EXHIBIT 10.2
CT COMMUNICATIONS, INC.
EMPLOYMENT AGREEMENT
DAVID ARMISTEAD
November 14, 2003
This Employment Agreement outlines the key terms and conditions of CT
Communications, Inc.'s (CTC's) offer being extended to you. Please note the
following information:
GENERAL
Position Title: General Counsel and Corporate Secretary
- --------------
Start Date: January 5, 2004
- ----------
Reporting To: Mike Coltrane, President and CEO
- ------------
Duties: Such services and duties required of the
- ------ position of General Counsel and Corporate
Secretary or such other positions,
assignments, services and duties as
management may from time to time designate
in the absolute and sole discretion of the
Company.
Next Review Date: January 1, 2005 following start date and
- ---------------- January 1st thereafter.
COMPENSATION Compensation package includes a combination
of base salary, annual and long-term
incentive, signing bonus and other
allowances and perquisites as follows:
Base Salary: $13,750 monthly (equivalent to $165,000 per
- ----------- year), less applicable deductions required by
law.
Annual Incentive Bonus: The General Counsel and Corporate Secretary
- ---------------------- is eligible to participate in CTC's Executive
Annual Incentive Plan, based upon a
combination of CTC corporate operational and
financial objectives. Objectives are
weighted based upon their level of
importance to the Company. Pursuant to
current Plan terms, the General Counsel and
Corporate Secretary qualifies for an annual
payout potential of 15% at gate, 35% at
target, and 70% at stretch. Payout
percentages are applied to an executive's
annualized base salary. Actual payouts
currently consist of a combination of cash
(75%) and restricted common stock (25%) and
are paid as soon as practical following the
end of the plan year, if and as eligible.
Your effective date of participation in the
Annual Incentive Plan will be January 1,
2004.
Long Term Incentive Bonus: In addition to the Executive Annual Incentive
- ------------------------- Plan referenced above, the General Counsel and
Corporate Secretary is generally eligible to
participate in the Executive Long-Term
Incentive Plan, based upon corporate
financial objectives. Current long-term
incentive cycles are three years in
duration, as set forth in the Company's
2003-2005 Long-Term Incentive Plan (the
"2003 LTIP"). Pursuant to the 2003 LTIP, the
General Counsel and Corporate Secretary
qualifies for a long-term plan payout
potential totaling 30% at gate, 50% at
target, and 100% at stretch. Payout
percentages are applied to an executive's
annualized base salary, effective the end of
December of the last year in the three-year
cycle. Actual payouts currently consist of a
combination of cash, restricted common stock
and nonqualified stock options and are paid
as soon as practical following the end of
the last year in the applicable three-year
cycle, if and as eligible.
Your effective date of participation in the
nonqualified stock option portion of the
LTIP will be January 1, 2004. Your effective
date of participation in the cash and
restricted stock portion of the LTIP will be
the first day of the calendar month
following your date of employment. The first
two years of eligibility in the cash and
restricted stock portion of the LTIP are
prorated based upon the length of time
covered during the period.
Signing Bonus: * $25,000 less applicable taxes. A prorated
- ------------- portion is payable back to the Company if
termination occurs within the first 12
months following employment date.
* 4000 shares of CTC restricted stock with
2000 shares vesting January 1, 2005 and 2000
shares vesting January 1, 2006.
Car Allowance: $666.67 monthly (equivalent to $8,000 per
- ------------- year), less applicable deductions required by
law.
Relocation: $60,000 to be advanced as needed for
- ---------- relocation expenses. A prorated portion is
subject to repayment if employment is
terminated within first 12 months following
employment date.
EXECUTIVE BENEFITS
Enhanced Benefits: The General Counsel and Corporate Secretary
- ----------------- is eligible to participate in enhanced life
insurance, short-term disability and
long-term disability benefits provided by
CTC. The current life insurance benefit is a
Company owned whole life policy that
provides a death benefit based upon
predetermined levels of coverage. Executives
elect a beneficiary of their choosing and
have limited tax liability. The current LTD
benefit is intended to supplement the
standard Company policy to provide 70% of
total
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cash compensation (base salary + cash
portion of incentive bonus award) in the
event of disability.
Excess Plan: The General Counsel and Corporate Secretary
- ----------- is eligible to participate in the Company's
Executive Nonqualified Excess Plan ("Excess
Plan"). Pursuant to current terms, the
Excess Plan is a nonqualified savings
program offered to Executives that operates
in similar fashion to the Company's 401(k)
Plan. The Plan allows Executives the
opportunity to make additional pretax
contributions over and above what they could
contribute through a 401(k) Plan alone. The
Excess Plan also provides an enhanced
employer matching contribution over and
above what is provided through the 401(k)
Plan.
STANDARD EMPLOYEE BENEFITS
Group Insurance: Health Insurance (Rate based upon plan choice)
- --------------- Dental Insurance (Rate based upon plan choice)
Basic Life Insurance (1.5 x base salary up to
$300,000 max)
Supplemental Life (Up to 4 x base salary
subject to plan provisions)
Dependent Life (Company provided and optional)
AD&D (1.5 x base salary up to $300,000 max)
Voluntary AD&D (optional coverage for employee
and family)
Except where otherwise enrolled as a
participant, group insurance benefits
generally commence at the beginning of the
calendar month following 60 days of
employment.
Vacation: Four weeks per year, pursuant to Company
- -------- policy.
Personal Days: Two days per year, pursuant to Company policy.
- -------------
Holidays: Nine days per year, pursuant to Company policy.
- ---------
SAVINGS AND RETIREMENT BENEFITS
Savings Plus Plan (401k): Qualified plan with current scheduled and
- ------------------------ supplemental matching contributions.
Retirement Plan: Qualified retirement plan provided by the
- --------------- Company.
Employee Stock Purchase Plan: Voluntary plan offering after-tax employee
- ---------------------------- contributions through payroll deductions.
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ADDITIONAL INFORMATION
The above outline of general position terms is applicable only during your
employment with CTC. The amount, existence and extent of your base compensation
and car allowance and the procedure for compensating you may be modified at any
time by (a) mutual agreement of the Company and you; or (b) the Company without
your consent upon advance notice to you. In addition, except where otherwise set
forth above or currently enrolled as a participant, your ability to qualify for,
participate in and receive potential payments and benefits under CTC's
incentive, benefits, retirement, stock and other programs referenced above is
subject to the applicable terms and conditions of those plans as they may be
established, modified, amended, replaced or eliminated from time to time in the
absolute and sole discretion of the Company, with or without advance notice.
Nothing in this Agreement or in any prior or subsequent communications to you
shall in any way create an express or implied employment contract with you for a
specific term. Rather, your employment with CTC is and will be at the will of
the Company, and you, in turn, may likewise leave your employment with CTC at
any time.
- --------------------------------------------------------------------------------
Preconditions to Agreement: This offer is contingent upon your review and
- -------------------------- simultaneous signing of a Confidentiality/
Change In Control/Non-Compete Agreement and
your successful completion of a drug test.
- --------------------------------------------------------------------------------
Signed:
/s/ David Armistead 11/14/03 /s/ Richard L. Garner, Jr. 11/14/03
- ---------------------------------- ------------------------------------
David Armistead Date Richard L. Garner, Jr. Date
CT Communications, Inc.
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