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EXHIBIT 10.9

 
 
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
 
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is entered into
by and between PhotoMedex, Inc., a Nevada corporation (the “Company”) and Dolev
Rafaeli  (the “Executive”) on July 4, 2011, to become effective as of the
closing (the “Closing”) of the transactions contemplated under the terms of that
certain Agreement and Plan of Merger executed by and between the Company, PHMD
Merger Sub, Inc., a wholly owned subsidiary of the Company, and Radiancy, Inc.
as of July 4, 2011 (the “Merger”).  If the Closing does not occur on or prior to
January 31, 2012, this Agreement shall become null and void and of no further
effect and the Prior Agreement, as defined below, shall continue in full force
and effect in accordance with its terms.
 
WHEREAS, Radiancy Inc. and the Executive previously entered into an employment
agreement effective as of June 1, 2009 and as subsequently amended based on
Radiancy Inc.’s board resolutions (the “Prior Agreement”); and
 
WHEREAS, in connection with the consummation of the Merger, the Company and the
Executive wish to amend and restate the Prior Agreement to provide for the
Executive’s continued employment as the Company’s Chief Executive Officer and
President and CEO of Radiancy Inc. following the Closing.
 
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements hereinafter set forth, the Company and the Executive hereby agree as
follows:
 
1. Employment.
 
(a) Term.  The initial term of this Agreement shall begin as of the Closing (the
“Effective Date”) and shall continue until the third anniversary thereof (the
“Initial Term”), unless sooner terminated by either party as hereinafter
provided.  In addition, the term of this Agreement shall thereafter
automatically renew for periods of one year (the “Renewal Term”) unless either
party gives written notice to the other party at least 60 days prior to the end
of the term or at least 60 days prior to the end of any one-year renewal period,
that the Agreement shall not be further extended.  The period commencing on the
Effective Date and ending on the date on which the term of the Executive’s
employment under the Agreement terminates is referred to herein as the “Term.”
 
(b) Duties.
 
(1) The Executive shall serve as the Chief Executive Officer of the Company and
President and CEO of Radiancy Inc. with duties, responsibilities and authority
commensurate therewith and shall report to the Board of Directors of the Company
(the “Board”).  The Executive shall perform all duties and accept all
responsibilities incident to such position as may be reasonably assigned to him
by the Board, consistent with his position as Chief Executive Officer.
 
(2) The Executive represents to the Company that he is not subject to or a party
to any employment agreement, non-competition covenant, understanding or
restriction
 

 
 

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which would be breached by or prohibit the Executive from executing this
Agreement and performing fully his duties and responsibilities hereunder.
 
(c) Best Efforts.  During the Term, the Executive shall devote his best efforts
and full time and attention to promote the business and affairs of the Company
and its affiliated entities, and shall be engaged in other business activities
only to the extent that such activities do not materially interfere or conflict
with his obligations to the Company hereunder.  In no event shall the
Executive’s other business activities violate his obligations under Section 12
below.  The foregoing also shall not be construed as preventing the Executive
from (1) serving on civic, educational, philanthropic or charitable boards or
committees, or, with the prior written consent of the Board, in its sole
discretion, on corporate boards, and (2) managing personal investments, so long
as such activities are permitted under the Company’s Code of Conduct and
employment policies.  The Executive acknowledges and agrees that Schedule A
represents a complete list of all corporate boards on which the Executive serves
as of the Effective Date.  Notwithstanding any provision of this Section 1 of
the Agreement to the contrary, in no event shall the Executive invest in any
business competitive with the Company or that would otherwise violate the
provisions of Section 12 below.
 
2. Base Salary and Cash Bonus.  During the Term, for all of the services
rendered by the Executive hereunder, the Company shall pay the Executive a base
salary (“Base Salary”), at the annual rate of $450,000 payable in semi-monthly
installments at such times as the Company customarily pays its other
employees.  The Executive’s Base Salary shall be reviewed periodically by the
Board (or a committee of the Board) pursuant to the Board’s normal performance
review policies for senior level executives.  During the Term, as a Bonus for
success in sales, the Executive shall be entitled to a quarterly cash bonus (the
“Cash Bonus”) equal to 1% of the sales of the Company (calculated as 1% of
recognized US GAAP sales reported in the Company’s consolidated quarterly
financial reports presented to the Company’s Board). Payments will be made to
the order of the Executive no later than 45 days after the presentation of the
financial reports to the Board.
 
