Exhibit 10.2
CT Communications, Inc.
Employment Agreement
Xxxxxxx Xxxx
MAY 15, 2002
This Employment Agreement summarizes the terms of the offer of employment CT
Communications Inc. ("the Company") is extending to you:
- Position Title: Senior Vice President CTC/CEO Wavetel-thru 12/2003
Senior Vice President CTC-effective 01/2004
- Start Date: May 15, 2002
- Reporting To: Xxxxxxx Xxxxxxxx, President and CEO
COMPENSATION
- Base Salary: $260,000 annually; $21,667.00 per month
- Annual Incentive Bonus: The Senior Vice President is eligible to
participate in an annual incentive bonus plan that is tied to the attainment of
corporate objectives. Objectives are weighted based upon their level of
importance to the Company. The Senior Vice President position qualifies for an
annual payout potential of 20% at gate, 50% at target and 100% at stretch.
Payout percentages are applied to the executive's annualized base salary.
Actual payouts consist of a combination of cash and restricted common stock and
are paid as soon as practical following the end of the year. First year
eligibility is prorated based upon length of time covered during the period.
For 2002, Xx. Xxxx will transition from his current annual incentive program
with Wavetel to the Company's annual incentive plan, as modified hereunder to
reflect the agreed upon terms during the transition period. Xx. Xxxx'x
participation in the Company's annual incentive plan will begin July 1, 2002,
with the annual incentive plan transition for 2002 based on corporate goals and
prorated to reflect the period of time during the year that he is a participant
in the plan. Payout potential under this transition plan is equal to 70% of
base salary at gate, 100% at target and 140% at stretch. It will be paid on a
quarterly basis during the third and fourth calendar quarters of 2002. The
third quarter payment will be an advance of up to 50% of eligible salary at
target. The fourth quarter payment will be based on actual year-end results and
will take into account the bonus dollars paid as the third quarter advance. Xx.
Xxxx'x participation in Wavetel's annual incentive plan will terminate as of
June 30, 2002, with the benefits under such plan for 2002 prorated to reflect
the period of time during the year that he participated in such plan.
Beginning in 2003, Xx. Xxxx will fully participate in the Company's regular
Tier II executive annual incentive plan.
- Long Term Incentive Bonus: In addition to the annual incentive program
summarized above, the Senior Vice President qualifies for a long-term incentive
bonus that is based upon overall corporate success, measured through financial
objectives. Long-term incentive cycles are three-years in duration. The Senior
Vice President qualifies for a long-term plan payout potential of 15% at gate,
70% at target and 180% at stretch. Payout percentages are applied to the
executive's annualized base salary effective the end of December of the last
year in the three-year cycle. Actual payouts 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 three-year cycle. The first
two years eligibility is prorated based upon length of time covered during the
period. As part of this Agreement, Xx. Xxxx'x participation effective date will
be January 1, 2001.
To transition out of Wavetel's long-term incentive plan, the Company will grant
to Xx. Xxxx a total of 7000 of its restricted shares, with 2000 shares to vest
January 1, 2004, 2000 shares to vest January 1, 2005, and 3000 shares to vest
January 1, 2006 if he is still employed with the Company. These stock grants
and Xx. Xxxx'x benefits under the Company's long term incentive plan shall
replace and be in lieu of any benefits (including stock options) to which he
previously may have been entitled under Wavetel's long-term incentive plan
(including options). However,if outside funding is secured by December 31, 2003,
and, as a consequence, Xx. Xxxx returns to Wavetel as its Chief Executive
Officer (as his sole responsibility), Xx. Xxxx'x right to receive the 7000
restricted Company shares shall lapse, his participation in the Company's
long-term incentive plan shall be pro rated for the year of his return to
Wavetel, and his eligibility for benefits under Wavetel's long-term incentive
plan (including stock options) shall be fully restored as though this Agreement
did not exist and he had remained in his position as Wavetel's Chief Executive
Officer, as his sole responsibility, except that the terms of his employment
agreement with Wavetel shall be amended to provide that the date for securing
Full Funding, as a condition to the second grant of options to Xx. Xxxx
provided for in that agreement, shall be extended from May 1, 2003, to December
31, 2003.
Executive Benefits
The Senior Vice President is eligible for enhanced life insurance, short-term
disability and long-term disability benefits. The life insurance benefit is a
Company owned whole life policy that provides a death benefit based on
predetermined levels of coverage. The Senior Vice President qualifies for an
enhanced life insurance benefit of $750,000. Executives elect a beneficiary of
their choosing and have a limited tax liability. The LTD benefit is intended to
supplement the standard Company coverage to currently provide 70% of total cash
compensation (base + target annual incentive plan award) in the event of
disability.
The Senior Vice President qualifies for participation in the Company's
Executive Nonqualified Excess Plan ("Excess Plan"). 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 he/she
could contribute through a 401(k) Plan alone. The Excess Plan provides an
enhanced employer matching contribution over and above what is provided through
the 401(k) Plan.
Executive Perquisites
- Annual Physical Examination: $600.00
- Annual Financial Counseling: $5000.00 first-year,
$1500 tax preparation each subsequent year
- Country Club Dues Reimbursement: $225.00 per month
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 basic salary to $300,000
max)
Supplemental Life (Up to 4 x basic pay subject to
plan provisions)
Dependent Life (company provided and optional)
AD&D (1.5 x basic salary to $300,000)
Voluntary AD&D (optional coverage for employee and
family)
Group insurance benefits commence at the beginning
of the month following 60 days of employment.
Benefit programs are subject to review and
adjustment at the company's discretion.
- Vacation: Four weeks of vacation per year with prorated
adjustment first year.
- Personal Days: Two days per year.
Savings and Retirement Benefits
- Savings Plus Plan (401k): Qualified plan with scheduled and
supplemental matching contributions.
- Retirement Plan: Qualified retirement plan provided by
Company.
- Employee Stock Purchase Plan: Voluntary plan offering after-tax employee
contributions through payroll deductions.
Other
- Car Allowance: $1000.00 per month
- Severance Agreement: In the event Xx. Xxxx'x employment is
severed involuntarily during the first 36
months of this assignment (for reasons
other than criminal activity, moral
turpitude or gross insubordination), he
will be paid a severance equal to his
monthly base salary at the time of
termination for a period of 6 months or
until he secures other employment,
whichever occurs first. During this period,
the Company will continue Xx. Xxxx'x
medical and dental insurance coverage under
the same terms and conditions as were in
effect prior to his termination. The terms,
conditions and benefits of this Severance
Agreement will terminate at the conclusion
of a 36 month period from date of
assignment.
The terms and conditions of this Employment Agreement are subject to Xx. Xxxx'x
signing a CT Communications Inc. Nondisclosure/Non-compete Agreement. This
Employment Agreement replaces Xx. Xxxx'x original Employment Agreement with
Wavetel, dated May 1, 2001, in its entirety.
Signed:
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Xxxxxxx Xxxx Date Xxxxxxx Xxxxxxxx
