Document:

Exhibit 10.3

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive
Employment Agreement (this “Agreement”) is made and entered into as of September 27, 2021 by and
between Journey Medical Corporation (the “Company”) and
Ernest De Paolantonio (“Executive”). The Company and Executive are hereinafter collectively referred to as the
 “Parties”, and individually referred to as a “Party”.

 

Recitals

 

WHEREAS the Company desires
to employ Executive and Executive desires to accept employment, on the terms and conditions set forth in this Agreement;

 

WHEREAS, in his position,
Executive will have access to confidential information concerning the Company’s business, its customers and employees; and

 

WHEREAS, the Company wishes
to protect itself from unauthorized use of this information and to protect its investment in its employees, customer relationships and
confidential information.

 

NOW, THEREFORE, in consideration
of the foregoing, the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows:

 

Agreement

 

		1.	Employment.

 

1.1              Term.
This Agreement will take effect on October 1, 2021 (the “Effective Date”) and will continue in effect until
it is terminated pursuant to Section 4 herein.

 

1.2            Title.
Effective as of the Effective Date, Executive is employed by the Company in the position of Chief Financial Officer. Executive will
report to the Company’s Chief Executive Officer.

 

1.3              Duties.
Executive will do and perform all services, acts or things necessary or advisable to conduct the business of the Company and that
are normally associated with the position of Chief Financial Officer. Executive’s duties will also include such other duties as
the Company may direct from time to time. Executive will devote his full business time, attention, knowledge and skills to the affairs
of the Company and to his duties hereunder and will perform such duties diligently and to the best of his ability, in compliance with
the Company’s policies and procedures and the laws and regulations that apply to the Company’s business.

 

1.4              Location. Unless the Parties otherwise agree in writing, Executive will work remotely. Notwithstanding the foregoing, Executive
understands and agrees that the Company may from time to time require Executive to travel temporarily to other locations in connection
with the Company’s business, including but not limited to the Company’s headquarters in Scottsdale, Arizona.

 

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		2.	Restrictive Covenants.

 

2.1                Agreements
Protecting Confidential and Proprietary Information. In connection with and as a material condition of the Company’s employment
of Executive, Executive understands, acknowledges and agrees to promptly execute and be bound by certain restrictive covenants during
and after his employment with the Company, as contained in the Company’s Proprietary Information and Inventions Agreement (“PIIA”).
A copy of the PIIA is attached to this Agreement as Exhibit A. Executive acknowledges and agrees that his services to the Company
pursuant to this Agreement are unique and extraordinary and that in the course of performing such services Executive will have access
to and knowledge of significant confidential, proprietary, and trade secret information belonging to the Company. Executive agrees that
the provisions and restrictions set forth in the PIIA are reasonable and necessary to protect the Company’s legitimate business
interests in its goodwill, its confidential, proprietary, and trade secret information, and its investment in the unique and extraordinary
services to be provided by Executive pursuant to this Agreement.

 

2.2               
Non-Competition and Non-Solicitation.

 

2.2.1       
Purpose. Executive understands and agrees that the purpose of this Section 2.2 is to protect the Company’s legitimate
business interests, including, but not limited to its confidential and proprietary information, customer relationships and goodwill, and
the Company’s competitive advantage, and will not unreasonably impair Executive’s ability or right to work or earn a living.
Therefore, Executive agrees to be subject to restrictive covenants under the following terms.

 

2.2.2       
Definitions. As used in this Agreement, the following terms have the meanings given to such terms below.

 

(i)           “Business”
means the business(es) in which the Company is or was engaged at the time of, or during the 12-month period prior to, the termination
of Executive’s employment with the Company for any reason.

 

(ii)         “Customer”
means any person or entity who is or was a customer or client of the Company at the time of, or during the 12-month period prior to,
the termination of Executive’s employment with the Company for any reason.

 

(iii)        “Company Employee” means any person who is or was an employee of the Company at the time of, or during the
12-month period prior to, the termination of Executive’s employment with the Company for any reason.

 

(iv)         “Restricted
Period” means the period commencing on the date of termination of Executive’s employment with the Company for any reason
and ending 12 months after such date; provided, however, that the period will be tolled and will not run during any time Executive is
in violation of this Section 2.2, it being the intent of the parties that the Restricted Period will be extended for any period of time
in which Executive is in violation of this Section 2.2.

