Document:

Exhibit 10.1

 

CHARLES & COLVARD, LTD.

FISCAL 2023 SENIOR MANAGEMENT EQUITY INCENTIVE
PROGRAM

 

Adopted November 7, 2022

 

The Charles & Colvard, Ltd. Fiscal 2023 Senior Management
Equity Incentive Program (the “Program”) is a compensatory program established pursuant to the Charles & Colvard, Ltd.
2018 Equity Incentive Plan (the “2018 Plan”) for the 2023 fiscal year (i.e., July 1, 2022 through June 30, 2023).
The Compensation Committee (the “Committee”) of the Board of Directors of Charles & Colvard, Ltd. (the “Company”)
is charged with administering the Program. The Program covers performance-based restricted stock awards and cash bonus awards for Company
personnel at the level of Senior Vice President and above (the “Eligible Employees”).

 

The Program supersedes and replaces all prior management incentive
plans or programs for all periods commencing on or after July 1, 2022.

 

Purpose and Objective

 

The Program is intended to further strengthen the Company’s pay
for performance philosophy and more closely align the Eligible Employees’ interests with those of the Company and its shareholders
by granting Eligible Employees significant equity and cash compensation awards that are tied to Company performance. The Program provides
for a mixture of both performance-based and time-based vesting of awards to permit the Committee to tie vesting to the attainment of specific
performance measures under the 2018 Plan while also encouraging the longer-term retention of Eligible Employees.

 

Description of Units1

 

Each award granted under the FY2023 Program shall be expressed in “Units”
and each Unit shall consist of (1) a restricted stock award representing 65% of the Unit (the “Restricted Stock Component”),
to be granted to Eligible Employees upon approval of the FY2023 Program, and (2) a cash bonus award representing 35% of the Unit
(the “Cash Component”), to be paid to Eligible Employees on the later of (a) the payroll date following the Vesting Date
(as defined below), or (b) the payroll date following the Compensation Committee’s determination of the Company’s achievement
of performance goals. All awards under the FY2023 Program shall be subject to achievement of performance goals.

 

The value of the Restricted Stock Component of a Unit shall be set
on the grant date of the Unit under the FY2023 Program. The value of the Cash Component of a Unit shall be calculated on the Vesting Date
of the Unit as the product of 0.35 multiplied by the closing price of one share of the Company’s Common Stock on the Vesting Date
(the “Vesting FMV”).

 

 

1 The term “Units” is used in place of “Share
Equivalents” to ensure that the Cash portion of the program which is now linked to a share price multiple is properly characterized
as “phantom stock” for tax purposes as opposed to being viewed as an equity incentive.

 

    1

     

    

 

For example, if an award is expressed as 100 Units and all performance
goals are achieved at the 100% payout level (as more fully described below), all 100 Units would fully vest. The Restricted Stock Component
of the 100 Units would equate to 65 fully vested shares of the Company’s Common Stock. Assuming the Vesting FMV is $2.00, the Cash
Component would equate to $70.00 (100 Units multiplied by 0.35 multiplied by $2.00).

 

For the avoidance of doubt, the Cash Component of a Unit does not represent
any security interest in the Company, and does not in any way represent an ownership interest in the Company, nor does it give an Eligible
Employee any rights as a shareholder of the Company.

 

Achievement of Units

 

Units granted under the FY2023 Program have both performance and service
measures. Achievement of an Eligible Employee’s performance measures shall be measured by the Committee as follows: (1) 65%
of each Unit shall be based on the achievement of a Company goal regarding revenue (the “Revenue Measure”); and (2) 35%
of each Unit shall be based on the achievement of a Company goal regarding EBITDA (the “EBITDA Measure” and together with
the Revenue Measure, the “Company Measures”), all for the period from July 1, 2022 through June 30, 2023 (the “Performance
Measurement Period”).

 

If the Company does not achieve 90% of the Revenue Measure, the Revenue
Measure component of each Restricted Stock Component of each Unit shall be forfeited and the Cash Component of each Unit related to such
Revenue Measure shall not be paid. The Company must achieve at least 90% of the Revenue Measure in order for the portion of the Unit attributed
to the Revenue Measure to be vested/paid, as applicable. Achievement of 90% or 100% of the Revenue Measure shall result in payment of
50% or 75% of the portion of the Unit attributed to the Revenue Measure, respectively. Achievement of revenue rounding to 103% or 110%
of the Revenue Measure shall result in payment of 100% or 125% of the portion of the Unit attributed to the Revenue Measure, respectively,
so long as the EBITDA Measure is achieved. If the Company does not achieve 100% of the EBITDA Measure, the EBITDA Measure component of
each Restricted Stock Component of each Unit shall be forfeited and the Cash Component of each Unit related to such EBITDA Measure shall
not be paid. The Company Measures are determined by the Committee and may be modified by the Committee during, and after the end of, the
Performance Measurement Period, subject to the terms of the 2018 Plan. In addition, an Eligible Employee must remain in continuous service
until July 31, 2023 (the “Vesting Date”) for restrictions to fully lapse on the Restricted Stock Component and for the
Cash Component to be paid.

