement. In addition, in December 1995, a predecessor of
Southcoast received 56,666 shares of Common Stock and warrants to purchase
166,666 shares of the Company's Common Stock at an exercise price of $6.00 per
share through September 5, 2000, for services rendered in connection with the
acquisition of World and a working capital loan. Southcoast was the underwriter
in an offering of the Company's Common Stock (the "Company Equity Offering") and
received $1,418,000 in December 1996 and $213,000 in January 1997 for acting as
the underwriter in connection with the Company Equity Offering and $808,000 in
January 1997 for providing financial advisory services to the Company in
connection with the acquisition of Cherokee Communications, Inc.
Internationale Nederlanden (U.S.) Capital Corporation ("ING") and Cerberus
Partners, L.P., each of which is a 5% or more stockholder and one of the lenders
under a certain credit agreement, received customary fees during 1995 and 1996
pursuant to the terms of said credit agreement, including fees upon the
prepayment and termination of said credit agreement in December 1996. In
addition, an affiliate of ING received approximately $656,000 in December 1996
for acting as co-underwriter in the Company Debt Offering.
11
<PAGE> 12
On September 22, 1995, the Company entered into a consulting agreement with
Stuart Hollander, World's Chairman pursuant to the terms of the acquisition of
World. The agreement with Mr. Hollander entitles him to annual payments of
$125,000 and $135,000 during the two year term of the agreement.
PART IV
ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K
(A) LIST OF DOCUMENTS FILED AS PART OF THIS REPORT
<TABLE>
<CAPTION>
1. FINANCIAL STATEMENTS - incorporated by reference from the Company's
Form 10-KSB for the year ended December 31, 1996.
<S> <C>
Report of Independent Accountants...................................................... F-1
Consolidated Balance Sheets as of December 31, 1995 and 1996........................... F-2
Consolidated Statements of Operations for the Years Ended
December 31, 1994, 1995 and 1996.................................................. F-3
Statement of Changes in Mandatorily Redeemable Preferred Stock for the Years Ended
December 31, 1994, 1995 and 1996.................................................. F-4
Consolidated Statements of Changes in Non-Mandatorily Redeemable Preferred Stock,
Common Stock and Other Shareholders' Equity for the Years Ended
December 31, 1994, 1995 and 1996................................................... F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 1994,
1995 and 1996...................................................................... F-7
Notes to Financial Statements for the Years Ended
December 31, 1994, 1995 and 1996.................................................. F-9
