Agreement under
Supplemental Executive Retirement Plan
THIS AGREEMENT MADE THIS ____ day of _____________________,
1997, by and between CT Communications, Inc., a corporation
organized under the State of North Carolina (hereinafter
referred to as "Employer"), and ___________________________,
an individual whose address is
_____________________________________________, and who
resides in the City of _______________________, County of
______________, and State of
____________________________(hereinafter referred to as
"Employee").
WITNESSETH
WHEREAS, the Employer currently employs the Employee, and
the Employee serves the Employer in such capacity as the
Board of Directors of the Employer may designate from time
to time; and
WHEREAS, the Employee currently devotes all of his time,
attention, skill and efforts to the performance of duties on
behalf of the Employer; and
WHEREAS, in consideration of services rendered on behalf of
the Employer and as an inducement for ongoing valuable
services until retirement, the Employer has agreed to
provide a deferred compensation benefit to the Employee; and
WHEREAS, the intent of this deferred compensation agreement
(hereinafter referred to as the "Agreement") is to provide
from this Agreement, the Concord Telephone Company Pension
Benefit Plan, and Social Security, an aggregate income
replacement ratio of 60% of the Employee's pre-retirement
Average Compensation (paid in the form of a single life
annuity and calculated at no more than 20 Years of Service);
NOW THEREFORE, in consideration of the Agreement and mutual
promises hereinafter contained, the parties hereto agree to
the following:
Article I
DEFINITIONS. The following definitions shall govern this
Agreement:
1. ACCRUED BENEFIT means the accrued benefit of the
Employee determined under Article III expressed in
terms of an annual single life annuity beginning at or
after the date he attains Normal Retirement Age on the
basis of his years of Creditable Service to the date as
of which the computation is made.
2. AGE means the Employee's age at the nearest birthday,
except as otherwise specifically provided.
3. ANNIVERSARY DATE means the date of this Agreement and
each anniversary thereof.
4. AVERAGE COMPENSATION means the average of the
Employee's annual Benefit Compensation for the five
consecutive Years of Service that produce the highest
average. The partial Plan Year that includes the
Employee's retirement date or other termination date
may be included if it results in a higher average. If
the Employee does not have at least five consecutive
Years of Service, all of his Years of Service will be
included in determining his Average Compensation.
5. BENEFICIARY means the person designated in writing by
the Employee to receive any benefits due the Employee
upon his death. If no such designation is made or if
the designated person is not living at the death of the
Employee, the Beneficiary shall be the deceased
Employee's spouse, if living; if the Employer is not
survived by a spouse, the Beneficiary shall be his
estate.
6. BENEFIT COMPENSATION means the remuneration received by
the Employee from the Employer as basic salary or
wages, and annual incentive bonuses (that may be
comprised of cash and/or stock components). Benefit
Compensation does not include income derived from long-term
incentive arrangements, including but not limited
to the Employer's long-term incentive plans or plans
that provide the Employee benefits in the form of cash,
restricted stock or stock options. Benefit
Compensation includes any salary deferral amounts the
Employee elects to contribute to the Employer's
retirement savings plan under Internal Revenue Code of
1986 (the "Code") section 401(k) or cafeteria plan
under Code section 125, if any; but excludes the cost
or value of benefit programs in which the Employee may
participate (such as group insurance (but excluding the
Employee's executive life insurance, if any),
disability, hospitalization, sick pay, perquisites, or
similar benefits), special cash awards or stock
received outside the Employer's normal programs, income
derived from the exercise of stock options and/or the
receipt of restricted stock, the cost of benefits under
this Agreement, the value of job perquisites treated as
income and any other payments or benefits not usually
regarded as pay for service.
7. BOARD OF DIRECTORS means the Board of Directors of the
Employer.
8. COMMITTEE means the Compensation Committee of the Board
of Directors or such other Committee as may be
appointed by the Board of Directors to administer this
Plan pursuant to Article II.
9. CREDITABLE SERVICE means all of the Employee's Years of
Service, up to age 65 (including all periods up to a
maximum of 35 months during which the the Employee has
received cash benefits pursuant to a Change-of-Control
Agreement). Creditable Service shall be used in
calculating the Employee's Accrued Benefit under the
Plan. If the Employee terminates his employment with
the Employer and receives all of his vested Accrued
Benefit under the Plan and later is re-employed by the
Employer, his service before he left the Employer will
not be counted in determining his Creditable Service.
