Exhibit c(2)
FORM OF NON-COMPETITION AGREEMENT
NON-COMPETITION AGREEMENT (this "Agreement"), dated as of March 14,
1997, by and between PhoneTel Technologies, Inc., an Ohio corporation
("Parent"), and _____________ ("Executive").
WHEREAS, Executive has heretofore served as ____________ of
Communications Central Inc., a Georgia corporation ("the Company");
WHEREAS, Parent and the Company have entered into an Agreement and
Plan of Merger (the "Merger Agreement"), dated as of March 14, 1997, pursuant
to which, as of the "Closing Date" (as such term is defined in the Merger
Agreement), PhoneTel Acquisition Corp., a Georgia corporation and wholly owned
subsidiary of Parent ("Sub"), will merge with and into the Company or the
Company will merge with and into Sub (the "Merger").
WHEREAS, the Company and Parent are in the business of owning,
leasing, operating and maintaining pay telephones;
WHEREAS, Parent recognizes that Executive possesses trade secrets and
confidential business information relating to the Company as well as knowledge
and experience relating to the pay telephone industry and desires to prevent
Executive from (1) competing with the pay telephone and inmate phone business
operated by Parent (or any subsidiary thereof), (2) soliciting the former,
current or future customers or employees of Parent (or any subsidiary thereof)
or (3) soliciting Parent to sell its assets (or the assets of any subsidiary
thereof);
WHEREAS, Parent has required Executive to enter into this Agreement as
a condition to entering into the Merger Agreement; and
WHEREAS, Executive is agreeable to restrictions on his ability to
compete against and solicit from Parent in accordance with the terms of this
Agreement;
NOW, THEREFORE, in consideration of the execution, delivery and
performance of the Merger Agreement, and mutual premises and covenants herein
and therein contained and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Parent and Executive hereby
agree as follows:
Section 1. Term. The term of this agreement shall commence on the date
hereof and continue for a period of five (5) years commencing upon the
consummation of the Merger (the "Term").
Section 2. Non-Competition. (a) Subject to and expressly conditioned
upon Parent's timely payment of all amounts due to Executive hereunder, for a
period of three (3) years commencing upon the consummation of the Merger,
neither Executive nor any member of his family shall, without the prior written
consent of Parent, directly or indirectly, own, operate, manage, be employed
by, be an agent of, act as a consultant for, financially support, lease
property to or from or have a proprietary interest in, any enterprise or
business which sells, leases, maintains, owns or operates pay telephones or
inmate phones in any part of the states in which Parent or the Company conducts
its business on the date hereof. Executive acknowledges that the business of
Parent and its affiliates will be conducted throughout such states and agrees
that such geographic scope is reasonable.
(b) Notwithstanding any provision to the contrary contained herein,
Executive shall not be prohibited from owning less than 2% of the outstanding
equity securities of any publicly-held corporation.
Section 3. Non-Solicitation. Executive agrees that, (a) during the
Term of this Agreement, he will not, directly or indirectly, (i) purchase or
otherwise acquire, or attempt to purchase or otherwise acquire, any of the
assets of Parent (or any subsidiary thereof) or (ii) persuade or attempt to
persuade customers, potential customers, suppliers or potential suppliers of
Parent and its affiliates to divert their pay telephone or inmate phone
business to any other entity or individual; (b) for a period of three years
commencing upon consummation of the Merger, he will not, directly or
indirectly, solicit, entice or persuade, or attempt to solicit, entice or
persuade, any employee of Parent or its affiliates (including employees of the
Company), or any client then
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under contract with Parent or any of its affiliates, to terminate his or her
employment by or contractual relationship with Parent or its affiliates or to
become employed by or to enter into contractual relations with a competitor of
Parent or its affiliates; and (c) for a period of one year commencing upon
consummation of the Merger, he will not, directly or indirectly, employ or
cause to be employed, any employee or consultant of Parent or its affiliates
(including employees of the Company).
Section 4. Confidentiality. Executive acknowledges that Parent would
be irreparably damaged if confidential information about Parent or its
affiliates were disclosed to or utilized on behalf of any person, firm,
corporation or other business organization which is in competition in any
respect with Parent or its affiliates. Executive covenants and agrees that he
will not at any time, and will cause his agents, affiliates and associates not
to at any time, without the prior written consent of Parent, disclose any such
confidential information, except to employees and authorized representatives of
Parent.
