NexMed,
Inc.

     

    Restricted
Stock Award Agreement

    


         This
Restricted Stock Award Agreement (the “Agreement”) is dated as of
[         ] and is entered into
between NexMed, Inc., a Nevada corporation (the “Company”), and
[              ]
(the “Awardee”). 

    


    RECITALS

    


    A.          The Company’s Board of
Directors, acting directly or through its Compensation Committee, approved the
grant of an award representing the right to receive shares of Common Stock, par
value $0.001 per share (the “Common
Stock”) upon the vesting schedule set forth below in Section 2 (the
“Award”).

     

    B.     
     The Award is granted
outside of the Company’s 2006 Stock Incentive Plan (the “Plan”), but is
governed in all other respects as if granted under the Plan. Capitalized terms
not otherwise defined herein shall have the
meanings ascribed to them in the Plan.

     

    C.           The Award is intended to qualify as an “inducement grant”
under the exception to the shareholder approval requirements under NASDAQ
Marketplace Rule 5635(c)(4).

     

    


    AGREEMENT

     

         In
consideration of the mutual promises set forth below, the parties hereto agree
as follows:

    


         1.    Grant of Award.
Subject to the terms and conditions of this Agreement and the Plan (the terms of
which are incorporated herein by reference) and effective as of the date set
forth above, the Company hereby grants to the Awardee the Award, representing
the right to receive up to _________ shares of Common Stock subject to the
vesting conditions below.

    


         2.    Vesting.  The
Award shall vest as follows:

    


         3.    Effect of
Termination.  Following the termination of Awardee’s service to
the Company or any subsidiary, the unvested portions of the Award, if any, as of
the date of termination shall be forfeited.

     

         4.    Distribution.  Stock
certificates (the “Certificate”) evidencing the vested shares of Common Stock
underlying the Award (“Shares”) shall be issued and registered in the Awardee’s
name promptly following a particular Vesting Date.  Notwithstanding
the foregoing, the distribution of Shares and the issuance of the Certificates
may be deferred beyond the vesting date if the Awardee (a) elects to make a
deferral within thirty days from the date of grant and (b) executes and delivers
a deferral election form, which is attached hereto as Exhibit
A.  In the case of Awardee’s death, Certificates shall be
delivered to the Awardee’s beneficiary or estate as soon as
practicable.  If a deferral election has been made, the distribution
of the Shares and the issuance of the certificates shall occur at the time
provided in the deferral election.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

         5.    Dividends.  The
Awardee shall not be entitled to receive any dividends paid on the Common Stock
until the Shares have been delivered in accordance with this Agreement, at which
time the Awardee will thereafter be entitled to receive dividends with respect
to the Shares.

    


         6.    Tax Withholding
Obligations.  In circumstances in which tax withholding is
applicable, to meet any such obligations of the Company and Awardee that might
arise with respect to any withholding taxes, FICA contributions, or the like
under any federal, state, or local statute, ordinance, rule, or regulation in or
connection with the award, deferral, or settlement of the Award, the Awardee
shall remit to the Company an amount of cash sufficient to meet the withholding
requirements and/or the Company shall
withhold the required amounts from the Awardee’s pay. Notwithstanding the
foregoing, the Committee may, in its sole discretion, allow Awardee to satisfy
such withholding obligations upon settlement of the Award by withholding a
number of Shares having a fair market value equal to the Company’s statutory
withholding obligations. The Company shall not deliver any of the Certificates
until and unless the Awardee has made the payment(s) required herein or proper
provision for required withholding has been made. The Awardee hereby consents to
any action reasonably taken by the Company to meet the withholding
obligations.

     

         7.    Restriction on
Transferability. The Award may not be sold, transferred, pledged,
assigned, or otherwise alienated at any time. Any attempt to do so contrary to
the provisions hereof shall be null and void. Notwithstanding the above,
transfers can be made pursuant to intra-family transfer instruments or to an
inter vivos trust. 