For removal of doubt, should the Company furnish the Executive with a
Termination Notice in any case other than for cause (as defined in section
10(a), the Executive shall be entitled to the Cash Bonus equal to 1% of the US
GAAP sales reported in the Company’s financial reports through the end of the
Initial Term or Renewal Term, as applicable, as if the Company had not furnished
Executive with such Termination Notice.
 
Executive’s Cash Bonus shall be adjusted according to any restatement of US GAAP
sales, provided that a downward revision of US GAAP sales shall not require
Executive to return any portion of the Cash Bonus, and such adjustment shall
instead be set off against the next applicable Cash Bonus. Notwithstanding the
forgoing, if a downward adjustment is made to US GAAP sales following
Executive’s final Cash Bonus or Executive’s termination of employment with the
Company for any reason, Executive shall reimburse the Company accordingly.

The Cash Bonus shall be paid to the Executive at the time specified above and in
no event later than March 15 of the year immediately following the year to which
it relates. Any bonus other than the Cash Bonus shall be paid to the Executive
no later than December 31 of the year

 
 

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following the end of the fiscal year to which it relates, under the same
conditions as other executives of the Company.
 
3. Retirement and Welfare Benefits.  The Executive shall be eligible to continue
to participate in the Company’s (or Radiancy Inc.’s where relevant) health, life
insurance, long and short-term disability, dental, retirement, savings and
medical programs, if any, pursuant to their respective terms and conditions.  In
addition, the Executive shall continue to be eligible to participate in any
long-term equity incentive programs established by the Company for its senior
level executives generally, at levels determined by the Board in its sole
discretion, commensurate with the Executive’s position as Chief Executive
Officer.  Nothing in this Agreement shall preclude the Company or any affiliate
of the Company from terminating or amending any employee benefit plan or program
from time to time after the Effective Date.
 
4. Vacation.
 
The Executive shall be entitled to annual vacation of 24 days plus ten
established holiday days per full calendar year of his employment with the
Company hereunder.  Any unused vacation in one accrued calendar year may not be
carried over to any subsequent calendar year.  The Company shall, however, pay
the Employee (based on the Employee's annual salary) for any such unused
vacation days within 30 days of the end of any such calendar year.

 
The Executive shall be entitled to an annual medical executives' checkup at the
expense of the Company.
 
The Executive shall be entitled to a fully paid sick leave until the end of the
waiting period for coverage against disability or incapacity as defined in the
Executive medical insurance policy.

5. Expenses; Car Allowance, Phone and Cellular Phone; Relocation costs; Family
annual leave.  The Company shall reimburse the Executive for all necessary and
reasonable travel and other business expenses incurred by the Executive in the
performance of his duties hereunder in accordance with such reasonable
accounting procedures as the Company may adopt generally from time to time for
executives.  In addition, the Executive shall be entitled to an automobile
allowance of $1,000 per month.
 
Company shall provide Executive with a Cellular Phone and shall order a land
line at the Executive's residence, for Executive’s use in the course of
performing his obligations under his Position. The Company shall bear and pay
all the expenses related to the Cellular Phone and the land line and their use
thereof.
 
Upon termination of this Agreement for any reason, Company shall pay for the
household relocation costs including the packing, shipping, insurance and
unpacking of the goods of the Executive between the US and Israel. Company will
reimburse the Executive for all reasonable out of pocket relocation expenses.
Additionally, Company shall pay for the equivalent of economy class airfare
tickets of all family members between the US and Israel. Company shall pay for
the equivalent of economy round trip airfare tickets for all family members for
an annual home leave between the US and Israel.
 

 
 

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All expense reimbursements under this Agreement shall be made no later than the
end of the calendar year following the year in which expenses are incurred.

6. Termination Without Cause:  Resignation for Good Reason; Non-Renewal.  If the
Executive’s employment is terminated by the Company without Cause (as defined in
Section 10) or if the Executive resigns for Good Reason (as defined in
Section 10), or in the event the Company fails to renew the Agreement in
accordance with Section 1(a) above (“Non-Renewal”) the provisions of this
Section 6 shall apply.
 
(a) The Company may terminate the Executive’s employment with the Company at any
time without Cause upon not less than 30 days’ prior written notice to the
Executive; provided that, in the event that such notice is given, the Executive
shall be under no obligation to render any additional services to the Company
and shall be allowed to seek other employment.  In addition, the Executive may
initiate a termination of employment by resigning under this Section 6 for Good
Reason.  The Executive shall give the Company not less than 30 days’ prior
written notice of such resignation.  On the date of termination, resignation or
Non-Renewal, as applicable, specified in such notice, the Executive agrees to
resign all positions, including as an officer and, if applicable, as a director
or member of the Board, related to the Company and its parents, subsidiaries and
affiliates.
 