Section 5. Compensation; Taxes. In consideration for the agreements of
Executive contained herein, Parent agrees to pay or cause the Company to pay
Executive a total of $[ ], without interest, to be paid 50% upon consummation
of the Merger and 50% six months thereafter; provided, however, that if
Executive violates the terms of this Agreement, such second installment will be
withheld. The second installment shall be placed in escrow by Parent for the
benefit of Executive upon consummation of the Merger. Executive hereby
acknowledges that by virtue of this Agreement he is not and will not become an
employee of Parent. Executive further acknowledges his separate responsibility
for all federal and state withholding taxes, Federal Insurance Contribution Act
taxes and workers' compensation and unemployment compensation taxes, if
applicable, and agrees to indemnify and hold Parent harmless from any claim or
liability therefor.
Section 6. Necessity. Executive acknowledges that due to the
uniqueness of his skills and abilities and the uniqueness of the trade secrets,
confidential business lists, customer requirements and preferences, records and
information he possesses, the covenants set
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forth herein are reasonable and necessary for the protection of Parent.
Executive further acknowledges that enforcement of the covenants herein will
not deprive him of his ability to earn a livelihood.
Section 7. Specific Performance. Executive acknowledges that the
rights and privileges granted to Parent herein are of a special and unique
character, which gives them a peculiar value, the loss of which may not be
reasonably or adequately compensated for by damages in an action at law, and
that a breach by Executive of this Agreement will cause Parent irreparable
injury and damage. Accordingly, Executive hereby agrees that Parent shall be
entitled to remedies of injunction, specific performance or other equitable
relief, to prevent or cure a breach of this Agreement. This provision shall not
be construed as a waiver of any other rights or remedies Parent may have for
damages or otherwise.
Section 8. Partial Invalidity. The parties have entered into this
Agreement in good faith and for the reasons set forth in the recitals hereto
and assume and intend that this Agreement is legally binding. If, for any
reason, this Agreement is not binding because of its geographical scope or
because of its term, then the parties agree that this Agreement shall be deemed
effective for the widest geographical area and/or the longest period of time as
may be legally enforceable, it being understood that the compensation payable
hereunder is for the full Term and geographic area stated herein, and for all
the covenants of Executive. Any provision which is determined to be prohibited
or unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. The
provisions of this Section 8 shall not be construed as a waiver of any other
rights or remedies Parent may have for damages or otherwise.
Section 9. Binding Effect; Modifications. This Agreement shall be
binding upon and shall inure to the benefit of the personal representatives,
executors, administrators, successors and assigns of the parties to this
Agreement. This Agreement contains the entire agreement of the parties and
supersedes any and all prior written agreements between the parties, and all
prior and contemporaneous oral statements with respect to the transactions
contemplated hereby. This Agreement may not be changed or terminated orally,
but may only be changed
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by an agreement in writing signed by each of the parties hereto.
Section 10. Section Captions; Counterparts. Section and other captions
contained in this Agreement are for reference purposes only and are in no way
intended to describe, interpret, define or limit the scope, extent or intent of
this Agreement or any provision hereof. This Agreement may be executed in
counterparts, each of which, when so executed, shall be deemed to be an
original, and such counterparts shall, together, constitute and be one and the
same instrument.
Section 11. Governing Law. This Agreement shall be governed by and
construed under the laws of the State of New York, applied without giving
effect to any conflict of laws principles.
Section 12. No Rule of Construction. The parties acknowledge and agree
that no rule of construction shall apply to this Agreement which construes any
language, whether ambiguous, unclear or otherwise, in favor of or against any
party by reason of that party's role in drafting this Agreement.
Section 13. Notices. For the purposes of this Agreement, notices,
demands and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when delivered or (unless
otherwise specified) mailed by United States certified or registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to Parent:
PhoneTel Technologies, Inc.
000 Xxxxxxx Xxxxxx Xxxxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Chairman
If to Executive:
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or to such other address as each party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
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IN WITNESS WHEREOF, the undersigned parties have hereunto set their
hands as of the day and year first above written.
PHONETEL TECHNOLOGIES, INC.
By:
--------------------------------
Name: Xxxxx X. Xxxx
Title: Chairman and Chief
Executive Officer
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