CT Communications, Inc. Amended and Restated 2001 Stock Incentive Plan Incentive Stock Option Agreement

Summary

This agreement is between CT Communications, Inc. and an employee (the optionee), granting the employee the right to purchase company stock at a set price under the company's 2001 Stock Incentive Plan. The option vests over four years, with one-fourth of the shares becoming available each year, provided the employee remains in service. If employment ends, vesting stops and the option may expire sooner. Special rules apply for termination due to death, disability, or retirement. The agreement outlines how to exercise the option, payment methods, and tax obligations.

EX-10.2 3 g91570exv10w2.txt EX-10.2 EXHIBIT 10.2 CT COMMUNICATIONS, INC. AMENDED AND RESTATED 2001 STOCK INCENTIVE PLAN INCENTIVE STOCK OPTION AGREEMENT CT Communications, Inc., a North Carolina corporation (the "Company"), hereby grants an option to purchase shares of its common stock, (the "Stock") to the optionee named below. The terms and conditions of the option are set forth in this cover sheet, in the attachment and in the Company's Amended and Restated 2001 Stock Incentive Plan (the "Plan"). Grant Date: __________________, 2004 Name of Optionee: _________________________________________________ Optionee's Social Security Number: _____-____-_____ Number of Shares Covered by Option: ______________ Option Price per Share: $_____.___ (AT LEAST 100% OF FAIR MARKET VALUE) Vesting Start Date: _________________, ____ BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS DESCRIBED IN THE ATTACHED AGREEMENT AND IN THE PLAN, A COPY OF WHICH IS AVAILABLE FROM THE COMPANY'S HUMAN RESOURCES DEPARTMENT UPON REQUEST. YOU ACKNOWLEDGE THAT YOU HAVE CAREFULLY REVIEWED THE PLAN, AND AGREE THAT THE PLAN WILL CONTROL IN THE EVENT ANY PROVISION OF THIS AGREEMENT SHOULD APPEAR TO BE INCONSISTENT. Optionee: ------------------------------------------------------------------- (Signature) Company: ------------------------------------------------------------------- (Signature) Title: ----------------------------------------------------------- Attachment This is not a stock certificate or a negotiable instrument. CT COMMUNICATIONS, INC. AMENDED AND RESTATED 2001 STOCK INCENTIVE PLAN INCENTIVE STOCK OPTION AGREEMENT INCENTIVE STOCK OPTION This option is intended to be an incentive stock option under Section 422 of the Internal Revenue Code and will be interpreted accordingly. If you cease to be an employee of the Company, its parent or a subsidiary ("Employee") but continue to provide Service, this option will be deemed a nonstatutory stock option three months after you cease to be an Employee. In addition, to the extent that all or part of this option exceeds the $100,000 rule of section 422(d) of the Internal Revenue Code, this option or the lesser excess part will be deemed to be a nonstatutory stock option. VESTING This option is only exercisable before it expires and then only with respect to the vested portion of the option. Subject to the preceding sentence, you may exercise this option, in whole or in part, to purchase a whole number of vested shares not less than 100 shares, unless the number of shares purchased is the total number available for purchase under the option, by following the procedures set forth in the Plan and below in this Agreement. Your right to purchase shares of Stock under this option vests as to one-fourth (1/4) of the total number of shares covered by this option, as shown on the cover sheet, on each of the first four (4) one year anniversaries of the Vesting Start Date, provided you continue in Service on the relevant anniversary date. The resulting aggregate number of vested shares will be rounded to the nearest whole number, and you cannot vest in more than the number of shares covered by this option. No additional shares of Stock will vest after your Service has terminated for any reason. TERM Your option will expire in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Grant Date, as shown on the cover sheet. Your option will expire earlier if your Service terminates, as described below. REGULAR TERMINATION If your Service terminates for any reason, other than death, Disability or Retirement, then the unvested portion of your option will expire immediately and the vested portion of your option will expire at the close of business at Company headquarters on the 90th day after your termination date. 2 DEATH, OR DISABILITY, If your Service terminates because of your death, RETIREMENT Disability, or Retirement (as defined below), then your option will become 100% vested on your date of termination of Service and will expire at the close of business at Company headquarters on the date twenty four (24) months after the date of your termination of Service. During that twenty four month period, you, or your estate or heirs in the case of your death, may exercise your option. Notwithstanding the foregoing, in no event may your option be exercised on or after the 10th anniversary of the Grant Date. For purposes of this Agreement, "Retirement" means a termination of Service determined by the Board in its sole discretion to be a "Retirement." LEAVES OF ABSENCE For purposes of this option, your Service does not terminate when you go on a bona fide employee leave of absence that was approved by