Charles & Colvard, Ltd. Board of Directors Compensation Program Effective January 1, 2015

Summary

This agreement outlines the compensation program for non-management members of the Board of Directors of Charles & Colvard, Ltd. Board members receive annual cash retainers, with additional payments for serving as Executive Chairperson or as chair or member of board committees. Compensation is paid quarterly and pro-rated as needed. Directors also receive stock option grants upon appointment and annual re-election, with vesting contingent on continued service until the next annual meeting. No attendance fees are provided. The program was adopted on February 5, 2015, effective January 1, 2015.

EX-10.28 2 ex10_28.htm EXHIBIT 10.28

Exhibit 10.28

CHARLES & COLVARD, LTD.

BOARD OF DIRECTORS COMPENSATION PROGRAM

With Effect as of January 1, 2015

Designated non-management members of the Board of Directors (the “Board”) of Charles & Colvard, Ltd. (the “Company”) shall be compensated as follows:

Annual Retainer:	$30,000 paid in four quarterly installments in arrears, pro-rated as applicable.

Additional Annual Retainers:	Executive Chairperson of the Board - $100,000 paid in four quarterly installments in arrears, pro-rated as applicable.

	Chairperson of the Audit Committee - $15,000 paid in four quarterly installments in arrears, pro-rated as applicable.

	Chairperson of Compensation Committee and Nominating and Governance Committee - $7,500 paid in four quarterly installments in arrears, pro-rated as applicable.

	Board Committee Members (excluding Committee Chairperson and Executive Chairperson of the Board) - $5,000 paid in four quarterly installments in arrears, pro-rated as applicable. Members of the Board may only receive retainers for serving as a member of two board committees.

Equity Compensation:	Stock option grant upon appointment as a member of the Board by the Board to fill a vacancy in the Board, with a grant date value to be determined by the Board as appropriate considering the time remaining before re-election at the next annual shareholders meeting. Stock option grant upon annual re-election as a director at the annual shareholders’ meeting with a grant date value of $50,000 for Directors and $55,000 for the Executive Chairperson (calculated using the Black-Scholes-Merton option pricing model). Vesting of the stock option awards shall be contingent upon service on the Board of Directors until the next annual shareholders’ meeting following the grant.

Attendance Participation Fee:	None.

Adopted February 5, 2015 and effective as of January 1, 2015