10. DISABILITY means the inability of the Employee to
engage in his profession by reason of any medically
determinable physical or mental impairment which can be
expected to result in death or which is to last or can
be expected to last for a continuous period of not less
than twelve months, as determined by the Plan
Administrator in its sole discretion upon certification
thereof by a qualified physician selected by the Plan
Administrator after such physician examines the
Employee.
11. DISABILITY RETIREMENT DATE means the date the Committee
establishes as the date the Employee may retire because
of the Employee's Disability.
12. EARLY RETIREMENT AGE means the date the Employee
attains age 55.
13. EFFECTIVE DATE means the date of this Agreement, unless
the Employer specifies otherwise.
14. EMPLOYER means CT Communications, Inc. In the case of
a group of employers that constitute a controlled group
of corporations (as defined in Section 414(b) of the
Internal Revenue Code of 1986, as amended) or that
constitutes trades or businesses that are under common
control (as defined in Section 414(c) of the Internal
Revenue Code of 1986, as amended), all such employers
shall be considered a single Employer.
15. NORMAL RETIREMENT AGE means the date the Employee
attains age 65 if the Employee was born in 1937 or
before; the date the Employee attains age 66, if the
Employee was born between 1938 and 1954; and the date
the Employee attains age 67 if the Employee was born in
1955 or later.
16. NORMAL RETIREMENT DATE means the first day of the first
month beginning on or after the date the Employee
attains Normal Retirement Age.
17. PENSION PLAN means the Concord Telephone Company
Pension Benefit Plan, as amended from time to time.
18. PLAN means the Employer's Supplemental Executive
Retirement Plan, which is comprised of this Agreement
and similar agreements between the Employer and other
executives employed by the Employer, wherein the
Employer agrees to provide supplemental retirement
benefits to such executives to supplement their Pension
Plan and Social Security benefits.
19. PLAN YEAR means the twelve consecutive month period
beginning January 1 and ending December 31.
20. SOCIAL SECURITY PRIMARY INSURANCE AMOUNT means an
annual amount calculated according to the rules for
computing the "Primary Insurance Amount" under the
Federal Social Security Act as in effect at the time
the Employee retires or terminates employment. The
Committee, at its discretion, reserves the right to
revise or amend the definition of "Primary Insurance
Amount" should the federal Social Security Act reduce
the Employee's projected Social Security benefit
subsequent to the adoption of the Plan. In determining
this amount, the Employee's actual earnings shall be
used for calendar years through the year preceding the
date of termination, to the extent such information is
available. For years beginning with the date of
termination and through the calendar year during which
the Employee attains his Normal Retirement Age, it will
be assumed that the Employee continues to earn
compensation based on his compensation rate on the date
of termination.
21. YEAR OF SERVICE means a Plan Year in which the Employee
remains a participant in the Plan, at the Committee's
discretion and with the approval of the Board of
Directors, and completes 1000 or more hours of service
(as determined under the Pension Plan). For service
completed before January 1, 1976, a Year of Service is
a twelve month period of service, taking into account
all periods of service without loss of credit for
termination of service. Service before January 1, 1976
will be counted only if the Employee was employed by
the Employer on January 1, 1976. The Employee shall
not receive credit for a Year of Service during periods
of Disability.
Article II
ADMINISTRATION. The Committee shall be the Plan
Administrator. The Plan Administrator shall be responsible
for administering the Plan. The Plan Administrator shall
have all of the powers necessary to enable it to properly
carry out its duties under the Plan. Not in limitation of
the foregoing, the Plan Administrator shall have the power
to construe and interpret the Plan and to determine all
questions that shall arise thereunder. The Plan
Administrator shall have such other and further specified
duties, powers, authority and discretion as are elsewhere in
the Plan either expressly or by necessary implication
conferred upon it. The Plan Administrator may appoint such
agents as it may deem necessary for the effective
performance of its duties, and may delegate to such agents
such powers and duties as the Plan Administrator may deem
expedient or appropriate that are not inconsistent with the
intent of the Plan. The decision of the Plan Administrator
upon all matters within its scope of authority shall be
final and conclusive on all persons, except to the extent
otherwise provided by law.