 

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(v)           “Territory”
means the United States of America, it being understood that the Company’s business is nationwide in scope and a nationwide restriction
is reasonable and necessary to protect the Company’s interests.

 

2.2.3       Non-Participation
with the Company’s Competitors. During his employment with the Company, Executive will not, on his own behalf or on behalf
of any other person, engage in any business competitive with or adverse to that of the Company. In addition, during his employment with
the Company, Executive will not acquire, assume or participate in, directly or indirectly, any position, investment or interest known
by Executive to be adverse or antagonistic to the Company, its business, or prospects, financial or otherwise, or in any company, person,
or entity that is, directly or indirectly, in competition with the business of the Company or any of its affiliates. Ownership by Executive,
in professionally managed funds over which the Executive does not have control or discretion in investment decisions, or as a passive
investment, of less than 2% of the outstanding shares of capital stock of any corporation with one or more classes of its capital stock
listed on a national securities exchange or publicly traded on a national securities exchange or in the over-the-counter market will
not constitute a breach of this Section 2.2.3.

 

2.2.4      Non-Competition.
During his employment with the Company and during the Restricted Period, Executive will not, directly or indirectly, (i) engage in
the Business in the Territory (other than on behalf of the Company), or (ii) hold a position based in or with responsibility for all
or part of the Territory, with any person or entity engaging in the Business, whether as an employee, consultant, or otherwise, in which
Executive will have duties, or will perform or be expected to perform services for such person or entity, that is or are the same as
or substantially similar to the position held by Executive or those duties or services actually performed by Executive for the Company
within the 12-month period immediately preceding the termination of Executive’s employment with the Company, or in which Executive
will use or disclose or be reasonably expected to use or disclose any confidential or proprietary information of the Company for the
purpose of providing, or attempting to provide, such person or entity with a competitive advantage with respect to the Business.

 

2.2.5       Non-Solicitation.
During his employment with the Company and during the Restricted Period, Executive will not, directly or indirectly, on Executive’s
own behalf or on behalf of any other party (except on behalf of the Company):

 

		(i)	Call upon, solicit, divert, encourage or attempt to call upon, solicit, divert, or encourage any Customer
for purposes of marketing, selling, or providing products or services to such Customer that are competitive with those offered by the
Company;

 

		(ii)	Accept as a customer any Customer for purposes of marketing, selling, or providing products or services
to such Customer that are competitive with those offered by the Company;

 

		(iii)	Induce, encourage, or attempt to induce or encourage any Customer to reduce, limit, or cancel its business
with the Company;

 

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		(iv)	Solicit, induce, or attempt to solicit or induce any Company Employee to terminate his or her employment
with the Company; or

 

		(v)	Otherwise interfere with or engage in any conduct that would have the effect of interfering with the business
relationship between the Company and any of its vendors, suppliers, consultants, or contractors.

 

2.2.6       
Reasonableness of Restrictions. Executive acknowledges and agrees that (i) his services to the Company under this Agreement
are unique and extraordinary; (ii) the restrictive covenants in this Agreement are essential elements of Executive’s employment
by the Company and are reasonable given Executive’s access to the Company’s confidential information and the substantial knowledge
and goodwill Executive will acquire with respect to the business of the Company as a result of his employment with the Company, and the
unique and extraordinary services to be provided by Executive to the Company; (iii) the restrictive covenants contained in this Agreement
are reasonable in time, territory, and scope, and in all other respects; and (iv) enforcement of the restrictions contained herein will
not deprive the Executive of the ability to earn a reasonable living.

 

2.2.7       
Judicial Modification. Should any part or provision of this Section 2.2 be held invalid, void, or unenforceable in any court
of competent jurisdiction, such invalidity, voidness, or unenforceability will not render invalid, void, or unenforceable any other part
or provision of this Agreement. The parties further agree that if any portion of this Section 2.2 is found to be invalid or unenforceable
by a court of competent jurisdiction because its duration, territory, or other restrictions are deemed to be invalid or unreasonable in
scope, the invalid or unreasonable terms will be replaced by terms that are valid and enforceable and that come closest to expressing
the intention of such invalid or unenforceable terms.