(b) Unless the Executive complies with the provisions of Section 6(c) below,
upon termination or resignation under Section 6(a) above, or upon Non-Renewal,
the Executive shall be entitled to receive only the amount due to the Executive
under the Company’s then current severance pay plan or arrangement for
employees, if any, but only to the extent not conditioned on the execution of a
release by the Executive.  No other payments or benefits shall be due under this
Agreement to the Executive, but the Executive shall be entitled to receive any
amounts earned, accrued and owing but not yet paid under Section 2 above and any
benefits accrued and due under any applicable benefit plans and programs of the
Company.
 
(c) Notwithstanding the provisions of Section 6(b), upon termination or
resignation, as applicable, under Section 6(a) above, or upon Non-Renewal, if,
within forty-five (45) days following the termination of the Executive’s
employment, the Executive executes and does not revoke a written release, in a
form acceptable to the Company, in its sole discretion, of any and all claims
against the Company and all related parties with respect to all matters arising
out of the Executive’s employment by the Company, or the termination thereof
(other than claims for any entitlements under the terms of this Agreement) (the
“Release”), the Executive shall be entitled to receive, in lieu of the payment
described in Section 6(b) and any other payments due under any severance plan or
program for employees or executives, the following payments and benefits:
 
(1) The Executive shall continue to receive his salary and Cash Bonus (at the
rate in effect immediately before the Executive’s termination, resignation, or
Non-Renewal, as applicable). The salary shall be paid in installments in
accordance with the Company’s normal payroll practices with the first payment
beginning on the 30th day following the receipt by the Company of the executed
Release (and subject to the expiration of the revocation period of the Release).
The Cash Bonus shall be equal to 1% of the sales of the Company (calculated as
1% of recognized US GAAP sales reported in the Company’s consolidated quarterly
financial reports
 

 
 

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presented to the Company’s Board). Payment of Cash Bonuses will be made to the
order of the Executive no later than 45 days after the presentation of the
quarterly financial reports to the Board. Both the Executive salary as well as
the Cash Bonus shall be payable for the balance of the Initial Term or Renewal
Term, as applicable, as if Executive’s employment with the Company had not
terminated (and retroactive to the date of the Executive’s termination,
resignation or Non-Renewal, as applicable).  For removal of doubt, any bonus
other than the Cash Bonus shall be paid not later than December 31 of the year
following the end of the fiscal year to which the bonus relates.
 
(2) Continued medical and dental coverage for the remainder of the Initial Term
or Renewal Term, as applicable, or, if less, for the 18-month period following
the Executive’s termination, resignation, or Non-Renewal, as applicable, or
until the date on which the Executive is eligible for coverage under a plan
maintained by a new employer or under a plan maintained by his spouse’s
employer, whichever is sooner, at the level in effect at the date of his
termination, resignation, or Non-Renewal, as applicable (or generally comparable
coverage) for himself and, where applicable, his spouse and dependents, as the
same may be changed by the Company from time to time for employees generally, as
if the Executive had continued in employment during such period.  The COBRA
health care continuation coverage period under section 4980B of the Internal
Revenue Code of 1986, as amended (the “Code”) shall run concurrently with the
foregoing period.
 
(3) Continued long and short-term disability coverage for the remainder of the
Initial Term or Renewal Term, as applicable, following the Executive’s
termination, resignation, or Non-Renewal, as applicable at the level in effect
at the date of his termination, resignation, or Non-Renewal, as applicable (or
generally comparable coverage), as the same may be changed by the Company from
time to time for employees generally, as if the Executive had continued in
employment during such period; provided, however that if long and short-term
disability coverage is unavailable, the Executive shall receive a monthly
payment beginning on the 30th day following the receipt by the Company of the
executed Release and continuing on the first payroll date of each month
thereafter (and subject to the expiration of the revocation period of the
Release), and equal to the premium cost that the Company would incur during the
month to maintain long and short-term disability coverage that is substantially
similar to the disability coverage that was in effect for the Executive under
plans of the Company immediately before his termination, resignation, or
Non-Renewal, as applicable, less the amount that the Executive would be required
to contribute for disability coverage, if any, if the Executive were an active
employee.
 