 

    2

     

    

 

Under the FY2023 Program, the Eligible Employees shall be eligible
to receive the following target-level Units:

 

	Position	 	Target Units	 
	Chief Executive Officer	 	 	150,000	 
	Chief Financial Officer and Chief Operating Officer	 	 	75,000	 
	Senior Vice President(s)	 	 	50,000	 

 

The Program provides the Committee discretion to make additional awards
above the targeted award level in recognition of extraordinary performance.

 

Committee Discretion in Granting Units and Administering the Program
for Future Employees

 

Any person who commences employment with the Company after July 1,
2022 may be designated an Eligible Employee for purposes of the Program at the discretion of the Committee and receive a pro-rated number
of Units.

 

Source of Equity Compensation Units; Coordination with 2018 Plan

 

The Restricted Stock Component and the Cash Component of all Units
granted pursuant to the Program shall be issued under and pursuant to the 2018 Plan. All terms, conditions, and requirements of the 2018
Plan are expressly incorporated into the Program by reference.

 

The Restricted Stock Component of all Units granted pursuant to the
Program shall be evidenced by an appropriate Restricted Stock Award Agreement in the form approved by the Committee for use under the
2018 Plan, and the Restricted Stock Component of each Unit hereunder shall be subject to the terms and conditions set forth in the applicable
Restricted Stock Award Agreement and the 2018 Plan. To the extent there is any conflict or ambiguity between the terms of the FY2023 Program
and the 2018 Plan or between the FY2023 Program and any applicable Restricted Stock Award Agreement, the terms of the 2018 Plan or the
applicable Restricted Stock Award Agreement shall control.

 

Amendment and Termination of the Program

 

The Program may be amended or terminated at any time by the Committee
or the Company’s Board of Directors. The Committee shall have unilateral authority to amend the Program and any Unit granted pursuant
to the Program (without the recipient’s consent, unless otherwise required under the 2018 Plan) to the extent necessary to comply
with applicable laws, rules, or regulations or changes to applicable laws, rules, or regulations (including but not limited to Section 409A
of the Internal Revenue Code of 1986, as amended, federal securities laws, or related regulations or other guidance).

 

Withholding; Tax Matters

 

In accordance with the terms of the 2018 Plan and applicable
Restricted Stock Award Agreements thereunder, the Company shall withhold, or shall require the recipient to pay the Company in cash,
the amount of any local, state, federal, foreign, or other tax or other amount required by any governmental authority to be withheld
and paid over by the Company to such authority for the account of the recipient. The Company makes no warranties or representations
with respect to the tax consequences (including but not limited to income tax consequences) related to the transactions contemplated
by the FY2023 Program and the 2018 Plan. A recipient should consult with his/her own attorney, accountant, and/or tax advisor
regarding the decision to accept equity compensation awards under the Program and the consequences thereof. The Company has no
responsibility to take or refrain from taking any actions in order to achieve a certain tax result for any recipient.

 

    3EX-10.1

 Exhibit 10.1 

THIS PROMISSORY NOTE (THIS “NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER
THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE. THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT
AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE COMPANY MAY REQUIRE
AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO THE COMPANY TO THE EFFECT THAT ANY SALE OR OTHER DISPOSITION IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 

PROMISSORY NOTE 
 Principal Amount: Not to
Exceed $1,500,000 Dated as of May 10, 2022 
 (See Schedule A) 

FOR VALUE RECEIVED and subject to the terms and conditions set forth herein, RXR Acquisition Corp. (the “Maker”), promises to
pay to the order of RXR Acquisition Sponsor LLC or its registered assigns or successors in interest (the “Payee”), or order, the principal balance as set forth on Schedule A hereto in lawful money of the United
States of America; which schedule shall be updated from time to time by the parties hereto to reflect all advances and readvances outstanding under this Note; provided that at no time shall the aggregate of all advances and readvances outstanding
under this Note exceed $1,500,000. Any advance hereunder shall be made by the Payee upon receipt of a written request of the Maker and shall be set forth on Schedule A. 

1. Principal.
 (a)
Maturity Date. All unpaid principal under this Note shall be due and payable in full on the earlier of (i) March 8, 2023 and (ii) the effective date of a merger, share exchange, asset acquisition, share purchase, reorganization
or similar business combination, involving the Company and one or more businesses (the “Business Combination”) (such earlier date, the “Maturity Date”), unless accelerated upon the occurrence of an Event of Default
(as defined below). Any outstanding Principal Amount to date under this Note may be prepaid at any time by the Maker, at its election and without penalty. 