Article III
ELIGIBILITY. Only those executives of the Employer who have
been identified by the Committee and approved by the Board
of Directors as participants in the Supplemental Executive
Retirement Plan, shall be eligible to participate in the
Plan. The Board of Directors, at its sole discretion, may
determine that the Employee is no longer eligible to
participate in the Plan due to demotion, change in duties,
or other circumstance. Loss of eligibility shall freeze the
Employee's Accrued Benefit in the Plan, if vested, based on
the accrued pension benefit from the Pension Plan and
projected Social Security Primary Insurance Amount, in each
case determined as of date the Employee ceases to
participate in the Plan.
VESTING. The Employee shall be 100% vested in his Accrued
Benefit, as determined under Article III, after five Years
of Service following the Effective Date, subject to the
forfeiture provisions of Article VII and VIII. The Employee
shall have no vested interest in his Accrued Benefit under
the Plan prior completing five Years of Service.
Article IV
NORMAL RETIREMENT BENEFIT. The Employee shall be entitled
to receive an annual retirement benefit commencing on his
Normal Retirement Date in an amount equal to (A) less (B)
less (C), where:
(A) is 3% of the Employee's Average Compensation
multiplied by his years of Creditable Service up to,
but not exceeding, 20 years; and
(B) is the Employee's Social Security Primary
Insurance Amount accrued to the Employee's actual date
of retirement from the Employer; and
(C) is the Employee's accrued pension benefit from the
Pension Plan, calculated in the form of a single-life
annuity, at the Employee's actual date of retirement
from the Employer.
EARLY RETIREMENT BENEFIT. If the Employee retires from
service with the Employer prior to the Employee's Normal
Retirement Age and on or after attainment of the Employee's
Early Retirement Age, the Employee shall be entitled to
receive an annual retirement benefit commencing on or after
such date of retirement (the "early retirement date") in an
amount equal to (a) less (b) less (c), where:
(a) is 3% of the Employee's Average Compensation
multiplied by his years of Creditable Service up to,
but not exceeding, 20 years, actuarially reduced for
early retirement as described hereafter; and
(b) is the Employee's Social Security Primary
Insurance Amount, reduced to retirement at age 65; and
(c) is the Employee's accrued pension benefit from the
Pension Plan, calculated in the form of a single-life
annuity, at the actual date of the Employee's
retirement from the Employer actuarially reduced for
early retirement as described hereafter.
The Employee may choose to retire from the service of the
Employer and receive an early retirement benefit at any time
after reaching his Early Retirement Age, following at least
60 days written notice to the Employer and if approved by
the Committee. The 20 year service requirement present in
the Pension Plan shall not be considered for the purposes of
this Plan. However, five Years of Service are required to
vest in any benefit from this Plan.
An Employee may elect in writing for payment of his Early
Retirement Benefit to begin as of the first day of any
calendar month coinciding with or next following his early
retirement date. The Employee's Early Retirement Benefit
will equal his Accrued Benefit determined as of his early
retirement date. If the Employee elects payments to begin
before his Normal Retirement Date, his Early Retirement
Benefit will equal his Accrued Benefit as of his early
retirement date, reduced by 1/180th for each of the first 60
months and 1/360th for each of the next 60 months that the
starting date of the Early Retirement Benefit precedes his
Normal Retirement Date.
DISABILITY BENEFIT. If the Employee has a vested benefit in
the Plan as described in Article III and becomes disabled
while he is employed by the Employer, he may retire as of
his Disability Retirement Date. The Board of Directors may
require the Employee to be medically examined from time to
time to confirm that his Disability is continuing. If the
Committee finds that he has recovered from his Disability,
his disability benefits will stop, and he will be deemed to
have terminated service as of his Disability Retirement
Date.
An Employee's disability benefit will begin as of the first
day of the month following his Disability Retirement Date
and will equal his Accrued Benefit as of his Disability
Retirement Date, reduced by 1/180th for each of the first 60
months and 1/360th for each of the next 60 months that the
starting date of the disability benefit precedes his Normal
Retirement Date.