</TABLE>
2. EXHIBITS
--------
EXHIBIT NO. DESCRIPTION
3.1 Articles of Incorporation. (1)*
3.2 Amendment to Articles of Incorporation dated August 30, 1989. (2)*
3.3 Amended and Restated Code of Regulations. (5)*
3.5 Amendment to Articles of Incorporation dated January 3, 1992. (5)*
3.6 Amendment to Articles of Incorporation dated January 20, 1992. (5)*
3.7 Amendment to Articles of Incorporation dated April 9, 1992. (8)*
12
<PAGE> 13
3.8 Amendment to Articles of Incorporation dated June 18, 1993. (8)*
3.9 Amendment to Articles of Incorporation dated June 30, 1993. (8)*
3.10 Amendment to Articles of Incorporation dated September 22, 1995. (13)*
3.11 Amendment to Articles of Incorporation dated December 15, 1995. (13)*
3.12 Amendment to Articles of Incorporation dated February 28, 1996. (13)*
4.1 Specimen of Common Stock Certificate. (3)*
4.2 Form of 14% Convertible Preferred Stock. (13)*
4.3 Indenture relating to the Notes offered in the Company Debt Offering
(including the form of Note). (18)*
5.1 Opinion of Tammy L. Martin, Esq. regarding validity of certain Notes.
(18)*
10.1 Stock Option Agreement between William Tymoszczuk and PhoneTel
Technologies, Inc. dated March 1, 1987. (3)*
10.2 Stock Incentive Plan for Key Employees dated May 5, 1987. (1)*
10.3 Amended and Restated Stock Option Agreement between PhoneTel
Technologies, Inc. and Jerry H. Burger dated July 1, 1993. (8)*
10.4 Stock Option Agreement dated July 1, 1993 between PhoneTel
Technologies, Inc. and Bernard Mandel. (8)*
10.5 Form of Stock Option Agreement between PhoneTel Technologies, Inc. and
DeBartolo, Inc. (4)*
10.6 Extension of Stock Option Agreement between PhoneTel Technologies, Inc.
and The Edward J. DeBartolo Corporation. (8)*
10.7 Separation Agreement dated September 15, 1995 between PhoneTel
Technologies, Inc. and Jerry H. Burger, together with amendments
thereto. (13)*
10.8 Separation Agreement dated September 15, 1995 between PhoneTel
Technologies, Inc. and Bernard Mandel, together with amendments
thereto. (13)*
10.9 Lease Agreement between PhoneTel Technologies, Inc. and Bankers Leasing
Association, Inc. dated February 12, 1992. (5)*
10.10 Registration Rights Agreement dated April 10, 1992 among PhoneTel
Technologies, Inc., George H. Henry, Carl Kirchhoff and Charles Stuart.
(5)*
10.11 Registration Rights Agreement among PhoneTel Technologies, Inc., J & C
Resources, Inc. and Allen Moskowitz. (5)*
10.12 Form of Stock Option Agreement and Registration Rights Agreement
between PhoneTel Technologies, Inc. and The Edward J. DeBartolo
Corporation. (5)*
13
<PAGE> 14
10.13 Stock Option Agreement and Registration Rights Agreement between
PhoneTel Technologies, Inc. and William D. Moses, Jr. dated May 11,
1992. (5)*
10.14 Assignment Agreement between William D. Moses, Jr. and Edward A.
Moulton transferring the right to receive options to acquire 5,000
shares of Common Stock of PhoneTel Technologies, Inc. (9)*
10.15 Stock Option Agreement and Registration Rights Agreement between
PhoneTel Technologies, Inc. and George H. Henry dated March 24, 1992.
