I would be pissed that out of a four "man" team (2 founders, 2 employees) that the first employee would have the gall to ask them to leave. How is this acceptable? Only in the world of companies seeking funding.

If the CTO came and said hey in 6 months I think we should discuss you stepping away from coding and into a new role. I wouldn't want to hear it but if they told me to leave my very small company I would think they crossed a line. The CTO maybe management but he isn't the owner.

In this sort of circumstance, yes. There's no other justification for the actions they're taking and the manner in which they're taking them. The CTO is pursuing a course contrary to the OP's own interests. He need to take this seriously and start talking to his attorney.