Document:

Exhibit 10.1

 

CHARLES & COLVARD, LTD.

2018 SENIOR MANAGEMENT EQUITY INCENTIVE
PROGRAM

 

Adopted January 30, 2018

 

The Charles & Colvard 2018 Senior Management Equity Incentive
Program (the “Program”) is a compensatory program established pursuant to the Charles & Colvard, Ltd. 2008 Stock
Incentive Plan (the “2008 Plan”) for the 2018 fiscal year (i.e., January 1, 2018 through June 30, 2018). 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 Vice-President and above, other than the Senior Vice President of Sales and Vice Presidents of
Sales (the “Eligible Employees”).

 

The Program supersedes and replaces all prior long-term incentive
plans or programs for all periods commencing on or after January 1, 2018.

 

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 both Company and individual
performance. The Program provides for a mixture of both performance-based and time-based vesting of equity compensation awards
to permit the Committee to tie vesting to the attainment of specific performance measures under the 2008 Plan while also encouraging
the longer-term retention of Eligible Employees.

 

Description of Awards

 

Each award (an “Award”) granted under this Program
shall consist of (1) a restricted stock award representing 70% of the Award’s value (the “Restricted Stock Component”),
to be granted to Eligible Employees upon approval of this Program, and (2) a cash bonus award representing 30% of the Award’s
value (the “Cash Component”), to be paid to Eligible Employees on the payroll date following the Vesting Date (as defined
below).

 

The value of Awards shall be expressed in “Share Equivalents,”
which is the number of shares of the Company’s restricted stock that would be granted pursuant to each Award if the Restricted
Stock Component equaled 100% of the Award. For example, if an Award is expressed as 100 Share Equivalents and all performance goals
are achieved at the 100% level (as more fully described below), the Restricted Stock Component would equal 70 Share Equivalents
and the Cash Component would equal 30 Share Equivalents. The value of the Share Equivalents shall be set on the grant date of the
Restricted Stock Component of the Awards.

 

     

     

    

 

Achievement of Awards

 

Awards granted under this Program have both performance and
service measures. Achievement of an Eligible Employee’s performance measures shall be measured by the Committee as follows:
(1) 70% of each Award shall be based on the achievement of a shared Company goal regarding revenue (the “Revenue Measure”),
(2) 10% of each Award shall be based on the achievement of a shared Company goal regarding EBITDA (together with the Revenue Measure,
the “Company Measures”) and (3) 20% of each Award shall be based on the achievement of individual performance goals
(the “Personal Measures”), all for the period from January 1, 2018 to June 30, 2018 (the “Performance Measurement
Period”). If the Company does not achieve 80% of the Revenue Measure, the Restricted Stock Component of each Award shall
be forfeited and the Cash Component of each Award shall not be paid. The Company must achieve at least 90% of the Revenue Measure
in order for the portion of the Award attributed to the Company Measures to be vested/paid, as applicable. Achievement on a sliding
scale from 90% to 120% of the Revenue Measure shall result in payment ranging from 75% to 140% of the portion of the Award attributed
to the Revenue Measure. Eligible Employees may achieve from 0% to 100% of his or her Personal Measures. The Restricted Stock Component
and Cash Component of each Award shall be reduced proportionately by any performance that is measured below 100% accordingly. The
Personal Measures and Company Measures are determined by the Committee and may be modified by the Committee during, and after the
end of, the Performance Measurement Period to reflect extraordinary, unusual, or nonrecurring events that occur during the restriction
period as permitted by the 2008 Plan. In addition, an Eligible Employee must remain in continuous service until July 31, 2018 (the
“Vesting Date”) for restrictions to fully lapse on the Restricted Stock Component and for the Cash Component to be
paid.

 

Under this Program, the Committee has granted the following
Awards:

 

	Position	Maximum Share Equivalents
	Chief Executive Officer	75,000
	Chief Financial Officer and Chief Operating Officer	37,500
	Eligible Vice President(s)	17,500

 

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

 

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

 

Any person who commences employment with the Company after January
1, 2018 may be designated an Eligible Employee for purposes of the Program for such fiscal year at the discretion of the Committee
and receive an Award with a pro-rated number of Share Equivalents.

