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EXHIBIT 10.5

 
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
Michael R. Stewart (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, the Company and the Executive previously entered into an amended and
restated employment agreement effective as of September 1, 2007 and as
subsequently amended and restated on May 6, 2008 (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 Operating Officer and
Executive Vice President 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 Executive Vice President of the Company
with duties, responsibilities and authority commensurate therewith and shall
report to the Chief Executive Officer (the “CEO”) and the President of the
Company.  The Executive shall perform all duties and accept all responsibilities
incident to such position as may be reasonably assigned to him by the CEO, the
President and the Company’s Board of Directors (the “Board”), consistent with
his position as the Executive Vice President.
 
(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 which would be breached by or prohibit the Executive from executing
this Agreement and
 

 
 

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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 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 $300,000 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.  For
each fiscal year during the Term, the Executive shall be eligible to receive a
bonus up to sixty percent (60 %) of Base Salary based on the attainment of
certain individual and corporate performance goals and targets, as determined
and set by the Board, in its sole discretion, as of the beginning of each such
fiscal year.  Promptly after the Board’s receipt of the financial information on
which the performance goals are based after the end of the fiscal year, the
Board shall review actual performance against the applicable performance goals
and targets and shall notify the Executive of the amount of his bonus, if
any.  The Executive’s bonus shall be paid to him not later than December 31 of
the year 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
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 Operating Officer and Executive Vice President.  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 vacation, holiday and sick leave at levels
commensurate with those provided to other senior executive officers of the
Company, in accordance with the Company’s vacation, holiday and other pay for
time not worked policies.
 

 
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5. Expenses; Car Allowance
 
.  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.
 
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 (at the rate in effect
immediately before the Executive’s termination, resignation, or Non-Renewal, as
applicable) 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
 

 
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subject to the expiration of the revocation period of the Release), and payable
for the balance of the Initial Term or Renewal Term, as applicable (and
retroactive to the date of the Executive’s termination, resignation or
Non-Renewal, as applicable), plus a pro rata bonus for the year in which the
Executive’s termination of employment occurs.  The pro rata bonus shall be equal
to the amount of the actual bonus that would have been paid to the Executive for
the year of termination, based upon the actual level of achievement of the
applicable performance goals, as determined by the Board, multiplied by a
fraction, the numerator of which is the number of days during which the
Executive was employed by the Company in the year of his termination and the
denominator of which is 365.  The pro-rata bonus shall be paid at the same time
other employees of the Company are paid pursuant to the terms of the Company’s
annual bonus plan, but 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
 

 
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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.
 
(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 12-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 the
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
 

 
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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 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
 

 
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grounds for termination of the Executive’s employment:
 
(1) The Executive’s breach of any of the restrictive covenants set forth in
Section 12.
 
(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.
 

 
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(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:
 
(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(c)(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.
 

 
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(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 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
 

 
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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 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
 

 
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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.

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
 

 
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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:
Kaye Scholer LLP

 
425 Park Avenue

 
New York, NY 10022

Attention: Stephen C. Koval
Fax: (212) 836-8689
and
Kaye Scholer LLP
70 W. Madison, Suite 4100
Chicago, IL 60602
Attention: Jeffrey L. London
Fax: (312) 583-2573

 
If to Executive:
Michael R. Stewart

 
 
3930 Ruckman Way

 
 
Doylestown, Pennsylvania 18902

 
 
Fax:  (215) 345-9550

 
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.
 

 
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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
___, 2011, to become effective only upon and subject to the Closing.
 

 
PHOTOMEDEX, INC.
 
By:
  /s/ Richard J. DePiano        
EXECUTIVE
    /s/ Michael R. Stewart  
Michael R. Stewart

 

 
 

 
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SCHEDULE A
 

 
CORPORATE BOARDS
 
Executive is a member of the following corporate boards as of the Effective
Date:
 

 
 
 
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