(5)*
10.16 Amendment No. 1 to Amended and Restated Loan Agreement and Registration
Rights Agreement dated October 23, 1992 by and among PhoneTel
Technologies, Inc., J & C Resources, Inc. and Allen Moskowitz. (6)*
10.17 Lease between PhoneTel Technologies, Inc. and Trembal Construction Co.
dba Statler Office Tower dated April 23, 1992. (6)*
10.18 Master Agreement between The Cafaro Company and PhoneTel Technologies,
Inc. dated December 23, 1992. (6)*
10.19 Operator Subscriber Service Agreement dated March 25, 1994 between U.S.
Long Distance, Inc. and Alpha Pay Phones-IV, L.P. (7)*
10.20 Non-Competition Agreement among PhoneTel Technologies, Inc., Alpha Pay
Phones-IV, L.P., American Telecommunications Management Corporation,
Stephen C. Fowler and Ronald T. Huggard dated January 5, 1994. (8)*
10.21 Stock Option Agreement for WEA Investments, Inc. relative to 50,000
shares of Common Stock under option dated on or about November 30,
1993. (8)*
10.22 Stock Option Agreement with Allenstown Investments Limited dated on or
about January 10, 1994 relative to grant of an option to purchase
126,000 shares of PhoneTel Technologies, Inc. Common Stock. (8)*
10.23 Stock Option Agreement with Douglas Abrams with respect to 45,000
shares of Common Stock of PhoneTel Technologies, Inc. dated on or about
January 10, 1994. (8)*
10.24 Amendment to Stock Option Agreement dated January 10, 1994 with Douglas
Abrams with respect to 45,000 shares of Common Stock of PhoneTel
Technologies, Inc. (9)*
10.25 Stock Option Agreement with William Moses, Jr. relative to 75,000
shares of Common Stock of PhoneTel Technologies, Inc. dated on or about
January 29, 1993. (8)*
10.26 Agreement dated January 5, 1994 between PhoneTel Technologies, Inc. and
the Estate of William Moses relative to a loan in the amount of one
million dollars and providing for warrants to purchase 100,000 shares
and contingent rights to acquire warrants to purchase 400,000 shares of
PhoneTel Technologies, Inc. Common Stock. (8)*
10.27 Agreement dated September 13, 1994 between PhoneTel Technologies, Inc.
and the Estate of William Moses relative to restructuring the repayment
schedule of certain monies owed by PhoneTel Technologies, Inc. and
providing for warrants to purchase 45,000 shares of PhoneTel
Technologies, Inc. Common Stock. (9)*
14
<PAGE> 15
10.28 Loan Agreement dated December 29, 1993 between PhoneTel Technologies,
Inc. and certain lenders identified therein with respect to borrowing
by PhoneTel Technologies, Inc. of $400,000 and the granting of warrants
to purchase, in the aggregate, a total of 62,745 shares of Common Stock
by PhoneTel Technologies, Inc. (8)*
10.29 Letter Agreement dated February 23, 1995 between PhoneTel Technologies,
Inc. and certain lenders identified therein with respect to the
extension of the maturity dates of certain promissory notes and the
granting of additional warrants to purchase Common Stock of PhoneTel
Technologies, Inc. (9)*
10.30 Stock Option Agreement dated March 3, 1994 between PhoneTel
Technologies, Inc. and George H. Henry relative to a grant of an option
to purchase 39,000 shares of PhoneTel Technologies, Inc. Common Stock.
(9)*
10.31 Stock Option Agreements dated in January 1994 between PhoneTel
Technologies, Inc. and George H. Henry granting options to purchase, in
the aggregate, a total of 106,551 shares of PhoneTel Technologies, Inc.
Common Stock. (9)*
10.32 Stock Option Agreement with George H. Henry dated in August 1993
relative to a grant of an option to purchase 150,000 shares of PhoneTel
Technologies, Inc. Common Stock. (9)*
10.33 Stock Option Agreement with Vincent Mann relative to 5,000 shares of
Common Stock under option dated November 15, 1994. (9)*
10.34 Stock Option Agreement with Donald Vella with respect to 20,000 shares
of Common Stock of PhoneTel Technologies, Inc. dated on or about
November 15, 1994. (9)*
10.35 Amendments to Warrant Agreements between PhoneTel Technologies, Inc.
and Richard Thatcher dated March 1995, and related Warrant Agreements
thereto, issued pursuant to a Letter Agreement dated February 23, 1995,
relative to the grant of warrants, in the aggregate, to purchase a
total of 49,412 shares of PhoneTel Technologies, Inc. Common Stock.
(9)*
10.36 Warrant Agreements with Richard Thatcher dated February, March and
April 1995, issued pursuant to a Letter Agreement dated February 23,
1995, relative to the grant of warrants, in the aggregate, to purchase
a total of 7,500 shares of PhoneTel Technologies, Inc. Common Stock.
(9)*
10.37 Amendments to Warrant Agreements between PhoneTel Technologies, Inc.
and Gerald Waldschutz dated March 1995, and related Warrant Agreements
thereto, issued pursuant to a Letter Agreement dated February 23, 1995,
relative to the grant of warrants, in the aggregate, to purchase a
total of 41,177 shares of PhoneTel Technologies, Inc. Common Stock.
(9)*
10.38 Warrant Agreements with Gerald Waldschutz dated February, March and
April 1995, issued pursuant to a Letter Agreement dated February 23,
1995, relative to the grant of warrants, in the aggregate, to purchase
a total of 6,250 shares of PhoneTel Technologies, Inc. Common Stock.
(9)*
10.39 Amendments to Warrant Agreements between PhoneTel Technologies, Inc.
and Steven Richman dated March 1995, and related Warrant Agreements
thereto, issued pursuant to a Letter Agreement dated February 23, 1995,
relative to the grant of warrants, in the aggregate, to purchase a
total of 41,177 shares of PhoneTel Technologies, Inc. Common Stock.
