Exhibit 10.122
CONSULTING
AGREEMENT
This Consulting Agreement (the
“Agreement”) is entered into between Robert S. Thomas,
a resident of North Carolina (“Thomas”), and
Charles & Colvard, Ltd., a North Carolina corporation
(“Company”), effective as of the 31st day of July, 2008
(the “Effective Date”).
WHEREAS, Thomas served in the
position of Chief Executive Officer, Chairman of the Board, and as
a Director of the Company; and
WHEREAS, Thomas resigned from all
such positions with the Company as of July 21, 2008, and has
resigned from employment as of the Effective Date; and
WHEREAS, the parties wish for
Thomas’s departure from his employment and positions to be
achieved in an amicable fashion, with Thomas available to perform
consulting services for the Company as set out herein, and to
provide a clear understanding of the parties rights and
liabilities;
THEREFORE, the parties agree as
follows:
1. Resignation Date . Thomas
resigned from all positions with the Company, including any
subsidiaries and affiliates, as of July 21, 2008, and has
resigned from his employment as of the “Effective
Date.”
2. Consulting and Assistance in
Litigation . Commencing on the Effective Date, and continuing
for a period of two years thereafter, Thomas will make himself
reasonably available to perform services, at such hours and such
places as may be reasonably requested by the Company, of an
advisory or consulting nature on behalf of Company on the terms set
out herein. Unless otherwise agreed by Company and Thomas in
writing, Thomas’s compensation for providing consulting
services and litigation assistance shall be as set forth in
Section 3(a) below. Such litigation assistance shall include
but not be limited to providing assistance to Company as may
reasonably be requested in connection with the litigation entitled
Charles & Colvard, Ltd. v. Jewelnet Corporation d/b/a
K&G Creations and Jewelnet Acquisition Corporation d/b/a
K&G Creations and with any investigation, inquiry,
litigation or other proceeding in which the Company is or may
become involved, and which arises out of facts and circumstances
known to Thomas (and without regard to whether Thomas is a party
thereto). The Company shall provide to Thomas from time to time, in
writing, a single point-of-contact for Thomas at the Company and
with counsel to coordinate the services to be provided
hereunder.
3. Compensation .
(a) Compensation . In
consideration of Thomas agreeing to make himself available to
provide consulting services and litigation assistance as set out in
Section 2 during the two year period commencing on the
Effective Date, Thomas will be paid at the rate of $10,416.67 per
month in arrears. Additionally, the Company will reimburse expenses
reasonably incurred in performing such services pursuant to the
Company’s standard policy.
(b) Payments for COBRA
Continuation Coverage . Upon resignation from employment,
Thomas will be provided with the option to continue his current
individual and family dependent medical and dental insurance
coverage (the “Continuation Coverage”) under
Company’s medical and dental plans pursuant to the
requirements of the Consolidated Omnibus Budget Reconciliation Act
(“COBRA”). If Thomas elects the Continuation Coverage,
the Company will pay Thomas’s COBRA premium for 18 months
from the Effective Date or until such time that Thomas is no longer
eligible for the Continuation Coverage. With respect to the
calendar year during which the Continuation Coverage is provided to
Thomas and his dependents pursuant to this subsection (b), to
the extent that the Continuation Coverage benefits constitute
taxable income to Thomas, Company shall report as income to Thomas
for federal and state income tax purposes the value of the
Continuation Coverage.
(c) Equity Awards . Upon
resignation and for the duration of this Agreement, any stock
options granted to Thomas shall continue to vest and be exercisable
following resignation in accordance with the terms of such stock
option agreement. The Company agrees that the Company shall not
exercise negative discretion to alter such post-termination
exercise and vesting terms.
4. Death After Effective Date
. Should Thomas die after the Effective Date, Company will pay to
Thomas’s estate any payments provided for in
Sections 3(a)-(b) above which remain unpaid through his
date of death, and notwithstanding Section 3(c), all rights
with respect to any outstanding stock options at the time of
Thomas’s death shall be governed by the terms of the
applicable stock option agreements.
5. Return and Use of Company
Property; Preservation of Records . Unless otherwise mutually
agreed by the parties as necessary or appropriate for the
performance of the services provided for herein, following the
Effective Date, Thomas will promptly return to Company all Company
property, including, but not limited to, computers, credit cards,
personal digital assistant and Company Confidential Information
(both written and electronic copies) as required under
Section 7(a). Thomas may retain his blackberry/cell phone and
pertinent numbers, provided that he assumes service costs related
to such devices as of August 1, 2008. Thomas shall remove all
of his personal belongings from his office. Thomas shall be
provided a Company laptop computer and such access as needed to
perform his duties hereunder. During the term of this A