If the Employee is entitled to benefits under an insured
long-term disability program sponsored by the Employer,
payment of his disability benefit under the Plan will be
delayed until payment of the insured long-term disability
benefits ends. Creditable Service is not accrued during
periods of long-term disability under this Plan. If the
Employee is living at the time payment of his insured
disability benefit ends, he will receive his Accrued Benefit
determined as of his disability retirement date, increased
by one percent (1%) for each Plan Year that occurs between
his disability retirement date and the date payment to the
Employee actually begins. The disability benefit will be
reduced in the same manner as described in the preceding
paragraph if payments start before the Employee's Normal
Retirement Date.
DEATH BENEFIT. If the Employee is married and dies with a
vested benefit under the Plan before his benefit payments
have begun, his surviving spouse will be entitled to receive
a monthly death benefit. The monthly amount of the death
benefit will be based on the amount of the Employee's vested
Accrued Benefit on the date of his death, regardless of
whether the Employee is then eligible to retire. If the
Employee is not eligible for early or normal retirement when
he dies, his Beneficiary, will be entitled to receive
approximately equal monthly installments (actuarially
adjusted for the life expectancy of the Beneficiary) in an
amount determined as if the Employee terminated employment
on the date of his death, survived to his Early Retirement
Age, and then died the next day.
If the Employee is eligible for early or normal retirement
on the date of his death, but his benefit payments have not
started, his Beneficiary, will be entitled to receive
approximately equal monthly installments (actuarially
adjusted for the life expectancy of the Beneficiary) in an
amount determined as if he had retired on the date of his
death, and then died the next day.
If the Employee is not married on the date of his death, any
vested benefits will be actuarially adjusted to the value of
a life annuity determined at the Employee's age at date of
death, and paid to the Beneficiary (actuarially adjusted for
the life expectancy of the Beneficiary).
Article V
ACCRUAL OF BENEFITS. The Employer shall accrue the benefits
payable under this Plan in a separate account on its books.
The Employer may use any reasonable accounting policy in
determining the method of this accrual. The account
established hereunder shall be segregated from other
accounts on the books and records of the Employer as a
contingent liability of the Employer to the Employee and
other employees participating in the Plan.
Article VI
GENERAL CREDITOR. The Employee shall be regarded as a
general creditor of the Employer with respect to any rights
derived by the Employee from the existence of this Agreement
or the existence or amount of the liability.
ASSETS. Title to and beneficial ownership of any assets,
whether cash, investments, life insurance policies, or other
assets that the Employer may intend to use to pay the
contingent deferred compensation hereunder, shall at all
times remain with the Employer. The Employee and his
Beneficiary shall not have any property interest whatsoever
in any specific assets of the Employer.
Article VII
PAYMENT OF DEFERRED COMPENSATION TO THE EMPLOYEE. The
benefits to be paid as deferred compensation to the Employee
(unless forfeited by the occurrence of any of the events of
forfeiture specified in Article VII) are as follows:
* Upon termination of the Employee's employment on or after
the Employee attains his Early Retirement Age, the
Employer shall pay to Employee in the form of a single
life annuity, in equal monthly installments, an amount
equal to his Accrued Benefit. The Committee is under no
obligation to purchase an annuity, except at its sole
discretion.
* In the event that the Employee's employment terminated
with the Employer by reason of death with a vested
benefit, or disability before reaching Early Retirement
Date, and while in the employ of the Employer, the
Employer shall make monthly payments to the Employee (in
the event of Disability) or the Employee's designated
Beneficiary (in the event of the Employee's death) in the
manner described in Article III of this Agreement.
* In the event that the Employee's employment with the
Employer is terminated for any reason other than the
Employee's retirement, on or after the Employee's Early
Retirement Age, death or Disability, the entire Accrued
Benefit established hereunder shall be forfeited by the
Employee.
OPTIONAL FORMS. Any amounts payable to the Employee
hereunder shall be deemed to have been paid if the Employer
decides to purchase and distribute to the Employee an
immediate or deferred annuity contract, on the single life
of the Employee, or any optional form of annuity then
available under the Pension Plan. The Committee, at its
sole discretion, may approve any other form of annuity as
requested by the Employee.
