Looking for an agreement? Search from over 1 million agreements now.

Ceo Employment Agreement

This is an actual contract by Charles & Colvard.
Browse the agreement preview below and buy the entire agreement for $35
Search This Document
REDACTED - OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION AND IS DENOTED HEREIN BY *****.


EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into effective as of November 1, 1999 by and between C3, Inc., a North Carolina company, DBA Charles & Colvard, with its principal office at 3800 Gateway Boulevard, Suite 310, Morrisville, North Carolina, 27560 (the "Company), and David Fudge, an individual currently residing at 107 Planter Place, Oxford, North Carolina, 27565 ("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.


Therefore, in consideration of the mutual covenants contained in this Agreement, the grant of certain options to purchase common stock of the Company and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, 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 on and through October 31, 2002. This Agreement shall automatically, at the expiration of the then current term, renew for successive one year terms, unless terminated by either party upon no less than 30 days prior written notice to the other, or is otherwise terminated pursuant to Paragraph 7.


3. Position and Duties. The Employee shall serve as Vice President of Sales of the Company. As such, it is understood and agreed that Employee lives in Oxford, North Carolina and shall not be required to change his place of residence to fulfill the duties of his employment. Employee will, under the direction of the President and CEO of the Company, faithfully and to the best of his ability perform the duties as set out in his job description on Exhibit A hereto and such additional duties as may be reasonably assigned by the President and Board of Directors. 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 a base salary of
$125,000, payable in regular and equal monthly installments ("Base
Salary"); provided, however, that the Base Salary shall be adjusted as
per the description and example shown on Exhibit B hereto. The


adjustment shall occur after the annual audit of the companies books is
concluded by the company's outside auditors, with the first adjustment
occurring in 2001.


(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").


(c) Incentive Compensation. Employee shall participate in such
incentive plans as may be approved by the Board of Directors from
time-to-time for the officers of the Company. Additionally, the
Employee shall receive a "commission" of $0.30 per carat of moissanite
sold by the Company in the twenty four target US Media markets, as
defined by the Neilson Rating Service, identified on Exhibit C, list
"B", to this agreement and $0.10 per carat of moissanite sold by the
Company in any other markets. Exhibit C is incorporated herein by
reference as if it were a part hereof. Such commissions shall be paid
quarterly, after the review of the Company's books by the outside
auditors for the quarter then ending. This provision shall be in effect
until the company achieves it's sales objective for the year 2000 or
2001, or 2002, as approved by the Company's Board of Directors. Upon
that event, the commissions shall become $0.20 per carat on all sales
irrespective of the market where sold.


(d) Employee Stock Option Participation. Employee shall be
granted, as additional consideration for entering into this Agreement,
an option to purchase 60,000 shares of the Company's common stock in
accordance with the terms and conditions of the Employee Stock Option
Agreement annexed hereto as Exhibit D and incorporated herein by
reference as if it were a part hereof. Employee shall receive options
to purchase an additional 40,000 shares of the shares of the common
stock of the Company if increased distribution goals are met. Those
options can be earned and granted according to the following schedule.


(i) If within six (6) months of the date of this agreement, 8,000
options will be earned and granted if the number of retailers in the
targeted markets identified on Exhibit C, list "A" domestic markets
doubles from the current ** to ***. An additional 2,000 options will be
earned and granted if at least 25% of the retailers added are "AGS" or
"AGTA" or similar retailers; (ii) if within 12 months, 8,000 options
will be earned and granted if the total number of retail outlets in the
targeted markets (Exhibit C, List B) reaches ***. An additional 2,000
options will be earned and granted if at least 25% of the retailers
added are "AGS" or "AGTA" or similar retailers; (iii) if within 18
months, 8,000 options will be earned and granted if the Company has ***
retail stores in the 24 targeted markets, (Exhibit C, List B). An
additional 2,000 options will be earned and granted 25% of those added
are "AGS" or "AGTA" or similar retailers; (iv) if within 30 months
10000 options will be earned and granted if the total number of
retailers in the targeted markets (Exhibit C, List B) becomes ***; or
in the event the options set out above are not earned. (v) Employee
shall receive options to purchase an additional 20,000 shares of the
shares of the common stock