(4) For the remainder of the Initial Term or Renewal Term, as applicable,
following the Executive’s termination, resignation, or Non-Renewal, as
applicable, a monthly payment beginning on the 30th day following the receipt by
the Company of the executed Release (and subject to the expiration of the
revocation period of the Release) and continuing on the first payroll date of
each month thereafter, and equal to the premium cost that the Company would
incur during the month to maintain life insurance coverage that is substantially
similar to the life insurance coverage that was in effect for the Executive
under a plan of the Company immediately before his termination, resignation, or
Non-Renewal, as applicable, less the amount that the Executive would be required
to contribute for life insurance coverage, if any, if the Executive were an
active employee.
 

 
 

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(5) On each date on which a payment is made under subsection 6(c)(4) above (and
6(c)(3) if the disability coverage is taxable to the Executive), the Company
will pay the Executive an additional tax gross-up amount equal to the federal,
state and local income and payroll taxes that the Executive incurs on the amount
paid under subsection 6(c)(3) and (4), as applicable, and on the amount paid
under this subsection 6(c)(5), on that date.  This gross up payment will be made
with respect to each payment under subsection 6(c)(3) and (4), as applicable,
and will cease when payments under subsection 6(c)(3) and (4), as applicable,
cease.
 
(6) Notwithstanding any provision to the contrary in any applicable plan,
program or agreement, all outstanding equity awards held by the Executive as of
the date of his termination, resignation, or Non-Renewal, as applicable, shall
become fully vested and exercisable as of such date.  In addition, any
outstanding stock options held by the Executive, including any stock options
that previously became exercisable and have not expired or been exercised, shall
remain exercisable, notwithstanding any provision to the contrary in any other
agreement governing such options, for the shorter of (1) the 60-month period
following the date of the Executive’s termination, resignation or Non-Renewal,
as applicable, or (2) the then remaining term of such stock option.
 
(7) Any other amounts earned, accrued and owing but not yet paid under Section 2
above and any benefits accrued and due under any applicable benefit plans and
programs of the Company.
 
(8) Notwithstanding any provision of this Agreement to the contrary, if the
Executive is a key employee of the Company under section 409A of the Code at the
time of his separation from service and if payment of any amount under this
Agreement is required to be delayed for a period of six months after separation
from service pursuant to section 409A, payment of such amount shall be delayed
as required by section 409A, and the accumulated postponed amount shall be paid
in a lump sum payment within 10 days after the end of the six-month period.  If
the Executive dies during the postponement period prior to the payment of
postponed amount, the amounts withheld on account of section 409A shall be paid
to the personal representative of the Executive’s estate within 60 days after
the date of the Executive’s death.  A “key employee” shall mean an employee who,
at any time during the 12-month period ending on the identification date, is a
“specified employee” under section 409A of the Code, as determined by the
Board.  The determination of key employees, including the number and identity of
persons considered key employees and the identification date, shall be made by
the Board in accordance with the provisions of sections 416(i) and 409A of the
Code and the regulations issued thereunder.
 
(9) For purposes of section 409A, the right to a series of installment payments
under this Section shall be treated as a right to a series of separate payments,
all payments to be made upon the Executive’s termination of employment under
this Agreement may only be made upon a ‘separation from service’ as provided in
section 409A of the Code and each payment made under the Agreement shall be
treated as a separate payment except as permitted under section 409A of the
Code.  In no event may the Executive, directly or indirectly, designate the
calendar year of payment.  Notwithstanding Section 6(c)(8) above, an amount up
to the Code section 402(g)(1)(B) limit ($16,500 for 2011, as adjusted) payable
under Sections 6(c)(4) above (and 6(c)(3) if the disability coverage is taxable
to the Executive) shall be considered exempt
 

 
 

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from section 409A of the Code as a “limited payment” under a separation pay
plan.  Any amounts payable under Sections 6(c)(3) and (4) above, as applicable,
that total more than the Code section 402(g)(1)(B) limit, shall be subject to
the six-month delay described in Section 6(c)(8) above.
 
(d) All reimbursements and in kind benefits, if any, provided under this
Agreement shall be made or provided in accordance with the requirements of
section 409A, including, where applicable, the requirement that (i) any
reimbursement is for expenses incurred during the Executive’s lifetime (or
during a shorter period of time specified in this Agreement), (ii) the amount of
expenses eligible for reimbursement, or in kind benefits provided, during a
fiscal year may not affect the expenses eligible for reimbursement, or in kind
benefits to be provided, in any other fiscal year, (iii) the reimbursement of an
eligible expense will be made on or before the last day of the fiscal year
following the year in which the expense is incurred, and (iv) the right to
reimbursement or in kind benefits is not subject to liquidation or exchange for
another benefit.
 
