Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
On September 9, 2015, the Compensation Committee (the "Compensation Committee")
of the Board of Directors (the "Board") of Charles & Colvard, Ltd. (the
"Company") approved an increase to the annual base salary of Kyle Macemore, the
Company's Chief Financial Officer, from $250,000 to $300,000, effective
September 1, 2015. The Compensation Committee increased Mr. Macemore's base
salary in recognition of his leadership and support during the Company's recent
chief executive officer transition, management of the Company's inventory
levels, and demonstrated operational leadership.
The Compensation Committee also granted discretionary stock options to purchase
50,000 shares of the Company's common stock to each of Mr. Macemore and Steve
Larkin, the Company's Chief Operating Officer, on September 9, 2015. The stock
options have an exercise price of $1.23 per share and vest over a three-year
period, with 25% of the award vesting on the grant date and 25% of the award
vesting on each of the following three anniversary dates of the grant date. The
option grants were made pursuant to the Company's 2008 Stock Incentive Plan, as
amended, and subject to the terms of the Company's standard employee incentive
stock option agreement.
Item 8.01 Other Events.
Pursuant to the Company's Board of Directors Compensation Program, Neal I.
Goldman is entitled to receive an annual retainer of $100,000, paid in four
quarterly installments in arrears, for his service as the Company's Executive
Chairman of the Board. Mr. Goldman has received payment of $50,000 of his annual
retainer for fiscal 2015. On September 9, 2015, Mr. Goldman requested, and the
Compensation Committee approved, the grant of a stock option to purchase 40,650
shares of the Company's common stock in lieu of the cash payment of the
remaining $50,000 of Mr. Goldman's annual retainer for fiscal 2015 so that the
Company could use the cash for other purposes.
The stock option granted to Mr. Goldman has an exercise price of $1.23 per share
and vests and becomes fully exercisable on September 1, 2016. The option grant
was made pursuant to the Company's 2008 Stock Incentive Plan, as amended, and
subject to the terms of the Company's standard director nonqualified stock
On September 9, 2015, the Compensation Committee also approved a revised Board
of Directors Compensation Program (the "Board Compensation Program"), which was
amended to provide that the Executive Chairman's annual retainer of $100,000
would be replaced with an annual retainer of $50,000 and a stock option grant
with a grant date value of $50,000 (calculated using the Black-Scholes-Merton
option pricing model), effective January 1, 2016. Vesting of each such stock
option grant to the Executive Chairperson will be contingent upon service on the
Board of Directors until January 1 of the year following the grant date.
The foregoing description of the Board Compensation Program does not purport to
be complete and is qualified in its entirety by reference to the Board
Compensation Program, a copy of which is filed as Exhibit 10.1 to this Form 8-K
and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description of Document
10.1 Board Compensation Program, effective January 1, 2016
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