Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(c) Effective July 17, 2009, the Board of Directors (the "Board") of Charles & Colvard, Ltd. (the "Company") appointed George R. Cattermole, the Company's current Chairman of the Board, as the Company's Interim Chief Executive Officer until the earlier of the hiring of a permanent chief executive officer or three months. While Mr. Cattermole will retain his position as Chairman of the Board, he relinquished his membership on the Company's Audit Committee, Compensation Committee, and Nominating and Governance Committee as of July 17, 2009 and for the duration of his service as Interim Chief Executive Officer as he is no longer an independent director under the NASDAQ Listing Rules.

Mr. Cattermole, age 68, has served as a director of the Company since May 2008 and as Chairman of the Board since February 2009. Since May 2005, he has served as Chairman of the Board of Directors of Outlast Technologies Inc. ("OTI"), a Boulder, Colorado technology company that provides "phase change materials" to the fiber, textile, bedding, and apparel markets worldwide. In addition, Mr. Cattermole served as President and Chief Executive Officer of OTI from October 2000 to May 2005. After attending the University of Santa Clara and University of Colorado, Mr. Cattermole joined E.I. DuPont in 1966 where he held a variety of operating, business leader, and corporate assignments, retiring in 1999 as head of Corporate Marketing.

While serving as Interim Chief Executive Officer, Mr. Cattermole will not receive compensation for his service as Chairman of the Board and will instead be compensated as an independent contractor at a rate of $6,000 per week, with 70% of such sum paid in cash on a biweekly basis and the remaining 30% to be payable in restricted stock. The amount payable in restricted stock shall accrue until the appointment of a permanent chief executive officer, at which time it shall be valued as of the close of the business day immediately prior to such appointment and immediately vested.

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