7. Voluntary Termination.  The Executive may voluntarily terminate his
employment for any reason upon 30 days’ prior written notice.  In such event,
after the effective date of such termination, no payments shall be due under
this Agreement, except that the Executive shall be entitled to any amounts
earned, accrued and owing but not yet paid under Section 2 above and any
benefits accrued and due under any applicable benefit plans and programs of the
Company.
 
8. Disability.  If the Executive incurs a Disability (as defined below) during
the Term, the Company may terminate the Executive’s employment on account of
Disability subject to the requirements of applicable law.  If the Company
terminates the Executive’s employment on account of his Disability, the
Executive shall be entitled to receive any amounts earned, accrued and owing but
not yet paid under Section 2 above and any benefits accrued and due under any
applicable benefit plans and programs of the Company.  For purposes of this
Agreement, the term “Disability” shall have the same meaning as under the
Company’s long-term disability plan.
 
9. Death.  If the Executive dies while employed by the Company, the Executive’s
employment shall terminate on the date of death and the Company shall pay to the
Executive’s executor, legal representative, administrator or designated
beneficiary, as applicable, any amounts earned, accrued and owing but not yet
paid under Section 2 above and any benefits accrued and due under any applicable
benefit plans and programs of the Company.  Otherwise, the Company shall have no
further liability or obligation under this Agreement to the Executive’s
executors, legal representatives, administrators, heirs or assigns or any other
person claiming under or through the Executive.
 
10. Definitions.
 
(a) Cause.  For purposes of this Agreement, “Cause” shall mean any of the
following grounds for termination of the Executive’s employment:
 
(1) The Executive’s breach of any of the restrictive covenants set forth in
Section 12.
 

 
 

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(2) The Executive’s conviction of a felony or a crime involving moral turpitude.
 
(3) The Executive’s material violation of any written Company policy or the
material terms of this Agreement.
 
(4) The Executive’s failure to follow a lawful direction of the Board.
 
(5) Drug or alcohol abuse by the Executive, but only if the Executive fails to
seek appropriate counseling or fails to complete a prescribed counseling
program.
 
With respect to Items (3) and (4), a termination for Cause shall only be
effective if the violation or failure is not cured by the Executive within the
20-day period following written notice from the Board of the specific grounds
that could result in a termination for “Cause;” provided that the Executive
shall only have an opportunity to cure a failure to the extent the failure is
curable, as determined by the Board in its sole discretion.
 
(b) Change of Control.  As used herein, a “Change of Control” shall be deemed to
have occurred if:
 
(1) Any “person,” as such term is used in sections 13(d) and 14(d) of Securities
Exchange Act of 1934, as amended (the “Exchange Act”) (other than a person who
is a stockholder of the Company on the effective date of the Plan) becomes a
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing more than 50% of the
voting power of the then outstanding securities of the Company; provided that a
Change of Control shall not be deemed to occur as a result of a transaction in
which the Company becomes a subsidiary of another corporation and in which the
stockholders of the Company, immediately prior to the transaction, will
beneficially own, immediately after the transaction, shares entitling such
stockholders to more than 50% of all votes to which all stockholders of the
parent corporation would be entitled in the election of directors; or
 
(2) The consummation of (i) a merger or consolidation of the Company with
another corporation where the stockholders of the Company, immediately prior to
the merger or consolidation, will not beneficially own, immediately after the
merger or consolidation, shares entitling such stockholders to more than 50% of
all votes to which all stockholders of the surviving corporation would be
entitled in the election of directors, (ii) a sale or other disposition of all
or substantially all of the assets of the Company, or (iii) a liquidation or
dissolution of the Company.
 
The Company and the Executive agree that the transactions contemplated under the
Merger shall not be considered a Change of Control for purposes of this
Agreement.
 
(c) Good Reason.  The occurrence of one or more of the following actions, to
which the Executive objects in writing to the Board within 10 business days
following initial notification of its occurrence or proposed occurrence (the
“Board Notice”), and which action is not then rescinded within 20 days after
delivery of such notice:
 

 
 

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(1) A change of the principal office or work place assigned to the Executive to
a location more than 20 miles distant from its location immediately prior to
such change.
 
(2) A material reduction by the Company of the Executive’s title, duties,
responsibilities, authority, status, reporting relationship or the Executive’s
position.
 
(3) A reduction of the Executive’s base salary or bonus opportunity, unless
pursuant to a reduction in such items applicable proportionally to all senior
management and board members.
 
(4) Any reason or no reason following a Change of Control, provided that the
Executive’s notice of resignation under this subsection 10(b)(4) is provided to
the surviving entity following the Change of Control, within the 30-day period
following the six-month anniversary of such Change of Control.
 