 

    2

     

    

 

Source of Equity Compensation Awards; Coordination with 2008
Plan

 

The Restricted Stock Component of all Awards granted pursuant
to the Program shall be issued under and pursuant to the 2008 Plan. All terms, conditions, and requirements of the 2008 Plan are
expressly incorporated into the Program by reference. The Restricted Stock Component of all Awards granted pursuant to the Program
shall be evidenced by an appropriate Award Agreement in the form approved by the Committee for use under the 2008 Plan, and the
Restricted Stock Component of each Award hereunder shall be subject to the terms and conditions set forth in the applicable Award
Agreement and the 2008 Plan. To the extent there is any conflict or ambiguity between the terms of this Program and the 2008 Plan
or between this Program and any applicable Award Agreement, the terms of the 2008 Plan or the applicable 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
Award granted pursuant to the Program (without the recipient’s consent) 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 2008 Plan and applicable
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 this Program and the 2008 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-4.1

 Exhibit 4.1 

CITIBANK CREDIT CARD ISSUANCE TRUST 

Citiseries 
 Class 2018-A2 Notes 
 Issuer Certificate 

Pursuant to Sections 202 and 301(h) of the Indenture 

Reference is made to the Second Amended and Restated Indenture dated as of September 26, 2000, as amended and restated as of
August 9, 2011, and as further amended and restated as of November 10, 2016, between Citibank Credit Card Issuance Trust (the “Issuer”) and Deutsche Bank Trust Company Americas, as trustee (as so further amended and restated, the
“Indenture”). Capitalized terms used herein that are not otherwise defined have the meanings set forth in the Indenture. All references herein to designated Sections are to the designated Sections of the Indenture. 

Section 301(h) provides that the Issuer may from time to time create a tranche of Notes either by or pursuant to an Issuer Certificate
setting forth the principal terms thereof. Pursuant to this Issuer Certificate, there is hereby created a tranche of Notes having the following terms: 

Series Designation: Citiseries. This series is included in Group 1. 

Tranche Designation: $1,000,000,000 Floating Rate Class 2018-A2 Notes of January 2023 (Legal Maturity Date
January 2025) (hereinafter, the “Class 2018-A2 Notes”) 
 Currency: The Class 2018-A2 Notes will be payable, and denominated, in Dollars. 
 Denominations: The Class 2018-A2 Notes will be issuable in minimum denominations of $100,000 and multiples of $1,000 in excess of that amount. 

Issuance Date: February 1, 2018 
 Initial
Principal Amount: $1,000,000,000 
 Issue Price: 100% 

Interest Rate: The Class 2018-A2 Notes will accrue interest with respect to any interest period at a per
annum rate equal to the Class 2018-A2 Note Rate for such interest period, calculated on the basis of the actual number of days in such interest period divided by 360. The
“Class 2018-A2 Note Rate” means, with respect to the first interest period, 1.95244% per annum and, with respect to each interest period thereafter, a per annum rate equal to LIBOR for such
interest period plus 0.33%. 
 The Issuer will determine LIBOR for each applicable interest period on the second business day before the beginning of that
interest period. For purposes of calculating LIBOR, a business day is any day on which dealings in deposits in U.S. Dollars are transacted in the London interbank market. 

 “LIBOR” means, as of any date of determination, the rate for deposits in U.S. Dollars for the
Designated Maturity (commencing on the first day of the relevant interest period) which appears on the Reuters Screen LIBOR01 Page as of 11:00 a.m., London time, on such date. If such rate does not appear on the Reuters Screen LIBOR01 Page, the rate
for that day will be determined on the basis of the rates at which deposits in U.S. Dollars are offered by the Reference Banks at approximately 11:00 a.m., London time, on that day to prime banks in the London interbank market for the Designated
Maturity (commencing on the first day of the relevant interest period). The Issuer will request the principal London office of each of the Reference Banks to provide a quotation of its rate. If at least two such quotations are provided, the rate for
that day will be the arithmetic mean of the quotations. If fewer than two quotations are provided as requested, the rate for that day will be the arithmetic mean of the rates quoted by major banks in New York City, selected by the Issuer, at
approximately 11:00 a.m., New York City time, on that day for loans in U.S. Dollars to leading European banks for a period of the Designated Maturity (commencing on the first day of the relevant interest period). 