(b) Form of Payment. At the sole discretion of Payee, upon written notice to Maker not less than ten (10) business days prior to
the Maturity Date (the “Election Notice”), Payee may elect to have up to $1,500,000 in unpaid Principal Amount due under this Note paid in newly issued warrants to acquire common stock of the Payee (the “Private
Warrants”), at an issue price of $1.50 per Private Warrant, with terms identical to those Private Placement Warrants set forth in that certain Warrant Agreement, dated March 3, 2021 by and between Maker and Continental Stock
Transfer & Trust Company. For the avoidance of doubt, all such remaining unpaid Principal Amount due under this Note at the Maturity Date shall be paid by check or wire transfer of immediately available funds or as otherwise determined by
the Maker to such account as the Payee may from time to time designate by written notice in accordance with the provisions of this Note. 

2. Interest. No interest shall accrue on the unpaid balance of this Note. 

3. Application of Payments. All payments shall be applied first to payment in full of any costs incurred in the collection of any
sum due under this Note, including (without limitation) reasonable attorney’s fees, then to the payment in full of any late charges and finally to the reduction of the unpaid Principal Amount due under this Note. 

4. Events of Default. The occurrence of any of the following shall constitute an event of default (“Event of
Default”): 
 (a) Failure to Make Required Payments. Failure by the Maker to pay the unpaid Principal Amount due
pursuant to this Note within five (5) business days of the date specified above. 

 (b) Voluntary Bankruptcy, Etc. The commencement by the Maker of a voluntary case
under any applicable bankruptcy, insolvency, reorganization, rehabilitation or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of the Maker or for any substantial part of its property, or the making by it of any assignment for the benefit of creditors, or the failure of the Maker generally to pay its debts as such debts become due, or the taking of corporate
action by the Maker in furtherance of any of the foregoing. 
 (c) Involuntary Bankruptcy, Etc. The entry of a decree or order
for relief by a court having jurisdiction in the premises in respect of the Maker in an involuntary case under any applicable bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Maker or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed
and in effect for a period of sixty (60) consecutive days. 
 5. Remedies. 

(a) Upon the occurrence of an Event of Default specified in Section 4(a) hereof, the Payee may, by written notice to the Maker, declare
this Note to be due immediately and payable, whereupon the unpaid Principal Amount of this Note, and all other amounts payable thereunder, shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived, anything contained herein or in the documents evidencing the same to the contrary notwithstanding. 

(b) Upon the occurrence of an Event of Default specified in Sections 4(b) or 4(c), the unpaid Principal Amount of this Note, and all other sums
payable with regard to this Note, shall automatically and immediately become due and payable, in all cases without any action on the part of the Payee. 

6. Waivers. The Maker and all endorsers and guarantors of, and sureties for, this Note waive presentment for payment, demand,
notice of dishonor, protest, and notice of protest with regard to the Note, all errors, defects and imperfections in any proceedings instituted by the Payee under the terms of this Note, and all benefits that might accrue to the Maker by virtue of
any present or future laws exempting any property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution, or providing for any stay of execution, exemption from civil
process, or extension of time for payment; and the Maker agrees that any real estate that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued hereon, may be sold upon any such writ in whole or in part
in any order desired by the Payee. 
 7. Unconditional Liability. The Maker hereby waives all notices in connection with the
delivery, acceptance, performance, default, or enforcement of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the liability of any other party, and shall not be affected in any manner by any
indulgence, extension of time, renewal, waiver or modification granted or consented to by the Payee, and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by the Payee with respect to the payment or
other provisions of this Note, and agrees that additional makers, endorsers, guarantors, or sureties may become parties hereto without notice to the Maker or affecting the Maker’s liability hereunder. 

8. Notices. All notices, statements or other documents which are required or contemplated by this Note shall be: (i) in
writing and delivered personally or sent by first class registered or certified mail, overnight courier service or facsimile or electronic transmission to the address designated in writing, (ii) by facsimile to the number most recently provided
to such party or such other address or fax number as may be designated in writing by such party and (iii) by electronic mail, to the electronic mail address most recently provided to such party or such other electronic mail address as may be
designated in writing by such party. Any notice or other communication so transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the business day following receipt of written confirmation, if sent by
facsimile or electronic transmission, one (1) business day after delivery to an overnight courier service or five (5) days after mailing if sent by mail. 