(9)*
10.40 Warrant Agreements with Steven Richman dated February, March and April
1995, issued pursuant to a Letter Agreement dated February 23, 1995,
relative to the grant of warrants, in the aggregate, to purchase a
total of 6,250 shares of PhoneTel Technologies, Inc. Common Stock. (9)*
15
<PAGE> 16
10.41 Amendments to Warrant Agreements between PhoneTel Technologies, Inc.
and Janice Fuelhart dated March 1995, and related Warrant Agreements
thereto, issued pursuant to a Letter Agreement dated February 23, 1995,
relative to the grant of warrants, in the aggregate, to purchase a
total of 49,412 shares of PhoneTel Technologies, Inc. Common Stock.
(9)*
10.42 Warrant Agreements with Janice Fuelhart dated February, March and April
1995, issued pursuant to a Letter Agreement dated February 23, 1995,
relative to the grant of warrants, in the aggregate, to purchase a
total of 1,250 shares of PhoneTel Technologies, Inc. Common Stock. (9)*
10.43 Amendments to Warrant Agreements between PhoneTel Technologies, Inc.
and Peter Graf dated in March 1995, and related Warrant Agreements
thereto, issued pursuant to a Letter Agreement dated February 23, 1995,
relative to the grant of warrants, in the aggregate, to purchase a
total of 148,235 shares of PhoneTel Technologies, Inc. Common Stock.
(9)*
10.44 Warrant Agreements with Peter Graf dated February, March and April
1995, issued pursuant to a Letter Agreement dated February 23, 1995,
relative to the grant of warrants, in the aggregate, to purchase a
total of 28,750 shares of PhoneTel Technologies, Inc. Common Stock.
(9)*
10.45 Stock Option Agreement dated May 24, 1994 between PhoneTel
Technologies, Inc. and the Estate of William D. Moses, and subsequent
assignment thereof dated February 2, 1995, relative to the grant of an
option to purchase 50,000 shares of PhoneTel Technologies, Inc. Common
Stock. (9)*
10.46 Stock Option Agreement dated September 13, 1994 between PhoneTel
Technologies, Inc. and the Estate of William D. Moses, and subsequent
assignment thereof dated February 2, 1995, relative to the grant of an
option to purchase 45,000 shares of PhoneTel Technologies, Inc. Common
Stock. (9)*
10.47 Warrant Agreement dated March 31, 1994 between PhoneTel Technologies,
Inc. and the Estate of William D. Moses, and subsequent assignment
thereof dated February 2, 1995, relative to the grant of warrants to
purchase 200,000 shares of PhoneTel Technologies, Inc. Common Stock.
(9)*
10.48 Agreement and Plan of Merger dated September 22, 1995, together with
Exhibits attached thereto, by and among PhoneTel Technologies, Inc.,
PhoneTel II, Inc. and World Communications, Inc. (10)*
10.49 Amendment to Agreement and Plan of Merger dated September 22, 1995 by
and among PhoneTel Technologies, Inc., PhoneTel II, Inc. and World
Communications, Inc. (10)*
10.50 Agreement and Plan of Merger dated October 16, 1995, together with
Exhibits attached thereto, by and among PhoneTel Technologies, Inc.,
PhoneTel II, Inc. and Public Telephone Corporation. (11)*
10.51 Agreement and Plan of Merger dated November 22, 1995, between PhoneTel
Technologies, Inc. and International Pay Phones, Inc., South Carolina
corporation, and all amendments thereto. (12)*
10.52 Agreement and Plan of Merger dated November 22, 1995, between PhoneTel
Technologies, Inc. and International Pay Phones, Inc., Tennessee
corporation, and all amendments thereto. (12)*
10.53 Share Purchase Agreement dated as of November 16, 1995, between
PhoneTel Technologies, Inc. and Paramount Communications Systems, Inc.,
and all amendments thereto. (12)*
10.54 Credit Agreement dated as of March 15, 1996 among PhoneTel
Technologies, Inc., Various Lenders and Internationale Nederlanden
(U.S.) Capital Corporation (the "Credit Agreement"). (12)*
16
<PAGE> 17
10.55 Security Agreement dated as of March 15, 1996 among PhoneTel
Technologies, Inc., Public Telephone Corporation, World Communications,
Inc., Northern Florida Telephone Corporation, Paramount
Communications Systems, Inc. and Internationale Nederlanden (U.S.)
