Charles Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In response to the impacts of the COVID-19 pandemic upon the business of Charles & Colvard, Ltd. (the “Company”), on April 9, 2020, the Company entered into amendments (the “Amendments”) to the employment agreements of each of Suzanne Miglucci (the Company’s Chief Executive Officer), Clint J. Pete (the Company’s Chief Financial Officer), and Don O’Connell (the Company’s Chief Operating Officer) (collectively, the “Executives”), to which the Executives’ base salaries will be reduced by 25%, 15%, and 15%, respectively, beginning April 13, 2020 and ending on June 30, 2020. The Executives will not be entitled to any back pay for the period of time that their base salaries are reduced.
The foregoing description of the Amendments does not purport to be complete and is qualified in its entirety by reference to the Amendments, copies of which are filed as Exhibits 10.1, 10.2, and 10.3 to this Form 8-K and are incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
On April 9, 2020, the Company issued a press release providing an update on actions being implemented in response to the COVID-19 pandemic, including (1) deploying a work from home policy for all but essential employees due to a mandated stay-at-home order by the State of North Carolina; (2) continuing to process online orders on the Company’s e-commerce website during the closure period, with limited shipping and fulfillment capabilities until state and municipal stay at home orders permit full operations to resume; (3) working with third party partners to enable alternate distribution options, though there may be limited ability to deploy these contingency plans due to global stay-at-home restrictions; (4) furloughing approximately 50% of employees starting April 13, 2020, and funding all health insurance premiums during the furlough for all eligible employees impacted by these measures; (5) implementing temporary salary reductions for all employees, including the Executives; (6) instituting a 50% reduction in fees paid to our Board of Directors; (7) reducing non-payroll expenses, including product development, digital marketing, and travel; and (8) working with advisors to maximize participation in all eligible government or other initiatives available to businesses or employees impacted by the COVID-19 pandemic, such as extending Families First Coronavirus Response Act (FFCRA) benefits to impacted employees and applying for government-subsidized business loans. The Company also extended new 401(k) benefits to assist employees with additional distributions and loan terms during this challenging time. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in this Item 7.01 of Form 8-K is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| 10.1 | Amendment to 2015 Employment Agreement, dated April 9, 2020, by and between Charles & Colvard, Ltd. and Suzanne Miglucci |
| 10.2 | Amendment to 2017 Employment Agreement, dated April 9, 2020, by and between Charles & Colvard, Ltd. and Clint J. Pete |
| 10.3 | Amendment to 2017 Employment Agreement, dated April 9, 2020, by and between Charles & Colvard, Ltd. and Don O’Connell |
| 99.1 | Press Release dated April 9, 2020 |
CHARLES & COLVARD LTD Exhibit
EX-10.1 2 tm2015444d1_ex10-1.htm EXHIBIT 10.1 Exhibit 10.1 AMENDMENT TO 2015 EMPLOYMENT AGREEMENT THIS AMENDMENT TO 2015 EMPLOYMENT AGREEMENT (this “Amendment”),…
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About Charles & Colvard, Ltd. (NASDAQ:CTHR)
Charles & Colvard, Ltd. manufactures and distributes Charles & Colvard Created Moissanite jewels (moissanite) and finished jewelry featuring moissanite. The Company’s segments are Wholesale, Moissanite.com and Charles & Colvard Direct. The Company sells loose moissanite jewels and finished jewelry at wholesale to distributors, manufacturers and retailers, and at retail to end consumers through its operating subsidiaries. The Company manages its business primarily through its three distribution channels that it uses to sell its product lines, loose jewels and finished jewelry, which included Charles and Colvard Direct, LLC. The Company sells loose moissanite jewels and finished jewelry featuring moissanite at wholesale to retailers, television (TV) shopping networks, and designers to be sold to end consumers and directly to consumers through its e-commerce sales channel Moissanite.com. The Company primarily sells moissanite jewels, including Forever Classic and Forever Brilliant.