“Reuters Screen LIBOR01 Page” means the display page currently so designated on the Reuters Monitor Money Rates service (or such other page
as may replace that page on that service or any successor service for the purpose of displaying comparable rates or prices). 
 “Designated
Maturity” means one month. 
 “Reference Banks” means four major banks in the London interbank market selected by the Issuer. 

Scheduled Interest Payment Dates: The 20th day of each month, beginning March 20, 2018. 

Each payment of interest on the Class 2018-A2 Notes will include all interest accrued from and including the
preceding Interest Payment Date – or, for the first interest period, from and including the Issuance Date – to and including the day preceding the current Interest Payment Date, plus any interest accrued but not previously paid. 

The first deposit targeted to be made to the Interest Funding sub-Account for the
Class 2018-A2 Notes will be on the March 19, 2018 Interest Deposit Date and in an amount equal to $2,549,018.89. 

Expected Principal Payment Date: January 20, 2023 

Legal Maturity Date: January 21, 2025 
 Monthly
Principal Date: For the month in which the Expected Principal Payment Date occurs, January 20, 2023, and for each other month, the 20th day of such month, or if such day is not a Business Day, the next following Business Day. 

Required Subordinated Amount of Class B Notes: $59,892,100.00 

Required Subordinated Amount of Class C Notes: $79,772,100.00 

  
 2 

 Controlled Accumulation Amount: $83,333,333.33 

Form of Notes: The Class 2018-A2 Notes will be issued as Global Notes. The Global Notes will initially be
registered in the name of Cede & Co., as nominee of The Depository Trust Company, and will be exchangeable for individual Notes only in accordance with the provisions of Section 204(c). 

Additional Issuances of Class 2018-A2 Notes: The Issuer may at any time and from time to
time issue additional Class 2018-A2 Notes, subject to the satisfaction of (i) the conditions precedent set forth in Section 311(a) and (ii) the following conditions: 

 

	 	(a)	The Issuer has obtained written confirmation from each Rating Agency that there will be no Ratings Effect with respect to the then outstanding Class 2018-A2 Notes as a result
of the issuance of such additional Class 2018-A2 Notes; 

  

	 	(b)	As of the date of issuance of the additional Class 2018-A2 Notes, all amounts due and owing to the Holders of the then outstanding
Class 2018-A2 Notes have been paid and there is no Nominal Liquidation Amount Deficit with respect to the then outstanding Class 2018-A2 Notes;

  

	 	(c)	The additional Class 2018-A2 Notes will be fungible with the original Class 2018-A2 Notes for federal income tax purposes;

  

	 	(d)	If Holders of the then outstanding Class 2018-A2 Notes have the benefit of a Derivative Agreement, the Issuer will have obtained a Derivative Agreement for the benefit of the
Holders of the additional Class 2018-A2 Notes; and 

  

	 	(e)	The ratio of the Controlled Accumulation Amount to the Initial Dollar Principal Amount of the Class 2018-A2 Notes, including the additional
Class 2018-A2 Notes, will be equal to the ratio of the Controlled Accumulation Amount (before giving effect to the additional issuance) to the Initial Dollar Principal Amount of the Class 2018-A2 Notes, excluding the additional Class 2018-A2 Notes. 

As of the date of issuance of additional Class 2018-A2 Notes, the Outstanding Dollar Principal Amount and Nominal
Liquidation Amount of the Class 2018-A2 Notes will be increased to reflect the Initial Dollar Principal Amount of the additional Class 2018-A2 Notes. 

Any outstanding Class 2018-A2 Notes and any additional Class 2018-A2
Notes will be equally and ratably entitled to the benefits of the Indenture without preference, priority or distinction. 
 Optional Redemption
Provisions other than Section 1202 “Clean-Up Call”: None 
 Additional Early
Redemption Events or changes to Early Redemption Events: None 
 Additional Events of Default or changes to Events of Default: None 

  
 3 

 Business Day: means any day other than (a) a Saturday or Sunday or (b) any other day on which
national banking associations or state banking institutions in New York, New York or South Dakota, or any other state in which the principal executive offices of any Additional Seller are located, are authorized or obligated by law, executive order
or governmental decree to be closed. 
 Securities Exchange Listing: None 

  
 4 

 The Class 2018-A2 Notes shall have such other terms
as are set forth in the form of Note attached hereto as Exhibit A. Pursuant to Section 202, the form of Note attached hereto has been approved by the Issuer. 