LUMP SUM. The Committee may recommend to the Board of
Directors, and the Board of Directors by resolution
specifically referring to this Agreement and the date hereof
may provide, that the payment of the Employee's entire
Accrued Benefit hereunder be made in the form of a single
lump-sum payment, or any other schedule of installment
payments.
FACILITY OF PAYMENTS. If, in the sole opinion of the
Committee, any person entitled to payment under this
Agreement shall be too physically or mentally incapacitated
to properly receive such payments, the Employer may make
such payments to any member of the family of such person
then entitled to payment, or for the use and benefit of such
person, or to any person or institution providing care for
such person then entitled to such payments. All payments so
made by the Employer shall fully discharge and acquit the
Employer to the amounts thereof.
INCOME TAX OR OTHER WITHHOLDING. The Employer may withhold
from any benefits payable under this Agreement (i) all
federal, state, city, or other taxes, or (ii) all
distributions required under any domestic relations order or
divorce decree as shall be required pursuant to any law,
government regulation or ruling, or court order.
Article VIII
FORFEITURE PROVISIONS. All rights to any deferred
compensation payments pursuant to this Agreement, including
the payment of any unpaid installments, shall be immediately
forfeited by the Employee if any of the following events
occur:
1. The Employer-Employee relationship between the Employee
and the Employer is terminated at the behest of the
Employer or upon the mutual Agreement thereof between
the Employee and Employer (other than on account of the
Employee's retirement, death or Disability).
2. The Employee resigns without the consent of the
Employer or the Board of Directors, even though the
Employee is vested in a benefit.
3. The Employee engages in any act that, in the opinion of
the Committee, is inimical to the best interests of the
Employer, including, but not limited to fraud,
embezzlement, non-productivity, disloyalty, etc. The
judgment of the Committee, as expressed by a majority
vote, shall be final as to the determination of the
nature of any acts performed by the Employee that are
subject to this Article VIII. The Committee, in its
sole discretion, may interpret and decide upon the
nature of such acts.
4. Following the Employee's retirement from employment
with the Employer, the Employee refuses to provide
advice or counsel to the Employer when reasonably
requested to do so and when reasonably able to do so;
or,
5. The Employee is in violation of an executed noncompete
agreement.
Article IX
LIABILITY OF EMPLOYER. Nothing in this Agreement shall
constitute the creation of a trust or other fiduciary
relationship between the Employer and the Employee or
between the Employer and the Beneficiary or any other
person. The Employer shall not be considered a trustee by
reason of this Agreement.
Article X
ASSIGNMENT. No rights under this Agreement may be
assigned, transferred, pledged or encumbered by the Employee
or the Beneficiary except by will or by North Carolina
intestate laws or other laws of descent and distribution.
This Agreement may be assigned by the Employer only upon the
following events:
1. The Employer or its assets are purchased by another
entity or are merged into the assets of another entity.
2. Prior written consent of the Employee.
Article XI
AGREEMENT BINDING. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their
respective next of kin, successors, assigns, heirs, personal
representatives, executors, administrators, and legatees.
The Employer shall not merge or consolidate with any other
entity or reorganize unless and until such succeeding and
continuing entity agrees to assume and discharge the
obligations of the Employer under this Agreement. Upon such
assumption, the term Employer as used in this Agreement
shall be deemed to refer to such successor Employer. The
Board of Directors, at its sole discretion, reserves the
right to amend, revise, or terminate this Agreement with
respect to future benefits.
Article XII
ENTIRE AGREEMENT. This document constitutes the entire
Agreement between the parties as to the provision of
supplemental retirement benefits by the Employer to the
Employee. This Agreement may only be modified, altered, or
amended by prior written approval and consent of the parties
with respect to Accrued Benefits, except those provisions
that may be amended solely by a Board of Directors
resolution as described in this Agreement.
Article XIII
NO GUARANTEE OF EMPLOYMENT. Nothing in this Agreement shall
be construed as guaranteeing future employment to the
Employee. The Employee continues to be an Employee of the
Employer solely at the will of the Employer, notwithstanding
this Agreement.
Article XIV
BENEFITS HEREUNDER ARE NOT "COMPENSATION" FOR OTHER
PURPOSES. Any deferred compensation payable under this
Agreement (or actuarial or the net present value of any such
payments) shall not be deemed salary or other compensation
to the Employee for purposes of any qualified retirement
plans maintained by the Employer, any incentive bonus plans,
or for purposes of any other fringe benefit obligations of
the Employer.