     

         8.    Rights as
Shareholder. The Awardee shall not have voting or any other rights as a
shareholder of the Company with respect to the Award. Upon settlement of the
Award into Shares, the Awardee will obtain full voting and other rights as a
shareholder of the Company with respect to such Shares.

    


         9.    Administration. The
Committee shall have the power to interpret this Agreement and to adopt such
rules for the administration, interpretation, and application of this Agreement
(including the Plan) as are consistent therewith and to interpret or revoke any
such rules. All actions taken and all interpretations and determinations made by
the Committee shall be final and binding upon the Awardee, the Company, and all
other interested persons. No member of the Committee shall be personally liable
for any action, determination, or interpretation made in good faith with respect
to the Plan or this Agreement.

    


         10.   Effect on Other Employee
Benefit Plans. The value of the Award shall not be included as
compensation, earnings, salaries, or other similar terms used when calculating
the Awardee’s benefits under any Awardee or other benefit plan sponsored by the
Company or any Affiliate except as such plan otherwise expressly provides. The
Company expressly reserves its rights to amend, modify, or terminate any of the
Company’s or any Affiliate’s employee benefit plans.

    


         11.   Effect on Service.
The receipt of the Award shall not give the Awardee any right to remain in the
service of the Company or any Affiliate. The Award is completely within the
discretion of the Company. It is not made as a part of any ongoing element of
compensation or something that the Awardee should expect to receive annually or
on any other periodic basis. It does not constitute part of the Awardee’s
compensation for purposes of determining any post-employment payment or
severance.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

         12.   Amendment. This
Agreement may be amended only by a writing executed by the Company and the
Awardee which specifically states that it is amending this Agreement.
Notwithstanding the foregoing, this Agreement may be amended solely by the
Committee by a writing which specifically states that it is amending this
Agreement, so long as a copy of such amendment is delivered to the Awardee, and
provided that no such amendment adversely affects the rights of the Awardee (but
limiting the foregoing, the Committee reserves the right to change, by written
notice to the Awardee, the provisions of the Award or this Agreement in any way
it may deem necessary or advisable to carry out the purpose of the grant as a
result of any change in applicable laws or regulations or any future law,
regulation, ruling, or judicial decision, provided that any such change shall be
applicable only to Awards which are then subject to restrictions as provided
herein).

    


         13.   Notices. Any notice
to be given under the terms of this Agreement to the Company shall be addressed
to the Secretary of the Company. Any notice to be given to the Awardee shall be
addressed to the Awardee at the address listed in the Company’s records. By a
notice given pursuant to this Section, either party may designate a different
address for notices. Any notice shall have been deemed given when actually
delivered.

    


         14.   Severability. If all
or any part of this Agreement (including the Plan) is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not invalidate any portion of this Agreement or the Plan not
declared to be unlawful or invalid. Any Section of this Agreement (or part of
such a Section) so declared to be unlawful or invalid shall, if possible, be
construed in a manner which will give effect to the terms of such Section or
part of a Section to the fullest extent possible while remaining lawful and
valid.

    


         15.   Construction. The
Award is being issued as if granted pursuant to the
Plan and are subject to the terms of the Plan, the terms of which are
incorporated herein by reference. A copy of the Plan has been given to the
Awardee, and additional copies of the Plan are available upon request during
normal business hours at the principal executive offices of the Company. To the
extent that any provision of this Agreement violates or is inconsistent with an
express provision of the Plan, the Plan provision shall govern and any
inconsistent provision in this Agreement shall be of no force or
effect.

    


    16.    Miscellaneous.

    


              (a)    The
Board may terminate, amend, or modify the Plan; provided, however, that no such
termination, amendment, or modification of the Plan may in any way adversely
affect the Participant’s rights under this Agreement, without the Participant’s
written approval.

    


              (b)    This
Agreement shall be subject to all applicable laws, rules, and regulations, and
to such approvals by any governmental agencies or national securities exchanges
as may be required.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
 

             
(c)    All obligations of the Company under the Plan and
this Agreement, with respect to the Award, shall be binding on any successor to
the Company, whether the existence of such successor is the result of a direct
or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company.