 

2.2.8       
Enforcement. Executive acknowledges and agrees that the Company will suffer irreparable harm in the event that Executive breaches
any of Executive’s obligations under this Section 2.2 and that monetary damages would be inadequate to compensate the Company for
such breach. Accordingly, Executive agrees that, in the event of a breach by Executive of any of Executive’s obligations under this
Section 2.2, the Company will be entitled to obtain from any court of competent jurisdiction preliminary and permanent injunctive relief,
in order to prevent or to restrain any such breach. Executive agrees to waive any requirement for the securing or posting of any bond
in connection with such remedies. The Company will be entitled to recover its costs incurred in connection with enforcing this Section
2.2, including reasonable attorneys’ fees and expenses.

 

		3.	Compensation
                                            of Executive.

 

3.1                  Base
Salary. The Company will pay Executive a base salary at the annualized rate of Three Hundred Thousand
Dollars ($300,000.00) (the “Base Salary”), to be paid in equal installments in accordance with the
Company’s normal payroll practices. The Base Salary will be prorated for any partial year of employment on the basis of a
365-day fiscal year and may be increased in the discretion of the Company. The Base Salary may only be decreased in connection with
a Company-wide decrease in compensation to similarly-situated executive employees of the Company; provided, however that Executive
will not be subject to any greater percentage reduction than any other similarly-situated Company executive.

 

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3.2                   
Sign on Bonus. Executive will receive a $50,000 sign on bonus, payable in two equal installments, as follows: (i) $25,000 will
be payable on the first payroll processing date following the three-month anniversary of Executive’s start date (the “First
Installment Date”); and (ii) $25,000 will be payable on the first payroll processing date following the six-month anniversary
of the Executive’s start date (the “Second Installment Date”). Executive must remain employed by the Company
through each applicable payment date in order to earn and receive the corresponding bonus payment. If Executive is not employed by the
Company through the First Installment Date, no pro rata sign on bonus will be payable or received. If Executive is employed by
the Company through the First Installment Date but not through the Second Installment Date, no pro rata portion of the second installment
of the sign on bonus will be payable or received. If Executive’s employment with the Company ends, except by reason of a termination
by the Company without Cause (as defined below) or Executive’s resignation for Good Reason (as defined below), at any time prior
to the one-year anniversary of Executive’s start date, then Executive will be required to repay to the Company a prorated portion
of the sign on bonus (determined based on the number of months completed since the Effective Date) within 15 days following the end of
Executive’s employment.

 

3.3                   
Annual Bonus Compensation. Executive will be eligible to receive an annual bonus targeted at 30% of his Base Salary based upon
the Company’s performance and his individual performance on behalf of the Company during the preceding calendar year. Whether to
award a bonus for any calendar year, and if so, in what amount, will be determined by the Company in its discretion. Executive must remain
employed by the Company through the bonus payment date in order to earn or receive any discretionary annual bonus. No pro rata bonus
will be earned or payable for partial years of employment.

 

3.4                     
Equity Grant. Subject to approval by the Company’s Board of Directors (the “Board”), Executive
will be granted an equity grant of 120,000 shares of the Company’s common stock (the “Equity Grant”) in
the form of restricted stock, restricted stock units, or options as determined by the Board. One third of the equity award will vest on
each of the first, second, and third anniversaries of the grant date subject to Executive’s continuing employment and eligibility
on each vesting date. The Equity Grant will be governed by the terms of the Company’s 2014 Stock Plan, as amended from time to time,
and a related equity grant agreement to be entered between Executive and the Company. Executive will also be eligible to receive additional
equity awards as determined by the Board in its discretion, based upon the Company’s performance and his individual performance
on behalf of the Company, and such other factors as the Board may determine.

 

3.5                  
Expense Reimbursements. The Company will reimburse Executive for all reasonable business expenses incurred by Executive in
connection with the performance of his duties hereunder, subject to the Company’s reimbursement policies in effect from time to
time.