The foregoing notwithstanding, with respect to subparagraphs (1), (2) and (3)
above, Good Reason shall not exist unless the Board fails to cure the event
specified in the Board Notice as constituting Good Reason within twenty (20)
days of its receipt of the Board Notice.
 
11. Section 409A.  This Agreement shall be interpreted to avoid any penalty
sanctions under section 409A of the Code.  If any payment or benefit cannot be
provided or made at the time specified herein without incurring sanctions under
section 409A, then such benefit or payment shall be provided in full at the
earliest time thereafter when such sanctions will not be imposed.
 
12. Property Rights and Obligations of the Executive.
 
(a) Trade Secrets.  For purposes of this Agreement, “trade secrets” shall
include without limitation any and all financial, cost and pricing information
and any and all information contained in any drawings, designs, plans,
proposals, customer lists, records of any kind, data, formulas, specifications,
concepts or ideas, where such information is reasonably related to the business
of the Company, has been divulged to or learned by the Executive during the term
of his employment by the Company, and has not previously been publicly released
by duly authorized representatives of the Company or otherwise lawfully entered
the public domain.
 
(b) Preservation of Trade Secrets.  The Executive will preserve as confidential
all trade secrets pertaining to the Company’s business that have been obtained
or learned by him by reason of his employment.  The Executive will not, without
the prior written consent of the Company, either use for his own benefit or
purposes or disclose or permit disclosure to any third parties, either during
the term of his employment hereunder or thereafter (except as required in
fulfilling the duties of his employment), any trade secret connected with the
business of the Company.
 
(c) Trade Secrets of Others.  The Executive agrees that he will not disclose to
the Company or induce the Company to use any trade secrets belonging to any
third party.
 
(d) Property of Employer.  The Executive agrees that all documents, reports,
files, analyses, drawings, designs, tools, equipment, plans (including, without
limitation, marketing
 

 
 

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and sales plans), proposals, customer lists, computer software or hardware, and
similar materials that are made by him or come into his possession by reason of
and during the term of his employment with the Company are the property of the
Company and shall not be used by him in any way adverse to the Company’s
interests.  The Executive will not allow any such documents or things, or any
copies, reproductions or summaries thereof to be delivered to or used by any
third party without the specific consent of the Company.  The Executive agrees
to deliver to the Board or its designee, upon demand, and in any event upon the
termination of the Executive’s employment, all of such documents and things
which are in the Executive’s possession or under his control.
 
(e) Non-Competition and Non-Solicitation by the Executive.
 
(1) General.  The Executive agrees during the Term, and for any period during
which the Executive is receiving payments under Section 6(b) or 6(c), and for
the one (1) year period thereafter or, in the event of a termination for Cause
or a resignation by the Executive pursuant to Section 7, for the two (2) year
period following such termination, not to recruit, engage in passive efforts,
solicit or induce any person or entity who, during such one year period, or
within one year prior to the termination of the Executive’s employment with the
Company, was an employee, agent, representative or sales person of the Company
or any of its affiliates (the “Company Group”) to leave or cease his employment
or other relationship with the Company Group for any reason whatsoever or hire
or engage the services of such person for the Executive in any business
substantially similar to or competitive with that in which the Company Group was
engaged during the Executive’s employment.
 
(2) Non-Solicitation of Customers.  The Executive acknowledges that in the
course of his employment, he has learned and will continue to learn about the
Company Group’s business, services, materials, programs and products and the
manner in which they are developed, marketed, served and provided.  The
Executive knows and acknowledges that the Company Group has invested
considerable time and money in developing its programs, agreements, offices,
representatives, services, products and marketing techniques and that they are
unique and original.  The Executive further acknowledges that the Company Group
must keep secret all pertinent information divulged to the Executive about the
Company Group’s business concepts, ideas, programs, plans and processes, so as
not to aid the Company Group’s competitors.  Accordingly, the Company Group is
entitled to the following protection, which the Executive agrees is reasonable:
 
(i) The Executive agrees that during the Term, and for any period during which
the Executive is receiving payments under Section 6(b) or 6(c), and for the one
(1) year period thereafter or, in the event of a termination for Cause or a
resignation by the Executive pursuant to Section 7, for the two (2) year period
following such termination, he will not, on his own behalf or on behalf of any
person, firm, partnership, association, corporation, or other business
organization, entity or enterprise, knowingly solicit, call upon, or initiate
communication or contact with any person or entity or any representative of any
person or entity, with whom the Executive had contact during his employment,
with a view to the sale or the providing of any product, equipment or service
sold or provided or under development by the Company Group during the period of
two years immediately preceding the date of the Executive’s termination.  The
restrictions set forth in this section shall apply only to persons or
 

 
 

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entities with whom the Executive had actual contact during the two years prior
to termination of his employment with a view toward the sale or providing of any
product, equipment or service sold or provided or under development by the
Company Group.
 