 

			
	CITIBANK CREDIT CARD ISSUANCE TRUST
	By  	 	Citibank, N.A.,
		 	as Managing Beneficiary

 
	
	
	/s/ Bennett L. Kyte
	 Bennett L. Kyte

Vice President

 Dated: February 1, 2018 

  
 5 

 Citiseries 

Class 2018-A2 Notes 

Reference is made to the resolutions adopted by the Board of Directors of Citibank, N.A. on January 18, 2018. The resolutions authorize
Citibank, N.A. from time to time to issue and sell, or to arrange for or participate in the issuance and sale of, one or more series and/or classes of pass-through certificates, participation certificates, commercial paper, notes, bonds or other
securities representing ownership interests in, or backed or secured by, pools of credit card receivables or interests therein (the “Receivables”) in an aggregate principal amount such that up to $45,000,000,000 of such certificates,
commercial paper, notes, bonds or other securities are outstanding at any one time and to sell, transfer, convey, assign or pledge or grant a security interest in all or any portion of its Receivables to Citibank Credit Card Master Trust I, Citibank
Omni Trust or any direct or indirect subsidiaries of Citibank, N.A., affiliates of Citigroup Inc., additional trusts or other entities or trustees in connection therewith on such terms as to be determined by the Citibank, N.A. Securitization Pricing
and Loan Committee (the “Pricing and Loan Committee”). 
 The undersigned, a duly authorized member of the Pricing and Loan
Committee, on behalf of such Pricing and Loan Committee, does hereby certify that the preceding Issuer Certificate, the terms of the tranche of Notes set forth in and to be created by the Issuer Certificate and the increase in the Invested Amount of
the Collateral Certificate resulting from the issuance of such Notes have been approved by such Pricing and Loan Committee. In addition, the following underwriting/selling agent terms with respect to this tranche of Notes have been approved by the
Pricing and Loan Committee: 
  

	 	Issue	Price: 100% 

 Underwriting Commission: 0.275% 

Proceeds to Issuer: 99.725% 

Representative of the Underwriters: Citigroup Global Markets Inc. 

The preceding Issuer Certificate and this certification of Pricing and Loan Committee approval shall be, continuously from the time of their
execution, official records of Citibank, N.A. 
  

	
	/s/ Bennett L. Kyte
	Bennett L. Kyte
	 Member of the Securitization Pricing and Loan Committee

Citibank, N.A.

 Dated: February 1, 2018 

  
 6 

 Exhibit A 

FORM OF 
 CITISERIES 

FLOATING RATE CLASS 2018-A2 NOTES OF JANUARY 2023 

(Legal Maturity Date January 2025) 
  

			
	 $500,000,000
	  	REGISTERED
	 CUSIP No. 17305E GL3
	  	No. R-[1][2]

 UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
 THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN AND IN THE
INDENTURE REFERRED TO BELOW. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. 

CITIBANK CREDIT CARD ISSUANCE TRUST 

CITISERIES 
 FLOATING RATE CLASS 2018-A2 NOTES OF JANUARY 2023 
 (Legal Maturity Date January 2025) 

CITIBANK CREDIT CARD ISSUANCE TRUST, a trust formed and existing under the laws of the State of Delaware (including any successor, the “Issuer”),
for value received, hereby promises to pay to CEDE & CO., or its registered assigns, the principal amount of FIVE HUNDRED MILLION DOLLARS ($500,000,000). The Expected Principal Payment Date for this Note is January 20, 2023. The Legal
Maturity Date for this Note is January 21, 2025. 
 The Issuer hereby promises to pay interest on this Note on the 20th day of each Month, beginning
March 2018, until the principal of this Note is paid or made available for payment, subject to certain limitations set forth in the Indenture. Interest will accrue on the outstanding principal amount of this Note for each interest period in an
amount equal to the product of (i) the actual number of days in such interest period divided by 360, (ii) a rate per annum equal to the Class 2018-A2 Note Rate for such interest period, and
(iii) the outstanding principal amount of 

 
this Note as of the preceding Interest Payment Date (after giving effect to any payments of principal made on the preceding Interest Payment Date) or, with respect to the first Interest Payment
Date, the initial principal amount of this Note. The Class 2018-A2 Note Rate will be determined as provided in the Indenture. 