the Company in writing, if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by applicable law. However, your Service will be treated as terminating 90 days after you went on employee leave, unless your right to return to active work is guaranteed by law or by a contract. Your Service terminates in any event when the approved leave ends unless you immediately return to active employee work. The Company determines, in its sole discretion, which leaves count for this purpose, and when your Service terminates for all purposes under the Plan. NOTICE OF EXERCISE When you wish to exercise this option, you must follow the procedures establishes by the Company and its agent including filing the proper "Notice of Election to Exercise Stock Option" form at the address given on the form. If someone else wants to exercise this option after your death, that person must prove to the Company's satisfaction that he or she is entitled to do so. FORM OF PAYMENT When you submit your notice of exercise, you must include payment of the option price for the shares you are purchasing. Payment may be made in one (or a combination) of the following forms: - Cash, your personal check, a cashier's check, a money order or another cash equivalent acceptable to the Company. - Shares of Stock which have already been owned by you for more than six months and which are surrendered to the Company. The value of the shares, determined as of the effective date of the option exercise, will be applied to the 3 option price. - By delivery (on a form prescribed by the Company) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell Stock and to deliver all or part of the sale proceeds to the Company in payment of the aggregate option price and any withholding taxes. WITHHOLDING TAXES You will not be allowed to exercise this option unless you make acceptable arrangements to pay any withholding or other taxes that may be due as a result of the option exercise or sale of Stock acquired under this option. In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to the exercise or sale of shares arising from this grant, the Company shall have the right to require such payments from you, or withhold such amounts from other payments due to you from the Company or any Affiliate. TRANSFER OF OPTION During your lifetime, only you (or, in the event of your legal incapacity or incompetency, your guardian or legal representative) may exercise the option. You cannot transfer or assign this option. For instance, you may not sell this option or use it as security for a loan. If you attempt to do any of these things, this option will immediately become invalid. You may, however, dispose of this option in your will or it may be transferred upon your death by the laws of descent and distribution. Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your spouse, nor is the Company obligated to recognize your spouse's interest in your option in any other way. RETENTION RIGHTS Neither your option nor this Agreement give you the right to be retained by the Company (or any Parent, Subsidiaries or Affiliates) in any capacity. The Company (and any Parent, Subsidiaries or Affiliates) reserve the right to terminate your Service at any time and for any reason. SHAREHOLDER RIGHTS You, or your estate or heirs, have no rights as a shareholder of the Company until a certificate for your option's shares has been issued (or an appropriate book entry has been made). No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued (or an appropriate book entry has been made), except as described in the Plan. 4 ADJUSTMENTS In the event of a stock split, a stock dividend or a similar change in the Stock, the number of shares covered by this option and the option price per share shall be adjusted (and rounded down to the nearest whole number) if required pursuant to the Plan. Your option shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity. APPLICABLE LAW This Agreement will be interpreted and enforced under the laws of the State of North Carolina, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. THE PLAN The text of the Plan is incorporated in this Agreement by reference. Certain capitalized terms used in this Agreement are defined in the Plan, and have the meaning set forth in the Plan. This Agreement and the Plan constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded. CONSENT TO ELECTRONIC The Company may choose to deliver certain statutory DELIVERY materials relating to the Plan in electronic form. By accepting this option grant you agree that the Company may deliver the Plan prospectus and the Company's annual report to you in an electronic format. If at any time you would prefer to receive paper copies of these documents, as you are entitled to, the Company would be pleased to provide copies. Please contact the Company's investor relations department to request paper copies of these documents. CERTAIN DISPOSITIONS If you sell or otherwise dispose of Stock acquired pursuant to the exercise of this option sooner than the one year anniversary of the date you acquired the Stock, then you agree to notify the Company in writing of the date of sale or disposition, the number of shares of Stock sold or disposed of and the sale price per share within 30 days of such sale or disposition. BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN. 5