  
 2 

 9. Construction. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WITHIN THE STATE OF NEW YORK. 
 10. Severability. Any
provision contained in this Note which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 

11. Trust Waiver. Notwithstanding anything herein to the contrary, the Payee hereby waives any and all right, title, interest or claim
of any kind (“Claim”) in or to any distribution of or from the trust account established in which the proceeds of the IPO conducted by the Maker (including the deferred underwriters discounts and commissions) and certain proceeds of
the sale of the Private Placement Warrants were deposited, as described in greater detail in the registration statement and prospectus filed with the U.S. Securities and Exchange Commission in connection with the IPO on March 5, 2021 and hereby
agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the trust account for any reason whatsoever. 

12. Amendment; Waiver. Any amendment hereto or waiver of any provision hereof may be made with, and only with, the written consent of
the Maker and the Payee. 
 13. Successors and Assigns. Subject to the restrictions on transfer in Sections 14 and 15 below, the
rights and obligations of the Maker and the Payee hereunder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of any party hereto (by operation of law or otherwise) with the prior written consent of the
other party hereto and any attempted assignment without the required consent shall be void. 
 14. Transfer of this Note. With
respect to any sale or other disposition of this Note, the Payee shall give written notice to the Maker prior thereto, describing briefly the manner thereof, together with (i) except for a Permitted Transfer, in which case the requirements in
this clause (i) shall not apply, a written opinion reasonably satisfactory to the Maker in form and substance from counsel reasonably satisfactory to the Maker to the effect that such sale or other distribution may be effected without
registration or qualification under any federal or state law then in effect and (ii) a written undertaking executed by the desired transferee reasonably satisfactory to the Maker in form and substance agreeing to be bound by the restrictions on
transfer contained herein. Upon receiving such written notice, reasonably satisfactory opinion, or other evidence, and such written acknowledgement, the Maker, as promptly as practicable, shall notify the Payee that the Payee may sell or otherwise
dispose of this Note or such securities, all in accordance with the terms of the note delivered to the Maker. If a determination has been made pursuant to this Section 14 that the opinion of counsel for the Payee, or other evidence, or the
written acknowledgment from the desired transferee, is not reasonably satisfactory to the Maker, the Maker shall so notify the Payee promptly after such determination has been made. Each Note thus transferred shall bear a legend as to the applicable
restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Maker such legend is not required in order to ensure compliance with the Securities Act. The Maker may issue stop
transfer instructions to its transfer agent in connection with such restrictions. Subject to the foregoing, transfers of this Note shall be registered upon registration on the books maintained for such purpose by or on behalf of the Maker. Prior to
presentation of this Note for registration of transfer, the Maker shall treat the registered holder hereof as the owner and holder of this Note for the purpose of receiving all payments of the Principal Amount hereon and for all other purposes
whatsoever, whether or not this Note shall be overdue and the Maker shall not be affected by notice to the contrary. For purposes hereof “Permitted Transfer” shall have the same meaning as any transfer that would be permitted for
the Private Placement Warrants pursuant to Section 4(c) of that certain Letter Agreement, dated March 3, 2021, among the Maker, the Payee and the other parties thereto. 

15. Acknowledgment. The Payee is acquiring this Note for investment for its own account, not as a nominee or agent, and not with a view
to, or for resale in connection with, any distribution thereof. The Payee understands that the acquisition of this Note involves substantial risk. The Payee has experience as an investor in securities of companies and acknowledges that it is able to
fend for itself, can bear the economic risk of its investment in this Note, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of this investment in this Note and protecting
its own interests in connection with this investment. 
 [Signature Page Follows] 

  
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 IN WITNESS WHEREOF, the Maker, intending to be legally bound hereby, has caused this
Note to be duly executed by the undersigned as of the day and year first above written. 
  

			
	RXR ACQUISITION CORP.
		
	By:	 	 /s/ Michael Maturo

	Name: Michael Maturo
	Title: Chief Financial Officer

  

			
	Acknowledged and agreed as of the date first above written.
	
	RXR ACQUISITION SPONSOR LLC
		
	By:	 	 /s/Jason Barnett

	Name: Jason Barnett
	Title: Authorized Person

 [Signature Page to Promissory Note] 

  
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 SCHEDULE A 

Subject to the terms and conditions set forth in the Note to which this schedule is attached to, the Principal Amount due under the Note shall
be set forth in the table below and shall be updated from time to time to reflect all advances and readvances outstanding under the Note. 
  

							
	 Date
	 	 Drawing
	 	 Description
	 	 Principal Amount

	 February 18, 2022
	 	$150,000	 	Working Capital	 	$150,000
	 April 13, 2022
	 	$6,000	 	Working Capital	 	$156,000
	 April 20, 2022
	 	$144,000	 	Working Capital	 	$300,000
	 May 27, 2022
	 	$150,000	 	Working Capital	 	$450,000

  
 5

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