If any Interest Payment Date or Principal Payment Date of this Note falls on a day that is not a Business Day, the required payment of interest or principal
will be made on the following Business Day. 
 This Note is one of the Citiseries, Class 2018-A2 Notes issued
pursuant to the Second Amended and Restated Indenture dated as of September 26, 2000, as amended and restated as of August 9, 2011, and as further amended and restated as of November 10, 2016 (as so further amended and restated and
otherwise modified from time to time, the “Indenture”), between the Issuer and Deutsche Bank Trust Company Americas, as Trustee. For purposes of this Note, the term “Indenture” includes any supplemental indenture or Issuer
Certificate relating to the Citiseries, Class 2018-A2 Notes. This Note is subject to all of the terms of the Indenture. All terms used in this Note that are not otherwise defined herein and that are
defined in the Indenture will have the meanings assigned to them therein. 
 The principal of and interest on this Note are payable in such coin or currency
of the United States of America as at the time of payment is legal tender for payment of public and private debts. 
 Reference is made to the further
provisions of this Note set forth on the reverse hereof, which will have the same effect as though fully set forth on the face of this Note. 
 Unless the
certificate of authentication hereon has been executed by the Trustee whose name appears below by manual signature, this Note will not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose. 

 IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by an Issuer
Authorized Officer. 
  

					
	CITIBANK CREDIT CARD ISSUANCE TRUST
		
	By:	 	CITIBANK, N.A.,
		 	 as Managing Beneficiary of

Citibank Credit Card Issuance Trust

			
		 	By:	 	 
		 		 	 Bennett L. Kyte
 Vice President

 Dated: February 1, 2018 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION 

This is one of the Notes designated above and referred to in the within mentioned Indenture. 

 

			
	 DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Trustee under the Indenture

		
	By:	 	 
		 	Authorized Signatory

 Dated: February 1, 2018 

 REVERSE OF NOTE 

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its Citiseries Floating Rate
Class 2018-A2 Notes of January 2023 (Legal Maturity Date January 2025) (herein called the “Notes”), all issued under an Indenture, to which Indenture reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Trustee and the Holders of the Notes. 
 This Note ranks pari passu with all other
Class A Notes of the same series, as set forth in the Indenture. This Note is secured to the extent, and by the collateral, described in the Indenture. 

The Issuer will pay interest on overdue interest as set forth in the Indenture to the extent lawful. 

Each Holder by acceptance of this Note, and each owner of a beneficial interest in this Note by acceptance of a beneficial interest in this Note, agrees that
no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Trustee on the Notes, against the Issuer, the Issuer Trustee, Citibank, N.A., the Trustee or any affiliate, officer, employee or director of any
of them, and the obligation of the Issuer to pay principal of or interest on this Note or any other amount payable to the Holder of this Note will be subject to Article V of the Indenture. 

Each Holder by acceptance of this Note, and each owner of a beneficial interest in this Note by acceptance of a beneficial interest in this Note, in each case
other than Citibank, N.A. as Holder or owner, agrees that this Note is intended to be debt of Citibank, N.A. for federal, state and local income and franchise tax purposes, and agrees to treat this Note accordingly for all such purposes, unless
otherwise required by a taxing authority. 
 Each Holder by acceptance of this Note, and each owner of a beneficial interest in this Note by acceptance of a
beneficial interest in this Note, agrees that it will not at any time institute against the Issuer, or join in any institution against the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or other
proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to this Note, the Indenture or any Derivative Agreement. 

This Note and the Indenture will be construed in accordance with and governed by the laws of the State of New York. 

Certain amendments may be made to the Indenture without the consent of the Holder of this Note. This Note must be surrendered for final payment of principal
and interest. 

 ASSIGNMENT 

Social Security or taxpayer I.D. or other identifying number of assignee:
                                         
        
 FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto 

 

	
	 
	
	 
	(name and address of assignee)

 the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints
                                         
               , attorney, to transfer said Note on the books kept for registration thereof, with full power of substitution in the premises. 

 

									
	Dated:	  	 	  		 	 	 	*
		  		  		 	Signature Guaranteed:	 	

  
  

* NOTE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular
without alteration, enlargement or any change whatsoever.

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