    


              (d)    By
signing this Agreement, the Awardee acknowledges that his or her personal
employment information regarding participation in the Plan and information
necessary to determine and pay, if applicable, benefits under the Plan must be
shared with other entities, including companies related to the Company and
persons responsible for certain acts in the administration of the Plan. By
signing this Agreement the Awardee consents to such transmission of personal
data as the Company believes is appropriate to administer the Plan.

    


              (e)    To
the extent not preempted by federal law, this Agreement shall be governed by,
and construed in accordance with, the laws of the State of
California.

    


         IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement
effective as of the day and year first above written.

    
      
        
          
            
              
                
                  	
                           

                        	 	 
      	 
      	 
	
                          AWARDEE

                        	 	
                          NEXMED,
      INC.

                        	 
	 
      	 	 
      	 
      	 
	 
      	 	 
      	 
      	 
	  
      	 	
                          By:

                        	
                            
      

                        	 
	
                          Signature

                        	 	
                           

                        	
                          Name:

                        	 
	 
      	 	
                           

                        	
                          Title:

                        	 
	   
      	 	 
      	 
      	 
	
                          Print
      Name

                        	 	 
      	 
      	 


                

              

            

          

        

      

    

    


    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    


    


    
      
        
          
            	
                    Award
      No.

                  	
                     
      ______________

                  
	
                    Award
      Date:

                  	
                     
      ______________

                  
	
                    No.
      Shares:

                  	
                     
      ______________

                  


          

        

      

    

     

    DEFERRAL
ELECTION

     

    The
following constitutes an election to defer payment of vested benefits pursuant
to the Award referred to above granted to the undersigned on [___________],
20___.

     

    
      	
               
      

            	
              1.

            	
              Election: The
      undersigned hereby elects to receive the distribution of Shares as follows
      (please select one of the three distribution choices
    below):

            


    

     

    
      	
               
      

            	
              o

            	
              In
      one lump sum upon a “separation from service” (as defined in the final
      regulation promulgated under Section 409A of the Internal Revenue Code of
      1986, as amended (the “Regulation”))(such event being, a “Separation from
      Service”); or

            


    

     

    
      	
               
      

            	
              o

            	
              In
      one lump sum on ____________ ; or

            


    

     

    
      	
               
      

            	
              o

            	
              In
      _________ equal annual installments, starting on
    ____________.

            


    

     

    In the
event of death, Disability (as defined in the Regulation) or a Change in Control
(as defined in the Regulation), distribution of vested portions of the Award
shall be made immediately in one lump sum.  I understand that if I am
considered a “specified employee” (as defined in the Regulation) and
distribution is made on account of a Separation from Service, distribution shall
not be made until six months and a day after my Separation from Service, or
death, if earlier.

     

    
      	
               
      

            	
              2.

            	
              Change of
      Election: I hereby acknowledge that I may not change the date of
      the distribution as elected above unless I do so at least twelve months
      prior to the date the first distribution is due under the election above
      and at least twelve months prior to the date my new election is scheduled
      to take effect. I also acknowledge that if I change my distribution date
      elected above, the first date I may receive any distribution with respect
      to Shares covered by this election is not earlier than five years after
      the date payment would otherwise have been made pursuant to the election
      above. Such change must be timely filed in writing with the Company’s
      stock option administrator. The Company shall have sole discretion to
      revise the terms of this election or any change, or the procedures with
      respect to making this election or any change, to the extent the Company
      deems it helpful or appropriate to comply with applicable
    law.

            


    

     

     

    
      
        
          
            
              
                
                  
                    
                      	 	 	 	 
	
                              Awardee
      Signature

                            	 	
                              Date

                            	 
	 	 	 	 
	 	 	 	 
	
                              Print
      Name

                            	 	 
      	 


                    

                  

                

              

            

          

        

      

    

     

     

     

    
      
        
        

      

      
        5