of the Company if within twelve (12) months from the effective date of
this Agreement the number of retail outlets in the United States
increase by one hundred percent, or to ***, from the current level of
*** such retail outlets. Further, Employee shall receive options to
purchase 20,000 shares of the common stock of the Company within thirty
(30) months from the effective date of this Agreement if the number of
retail outlets in the United States increase by three hundred percent,
or to ***, from the current level of *** such retail outlets. The
granting of the second 20,000 options described herein shall not be
conditional upon the grant of the initial 20,000 options. In no event
may the number of options earned pursuant to this paragraph exceed
40,000. All references to "retailers" in this paragraph shall mean
retail distribution outlets actively selling Charles & Colvard created
moissanite. All references to "AGS" retailers in this document, shall
mean retailers which are members of the industry trade group, the
American Gem Society, and all references to "AGTA" in this document,
shall mean retailers which are members of the industry trade group, the
American Gem Trade Association. Similar retailers shall mean retailers
that conduct their business to the ethical standards of either AGS or
AGTA member retailers, but are not members of either association.


All options which may be earned under the incentive to open additional retail outlets for the Company's products shall be granted when the targeted levels of retail outlets is achieved, as the case may be, and shall be vested when granted. The price of all such options shall be the publicly traded stock price at closing on the day proceeding the date the options are granted.


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 the Employee shall die during the Term, this Agreement and the employment relationship hereunder will automatically terminate on the date of death, which date shall be the last day of the Term.


(b) Termination for Just Cause. The Company shall have the right to terminate the Employee's employment under this Agreement for "Just Cause". Termination for "Just Cause" shall mean termination for Employee's gross incompetence, failure, after written notice, to perform stated duties covered by the Employee's written job description (as in effect as the effective date of this Agreement), material breach of a fiduciary duty related to the Employee's job description and involving personal gain, willful violation of a material written company policy of general applicability, unethical business practices in connection with the Company's business, conviction of a felony or misdemeanor involving moral turpitude, theft of Company assets or disability or


material breach of any other provision of this Agreement, provided that the Employee has received written notice from the Company of such material breach and such breach remains uncured thirty days after the delivery of such notice. 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 the 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 insurance policy. In the event the Employee's employment under this Agreement is terminated for Just Cause, the Employee shall have no right to receive compensation or other benefits under this Agreement for any period after such termination.


(c) Termination Without Cause. The Company may terminate the Employee's employment other than for "Just Cause," as described in Subsection (b) above, at any time upon written notice to the Employee, which termination shall be effective immediately. In the event the Company terminates Employee pursuant to this Subsection (c), (i) the Employee will receive the highest amount of the annual cash compensation (including cash bonuses and other cash-based benefits, including for these purposes amounts earned or payable whether or not deferred) received from the Company during any of the five calendar years immediately preceding such termination ("Termination Compensation") in each year until the end of the Term, so long as the Employee complies with Sections 8, 9 and 10 of the Agreement and (ii) the Company shall take such action as may be required to vest any unvested benefits of the Employee under any employee stock-based or other benefit plan or arrangement. Such amounts shall be payable at the times such amounts would have been paid in accordance with Section 4. In addition, Employee shall continue to participate in the same group hospitalization plan, health care plan, dental care plan, life or other insurance or death benefit plan, and any other present or future similar group employee benefit plan or program for which officers of the Company generally are eligible, on the same terms as were in effect prior to Employee's termination, either under the Company's plans or comparable coverage, for all periods Employee receives Termination Compensation. Notwithstanding anything in this Agreement to the contrary, if Employee breaches Sections 8, 9 or 10 of this Agreement, the 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 Company at any time after the date hereof, Employee may voluntarily terminate employment with Company up until twelve (12) months after the Change of Control for "Goo
-- End of Preview --
Home| About Us| FAQ| Subscription | Contact Us |