Capital Corporation, as Agent for itself and certain other lenders.
(12)*
10.56 Warrant Purchase Agreement dated as of March 15, 1996 between PhoneTel
Technologies, Inc. and Internationale Nederlanden (U.S.) Capital
Corporation and Cerberus Partners, L.P. (12)*
10.57 Registration Rights Agreement dated as of March 15, 1996 between
PhoneTel Technologies, Inc. and Internationale Nederlanden (U.S.)
Capital Corporation and Cerberus Partners, L.P. (12)*
10.58 Warrant Certificate dated as of March 15, 1996 granting Internationale
Nederlanden (U.S.) Capital Corporation the right to purchase 102,412
shares of Series A Special Convertible Preferred Stock of PhoneTel
Technologies, Inc. (13)*
10.59 Warrant Certificate dated as of March 15, 1996 granting Cerberus
Partners, L.P. the right to purchase 102,412 shares of Series A Special
Convertible Preferred Stock of PhoneTel Technologies, Inc. (13)*
10.60 Form of Warrant issued on March 15, 1996 to persons listed on Schedule
A to this exhibit. (13)*
10.61 Operator Service Subscriber Agreement dated as of February 29, 1996 by
and between Intellicall Operator Services, Inc. and PhoneTel
Technologies, Inc. (13)*
10.62 Intellistar License Agreement dated as of February 29, 1996 by and
between Intellicall, Inc. and PhoneTel Technologies, Inc. (13)*
10.63 Relay Services Agreement dated as of February 29, 1996 by and between
Intellicall, Inc. and PhoneTel Technologies, Inc. (13)*
10.64 Stock Option Agreement dated April 1, 1995 between PhoneTel
Technologies, Inc. and Daniel J. Moos. (13)*
10.65 Separation Agreement dated July 29, 1996 between PhoneTel Technologies,
Inc. and Daniel J. Moos. (15)*
10.66 Employment Agreement dated September 1, 1996 between PhoneTel
Technologies, Inc. and Richard Kebert. (15)*
10.67 First Amendment to Credit Agreement dated as of April 11, 1996. (15)*
10.68 Second Amendment to Credit Agreement dated as of June 1996. (14)*
10.69 Third Amendment to Credit Agreement dated as of August 1, 1996. (14)*
10.70 Fourth Amendment to Credit Agreement dated as of September 13, 1996.
(14)*
10.71 Fifth Amendment to Credit Agreement dated as of September 13, 1996.
(14)*
10.72 Sixth Amendment to Credit Agreement dated as of October 8, 1996. (15)*
17
<PAGE> 18
10.73 Asset Purchase Agreement among PhoneTel Technologies, Inc., an Ohio
Corporation As Buyer and ACI-HDT Supply Company, a California
corporation, Amtel Communications Services, a California corporation,
Amtel Communications Correctional Facilities, a California corporation,
Amtel Communication, Inc., a California corporation, Amtel
Communications, Inc., a California corporation, and Amtel
Communications Payphones, Inc., a California corporation, as Seller,
dated June 26, 1996, and all amendments thereto. (14)*
10.74 Amended and Restated Share Purchase Agreement among PhoneTel III, Inc.,
Payphones of America, Inc. and All of the Shareholders of Payphones of
America, Inc., dated as of August 1, 1996, and all amendments thereto.
(14)*
10.75 Seventh Amendment to Credit Agreement dated as of November 22, 1996.
(16)*
10.76 Agreement and Plan of Merger dated as of November 21, 1996 among
PhoneTel Technologies, Inc., PhoneTel CCI, Inc., Cherokee
Communications, Inc. and all of the shareholders of Cherokee
Communications, Inc. (the "Cherokee Merger Agreement") (16)*
10.77 Escrow Agreement dated as of November 21, 1996 among Comerica
Bank-Texas, as escrow agent, Cherokee Communications, Inc., Bill H.