(3) Non-Competition.  The Executive acknowledges that he will be a “high impact”
person in the Company Group’s business who is in possession of selective and
specialized skills, learning abilities, customer contacts, and customer
information as a result of his relationship with the Company Group and prior
experience, and agrees that the Company Group has a substantial business
interest in the covenant described below.  The Executive, therefore, agrees for
the Term, and for any period during which the Executive is receiving payments
under Section 6(b) or 6(c), and for the one (1) year period thereafter or, in
the event of a termination for Cause or a resignation by the Executive pursuant
to Section 7, for the two (2) year period following such termination, not to,
either directly, whether as an employee, sole proprietor, partner stockholder,
joint venture or the like, in the same or similar capacity in which he worked
for the Company Group, compete with the Company Group in any field in which the
Company Group has entered into, enters into during the Executive’s employment
with the Company Group or is considering entering into at the time of the
Executive’s termination of employment, provided the Executive has actual
knowledge of such field.  The territory in which this non-competition covenant
shall apply will be limited to the area commensurate with the territory in which
the Executive marketed, sold or provided products or services for the Company
Group during the two years preceding termination of employment.
 
(4) Survival Provisions.  Unless otherwise agreed to in writing between the
parties hereto, the provisions of this Section 12 shall survive the termination
of this Agreement.  The covenants in this Section 12 shall be construed as
separate covenants and to the extent any covenant shall be judicially
unenforceable, it shall not affect the enforcement of any other covenant.
 
13. Legal and Equitable Remedies.  Because the Executive’s services are personal
and unique and the Executive has had and will continue to have access to and has
become and will continue to become acquainted with the proprietary information
of the Company, and because any breach by the Executive of any of the
restrictive covenants contained in Section 12 would result in irreparable injury
and damage for which money damages would not provide an adequate remedy, the
Company shall have the right to enforce Section 12 and any of its provisions by
injunction, specific performance or other equitable relief, without bond and
without prejudice to any other rights and remedies that the Company may have for
a breach, or threatened breach, of the restrictive covenants set forth in
Section 12.  The Executive agrees that in any action in which the Company seeks
injunction, specific performance or other equitable relief, the Executive will
not assert or contend that any of the provisions of Section 12 are unreasonable
or otherwise unenforceable.  The Executive irrevocably and unconditionally
(a) agrees that any legal proceeding arising out of this paragraph may be
brought in the United States District Court for the Eastern District of
Pennsylvania, or if such court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in Philadelphia,
Pennsylvania, (b) consents to the non-exclusive jurisdiction of such court in
any such proceeding, and (c) waives any objection to the laying of venue of any
such proceeding in any such court.  The Executive also irrevocably and
unconditionally consents to the service of any process, pleadings, notices or
other papers.
 

 
 

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14. Arbitration; Expenses.  In the event of any dispute under the provisions of
this Agreement, other than a dispute in which the primary relief sought is an
equitable remedy such as an injunction, the parties shall be required to have
the dispute, controversy or claim settled by arbitration in Philadelphia,
Pennsylvania in accordance with the Employment Arbitration Rules and Mediation
Procedures then in effect of the American Arbitration Association, before an
arbitrator agreed to by both parties.  If the parties cannot agree upon the
choice of arbitrator, the Company and the Executive will each choose an
arbitrator.  The two arbitrators will then select a third arbitrator who will
serve as the actual arbitrator for the dispute, controversy or claim.  Any award
entered by the arbitrators shall be final, binding and nonappealable and
judgment may be entered thereon by either party in accordance with applicable
law in any court of competent jurisdiction.  This arbitration provision shall be
specifically enforceable.  The arbitrators shall have no authority to modify any
provision of this Agreement or to award a remedy for a dispute involving this
Agreement other than a benefit specifically provided under or by virtue of the
Agreement.  Each party shall be responsible for its own expenses relating to the
conduct of the arbitration (including reasonable attorneys’ fees and expenses)
and shall share the fees of the American Arbitration Association.
 