Article XV
CLAIMS SUBMISSION AND REVIEW PROCEDURE. In the event that a
Employee has a claim under the Plan, such claim shall be
made by the Employee's filing a notice thereof with the Plan
Administrator within ninety (90) days after such Employee
first has knowledge of such claim. Each Employee who has
submitted a claim to the Plan Administrator shall be
afforded a reasonable opportunity to state such Employee's
position and to present evidence and other material relevant
to the claim to the Plan Administrator for its consideration
in rendering its decision with respect thereto. The Plan
Administrator shall render its decision in writing within
ninety (90) days after the claim is referred to it, unless
special circumstances require an extension of such time
within which to render such decision, in which event such
decision shall be rendered no later than one hundred eighty
(180) days after the claim is referred to it. A copy of
such written decision shall be furnished to the Employee.
1. Notice of Decision of Plan Administrator. Each
Employee whose claim has been denied by the Plan
Administrator shall be provided written notice thereof,
which notice shall set forth:
a) the specific reason(s) for the denial;
b) specific reference to pertinent provision(s) of
the Plan upon which such denial is based;
c) description of any additional material or
information necessary for the Employee to perfect
such claim and an explanation of why such material
or information is necessary; and
d) an explanation of the procedure hereunder for
review of such claim; all in a manner calculated
to be understood by such Employee.
2. Review of Decision of Plan Administrator. Each
such Employee shall be afforded a reasonable opportunity for
a full and fair review of the decision of the Plan
Administrator denying the claim. Such review shall be by
the Board of Directors. Such appeal shall be made within
ninety (90) days after the Employee received the written
decision of the Plan Administrator and shall be made by the
written request of the Employee or such Employee's duly
authorized representative. In the event of appeal, the
Employee or such Employee's duly authorized representative
may review pertinent documents and submit issues and
comments in writing to the Board of Directors. The Board of
Directors shall review the following:
A) the initial proceedings of the Plan Administrator
with respect to such claim;
B) such issues and comments as were submitted in
writing by the Employee or the Employee's duly
authorized representative ; and
C) such other material and information as the Board of
Directors, in its sole discretion, deems advisable for
a full and fair review of the decision of the Plan
Administrator.
The Board of Directors may approve, disapprove or modify the
decision of the Plan Administrator, in whole or in part, or
may take such other action with respect to such appeal as it
deems appropriate. The decision of the Board of Directors
with respect to such appeal shall be made promptly, and in
no event later than sixty (60) days after receipt of such
appeal, unless special circumstances require an extension of
such time within which to render such decision, in which
event such decision shall be rendered as soon as possible
and in no event later than one hundred twenty (120) days
following receipt of such appeal. The decision of the Board
of Directors shall be in writing and in a manner calculated
to be understood by the Employee and shall include specific
reasons for such decision and set forth specific references
to the pertinent provisions of the Plan upon which such
decision is based. The Employee shall be furnished a copy
of the written decision of the Board of Directors. No member
of the Board of Directors shall be liable to any person for
any action taken hereunder except those actions undertaken
with lack of good faith.
3. Arbitration of Interpretations and Constructions. The
interpretations and construction hereof by the Board of
Directors shall be binding and conclusive on all persons and
for all purposes. Any disagreements about such
interpretations and construction shall be submitted to an
arbitrator subject to the rules and procedures established
by the American Arbitration Association. The arbitrator
shall be acceptable to both the Employer and the Employee;
if the parties cannot agree the disagreement shall be heard
by a panel of three arbitrators, with each party to appoint
one arbitrator and the third to be chosen by the other two.
The decision of the arbitrator(s) decision shall be final
and conclusive upon all persons interested therein, except
to the extent otherwise provided by applicable law.
GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the laws of the State of
North Carolina, except to the extent such laws are preempted
by federal laws and regulations.
CONSTRUCTION. The masculine gender shall include the
feminine, and the singular the plural, unless the context
clearly requires otherwise.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
CT COMMUNICATIONS, INC.
_____________________________________
Name:
Title:
Witnesses ACKNOWLEDGED:
___________________________ _____________________________________
Employee
___________________________