Bailey, Jr. and J. Bruce Duty, as duly authorized agents for all of the
shareholders of Cherokee Communications, Inc., PhoneTel Technologies,
Inc. and Bill H. Bailey, Jr., Jerry T. Beddow and Edward L. Marshall,
individually. (16)*
10.78 Amendment dated as of December 31, 1996 to the Cherokee Merger
Agreement. (17)*
10.79 Asset Purchase Agreement dated January 13, 1997, among PhoneTel
Technologies, Inc., an Ohio Corporation, Texas Coinphone, a Texas
general partnership, Pete W. Catalena and Dennis H. Goehring. (17)*
10.80 Agreement and Plan of Merger by and among PhoneTel Technologies, Inc.,
PhoneTel Acquisition Corp. and Communications Central Inc. dated as of
March 14, 1997. (19)*
21.1 Subsidiaries of PhoneTel Technologies, Inc. (19)*
27 Financial Data Schedule (19)*
-----------------
* Previously filed.
(1) Incorporated by reference from the Registration Statement on Form S-18
(Registration No. 33-16962C) of PhoneTel Technologies, Inc. (the
"Company"), filed with the Securities and Exchange Commission on
September 1, 1987.
(2) Incorporated by reference from Amendment No. 1 to the Company's
Registration Statement on Form S-1, Registration No. 33-30428, filed
September 27, 1989.
(3) Incorporated by reference from Amendment No. 1 to the Company's
Registration Statement on Form S-18 (Registration No. 33-16962C), filed
with the Securities and Exchange Commission on October 30, 1987.
(4) Incorporated by reference from the Company's Form 10-K for the year
ended December 31, 1989.
(5) Incorporated by reference from the Company's Form 10-K for the year
ended December 31, 1991.
18
<PAGE> 19
(6) Incorporated by reference from the Company's Form 10-KSB for the year
ended December 31, 1992.
(7) Incorporated by reference from the Company's Form 8-K dated March 25,
1994.
(8) Incorporated by reference from the Company's Form 10-KSB for the year
ended December 31, 1993.
(9) Incorporated by reference from the Company's Form 10-KSB for the year
ended December 31, 1994.
(10) Incorporated by reference from the Company's Form 8-K dated September
22, 1995.
(11) Incorporated by reference from the Company's Form 8-K dated October 16,
1995.
(12) Incorporated by reference from the Company's Form 8-K dated March 15,
1996.
(13) Incorporated by reference from the Company's Form 10-KSB for the year
ended December 31, 1995.
(14) Incorporated by reference from the Company's Form 8-K dated September
13, 1996.
(15) Incorporated by reference from the Company's Form 10-QSB for the
quarter ended September 30, 1996.
(16) Incorporated by reference from Amendment No. 2 to the Company's
Registration Statement on Form SB-2 (Registration No. 333-13767), filed
with the Securities and Exchange Commission on December 12, 1996.
(17) Incorporated by reference from the Company's Form 8-K dated January 3,
1997.
(18) Incorporated by reference from Amendment No. 2 to the Company's
Registration Statement on Form SB-2 (Registration No. 333-15611), filed
with the Securities and Exchange Commission on December 13, 1996.
(19) Incorporated by reference from the Company's Form 10-KSB for the year
ended December 31, 1996.
(B) REPORT ON FORM 8-K
There were no reports on Form 8-K filed by the Company during the
fourth quarter of 1996.
(C) EXHIBITS
The response to this portion of Item 13 is submitted as a separate
section of this report.
19
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Amendment Number 1 to its Annual Report for the
fiscal year ended December 31, 1996 previously filed on Form 10-KSB to be signed
on its behalf by the undersigned thereunto duly authorized.
PHONETEL TECHNOLOGIES, INC.
April 30, 1997 By: /s/ Peter G. Graf
----------------------
Peter G. Graf
Chairman of the Board and
Chief Executive Officer