15. Attorneys’ Fees.  Except as provided in Section 14 above, in any action at
law or in equity to enforce or construe any provisions or rights under this
Agreement, the unsuccessful party or parties to such litigation, as determined
by the courts pursuant to a final judgment or decree, shall pay the successful
party or parties all costs, expenses, and reasonable attorneys’ fees incurred by
such successful party or parties (including, without limitation, such costs,
expenses, and fees on any appeals), and if such successful party or parties
shall recover judgment in any such action or proceedings, such costs, expenses,
and attorneys’ fees shall be included as part of such judgment.
 
16. Survival.  The respective rights and obligations of the parties hereunder
shall survive the termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
 
17. No Mitigation or Set Off.  In no event shall the Executive be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement
and such amounts shall not be reduced, regardless of whether the Executive
obtains other employment.  The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Executive or others.
 
18. Notices.  All notices and other communications required or permitted under
this Agreement or necessary or convenient in connection herewith shall be in
writing and shall be deemed to have been given when hand delivered or mailed by
registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):
 
If to the Company, to:
PhotoMedex, Inc.
147 Keystone Dr.
Montgomeryville, Pennsylvania  18936
Fax:  (215) 619-3208
   
With a copy to:
     
If to Executive:
Dolev Rafaeli
30 Roosevelt St
Cresskill, New Jersey  07626
   

 
 

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19. Withholding.  All payments under this Agreement shall be made subject to
applicable tax withholding, and the Company shall withhold from any payments
under this Agreement all federal, state and local taxes as the Company is
required to withhold pursuant to any law or governmental rule or
regulation.  The Executive shall bear all expense of, and be solely responsible
for, all federal, state and local taxes due with respect to any payment received
under this Agreement.

20. Remedies Cumulative; No Waiver.  No remedy conferred upon a party by this
Agreement is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to any other remedy
given under this Agreement or now or hereafter existing at law or in equity.  No
delay or omission by a party in exercising any right, remedy or power under this
Agreement or existing at law or in equity shall be construed as a waiver
thereof, and any such right, remedy or power may be exercised by such party from
time to time and as often as may be deemed expedient or necessary by such party
in its sole discretion.
 
21. Assignment.  All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, executors, administrators, legal representatives, successors and assigns
of the parties hereto, except that the duties and responsibilities of the
Executive under this Agreement are of a personal nature and shall not be
assignable or delegable in whole or in part by the Executive.  In the case of
any sale (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) of all or substantially all of the business or
assets of the Company, the Company shall either (1) prior to such succession,
require the successor to such assets to expressly to assume and agree to perform
this Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had taken place or (2) prior to such
succession, reserve sufficient assets to perform and thereafter perform this
Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had taken place, and the Executive
acknowledges that in such event the obligations of the Executive hereunder,
including but not limited to those under Section 12, will continue to apply in
favor of the successor. The obligations to Executive required to be performed by
a successor entity (or by the Company, if the Company so elects in the case of a
sale of assets) shall include but not be limited to the obligation to pay the
Cash Bonus, provided that the amount of such Cash Bonus shall be measured as 1%
of the US GAAP sales attributable solely to the former assets of the Company, as
they perform in hands of the successor.
 

 
 

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22. Entire Agreement.  This Agreement sets forth the entire agreement of the
parties hereto and supersedes any and all prior agreements and understandings
concerning the Executive’s employment by the Company, including, without
limitation, the Prior Agreement.  This Agreement may be changed only by a
written document signed by the Executive and the Company.
 
23. Severability.  If any provision of this Agreement or application thereof to
anyone or under any circumstances is adjudicated to be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect any
other provision or application of this Agreement which can be given effect
without the invalid or unenforceable provision or application and shall not
invalidate or render unenforceable such provision or application in any other
jurisdiction.  If any provision is held void, invalid or unenforceable with
respect to particular circumstances, it shall nevertheless remain in full force
and effect in all other circumstances.
 
24. Choice of Law and Forum.  Except as expressly provided otherwise in this
Agreement, this Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, and both parties consent to the jurisdiction
of the courts of the State of Delaware with respect thereto.
 
25. Counterparts.  This Agreement may be executed in any number of counterparts
(including facsimile counterparts), each of which shall be an original, but all
of which together shall constitute one instrument.
 
[SIGNATURE PAGE FOLLOWS]
 

 
 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of July
4, 2011, to become effective only upon and subject to the Closing.
 
 
 

 
PHOTOMEDEX, INC.
 
By:
/s/ Richard DePiano     
       
EXECUTIVE
 
/s/ Dolev Rafaeli      
 
Dolev Rafaeli

 

 
 

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SCHEDULE A
 

 
CORPORATE BOARDS
 
Executive is a member of the following corporate boards as of the Effective
Date:
 
•  
Radiancy Inc.

 
 
 

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