Exhibit 10.130
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (the
“Agreement”) is made and entered into effective as of
June 23, 2009 by and between Charles & Colvard, Ltd.,
a North Carolina company with its principal office at 300 Perimeter
Park Drive, Suite A, Morrisville, North Carolina, 27560 (the
“Company”), and Timothy L. Krist, an individual
currently residing at 820 Magalloway Drive, Cary, North Carolina,
27519 (“Employee”).
Statement of
Purpose
The Company wishes to obtain the
services of Employee on the terms and conditions and with the
benefits set forth in this Agreement. Employee desires to be
employed by the Company on such terms and conditions and to receive
such additional consideration as set out herein.
As a result of his employment,
Employee will be in a position of trust and confidence and will
have access to, learn of and benefit from certain confidential and
proprietary information, know-how, trade secrets and customer
relationships of the Company and the Company is entitled to be
protected from the use of this information and relationships in
competition with it. Accordingly, in consideration of the mutual
covenants contained in this Agreement, the additional consideration
of $500 paid by the Company to the Employee, the Company’s
covenants set forth in Sections 7(c) and 7(d) which are all in
addition to anything to which the Employee is already entitled the
Employee agrees to the restrictive covenants contained
herein.
Therefore, the Company and Employee
agree as follows:
1. Employment . The Company
hereby agrees to employ Employee, and Employee hereby accepts such
employment, on the terms and conditions set forth in this
Agreement.
2. Term of Employment . The
term of Employee’s employment under this Agreement shall
commence as of the date of this Agreement and shall continue for
one year. Termination of employment shall be governed by Paragraph
7 of this Agreement, and unless terminated by either party as
provided in Paragraph 7, this Agreement shall automatically, at the
expiration of each then existing term, renew for successive
additional one year terms (such annual period being hereinafter
referred to as the “Term”).
3. Position and Duties .
Employee shall serve as Chief Financial Officer of the Company,
which shall include positions of Principal Accounting Officer and
Principal Financial Officer for SEC purposes. Employee will, under
the direction of the Chief Executive Officer of the Company,
faithfully and to the best of his ability perform the duties as set
as may be reasonably assigned by the CEO or the Board of Directors
of the Company. Employee agrees to devote his entire working time,
energy and skills to the Company while so employed.
4. Compensation and Benefits
. Employee shall receive compensation and benefits for the services
performed for the Company under this Agreement as
follows:
(a) Base Salary . Employee
shall receive an initial base salary of $215,000, payable in
regular and equal semi-monthly installments (“Base
Salary”).
(b) Employee Benefits .
Employee shall receive such benefits as are made available to the
other employees of the Company, including, but not limited to,
life, medical and disability insurance, retirement benefits, and
such vacation as is provided to the other employees of the Company
(the “Employee Benefits”). Employer reserves the right
to reduce, eliminate or change such Employee Benefits, in its sole
discretion, subject to any applicable legal and regulatory
requirements.
(c) Incentive Compensation .
Employee shall participate in such incentive equity, cash and other
plans as may be approved by the Board of Directors from
time-to-time for members of management, which shall include an
initial award of 60,000 shares of restricted stock under the
Company’s 2008 Stock Incentive Plan, with all restrictions
lapsing on June 15, 2010.
5. Reimbursement of Expenses
. The Company shall reimburse Employee for all reasonable
out-of-pocket expenses incurred by Employee specifically and
directly related to the performance by Employee of the services
under this Agreement.
6. Withholding . The Company
may withhold from any payments or benefits under this Agreement all
federal, state or local taxes or other amounts as may be required
pursuant to applicable law, government regulation or
ruling.
7. Termination of Employment
.
(a) Death of Employee . If
Employee shall die during the Term, this Agreement and the
employment relationship hereunder will automatically terminate on
the date of death.
(b) Termination by the Company
for Just Cause . The Company shall have the right to terminate
Employee’s employment under this Agreement at any time for
Just Cause, which termination shall be effective immediately.
Termination for “Just Cause” shall include, termination
for Employee’s personal dishonesty, gross incompetence,
willful misconduct, breach of a fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful
violation of any law, rule, regulation (other than traffic
violations or similar offenses), written Company policy or final
cease-and-desist order, conviction of a felony or of a misdemeanor
involving moral turpitude, unethical business practices in
connection with the Company’s business, misappropriation of
the Company’s assets (determined on a reasonable basis),
disability or material breach of any other provision of this
Agreement or any other conduct by Employee of a similar nature. For
purposes of this subsection, the term “disability”
means the inability of Employee, due to the condition of his
physical, mental or emotional health, to satisfactorily perform the
duties of his employment hereunder for a continuous three month
period; provided further that if the Company furnishes long term
disability insurance for Employee, the term
“disability” shall mean that continuous period
sufficient to allow for the long term disability payments to
commence pursuant to the Company’s long term
disability
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insurance policy. In the event
Employee’s employment under this Agreement is terminated for
Just Cause, Employee shall have no right to receive compensation or
other benefits under this Agreement for any period after such
termination.
(c) Termination by the Company
Without Cause . The Company may terminate Employee’s
employment other than for “Just Cause,” as described in
Subsection (b) above, at any time upon written notice to
Employee, which termination shall be effective immediately. For the
avoidance of doubt, a notice by the Company that the Agreement is
not automatically renewing as provided in Section 2 hereof
shall constitute a termination by the Company without cause under
this Subsection (c). In the event the Company terminates Employee
pursuant to this Subsection (c), Employee will continue to receive
his Base Salary at time of termination for a one (1) year
period from such termination (the “Termination
Compensation”), so long as Employee complies with
Section 8, 9 and 10 of the Agreement. Such amounts shall be
payable at the times such amounts would have been paid in
accordance with Section 4. In addition, the Company shall pay
Employee’s insurance plan premiums under the Consolidated
Omnibus Budget Reconciliation Act to continue his and his
family’s health insurance coverage for all periods that
Employee receives Termination Compensation. Notwithstanding
anything in this Agreement to the contrary, if Employee breaches
Sections 8, 9 or 10 of this Agreement, Employee will not be
entitled to receive any further compensation or benefits pursuant
to this Section 7(c).
(d) Change of Control
Situations . In the event of a Change of Control of the Company
at any time after the date hereof, Employee may voluntarily
terminate employment with Company up until one (1) year after
the Change of Control for “Good Reason” (as defined
below) and, subject to Section 7(f), (y) be entitled to
receive in a lump sum (i) any compensation due but not yet
paid through the date of termination and (ii) in lieu of any
further salary payments from the date of termination to the end of
the then existing term, an amount equal to the Termination
Compensation within two (2) months of the consummation of the
Change of Control, and (z) the Company shall pay
Employee’s insurance plan premiums under the Consolidated
Omnibus Budget Reconciliation Act to continue his and his
family’s health insurance coverage for a period of one year
following termination of employment by Employee, on the same terms
as were in effect either (A) at the date of such termination,
or (B) if such plans and programs in effect prior to the
Change of Control of Company are, considered together as a whole,
materially more generous to the officers of Company, then at the
date of the Change of Control. Any equity based incentive
compensation (including but not limited to stock options,
restricted stock, SARs, etc.) shall fully vest and be immediately
exercisable in full upon a Change of Control, not withstanding any
provision in any applicable plan. Any such benefits shall be paid
by the Company to the same extent as they were so paid prior to the
termination or the Change of Control of Company.
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“Good Reason” shall mean
the occurrence of any of the foll