 

3.6                   Benefits.
Executive will be entitled to such other benefits, and to participate in such benefit plans, as are generally made available to
similarly situated senior executive employees of the Company from time to time, subject to Company policy and the terms and
conditions of any applicable benefit plans. Nothing in this Agreement will be deemed to alter the Company’s rights to modify
or terminate any such plans or programs in its sole discretion.

 

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3.7                   
Holidays and Vacation. Executive will be eligible to accrue up to four weeks of paid vacation per year and will receive paid
Company holidays in accordance with Company policy. All available time off must be used in accord with the Company’s policies and
procedures. To the extent Executive would be entitled to a greater number of vacation days under any other Company policy, such other
policy will govern.

 

3.8                   
Withholdings. The Company may withhold from any amounts payable under this Agreement such federal, state and local taxes as
the Company determines are required to be withheld pursuant to any applicable law or other amount properly requested by Executive.

 

		4.	Termination.

 

4.1                   Termination
by the Company. Executive’s employment with the Company is at will and may be terminated by the Company at any time and for
any reason, or for no reason, including, but not limited to, under the following conditions:

 

4.1.1       
Termination by the Company for Cause. The Company may terminate Executive’s employment for “Cause” (as defined
below) by delivery of written notice to Executive in accordance with the definition and procedures set forth in Section 4.6.2 below. Any
notice of termination given pursuant to this Section 4.1.1 will effect termination as of the date of the notice or as of such other date
as specified in the notice, subject to Section 4.6.2.

 

4.1.2       
Termination by the Company without Cause. The Company may terminate Executive’s employment without Cause at any time
and for any reason or for no reason. Such termination will be effective on the date Executive is so informed or as otherwise specified
by the Company.

 

4.2                   Termination
by Resignation of Executive. Executive’s employment with the Company is at will and may be terminated by Executive at any time
and for any reason or for no reason, including via a resignation for Good Reason in accordance with the Good Reason Process set forth
in Section 4.6.3 below.

 

4.3                   Termination
for Death or Complete Disability. Executive’s employment with the Company will terminate effective upon the date of Executive’s
death or upon notice by the Company as a result of Executive’s Complete Disability (as defined below); provided, however, nothing
herein will give the Company the right to terminate Executive prior to discharging its obligations to Executive, if any, under the Family
and Medical Leave Act, the Americans with Disabilities Act, or any other applicable law.

 

4.4                   Termination
by Mutual Agreement of the Parties. Executive’s employment with the Company may be terminated at any time upon a mutual agreement
in writing of the Parties. Any such termination of employment will have the consequences specified in such agreement.

 

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4.5                   
Compensation Upon Termination. 

 

4.5.1       
 Generally. When Executive’s employment is terminated for any reason, Executive, or his estate, as the case may be, will
be entitled to receive the compensation and benefits earned through the effective date of termination, including, but not limited to,
as applicable, any Base Salary earned by Executive through the date of termination, expenses subject to reimbursement pursuant to Company
policy incurred by Executive through the date of termination, and accrued and unused vacation benefits earned through the date of termination
at the rate in effect at the time of termination.

 

4.5.2       
Termination Without Cause or Resignation For Good Reason. If the Company terminates Executive’s employment without Cause
or if Executive resigns for Good Reason, then, in addition to the amounts described in Section 4.5.1, and conditioned upon Executive executing
and not revoking a release of claims in a form acceptable to the Company (the “Release”) within the time periods
specified therein, the Company will provide Executive with the following separation benefits (together, the “Separation Benefits”):
(i) the Company will pay Executive severance in an amount equal to six months of Executive’s Base Salary (at the rate in effect
as of the termination); and (ii) if Executive timely elects continued health insurance coverage under COBRA, the Company will pay the
entire premium necessary to continue such coverage for Executive and Executive’s eligible dependents for a period of six months
or, if earlier, when Executive becomes eligible for group health insurance coverage under another employer’s plan, provided, however,
that the Company will have the right to terminate such payment of COBRA premiums on behalf of Executive and instead pay Executive a lump
sum amount equal to the COBRA premium times the number of months remaining in the specified period if the Company determines in its discretion
that continued payment of the COBRA premiums is or may be discriminatory under Section 105(h) of the Internal Revenue Code. The severance
payments under clause (i) above will be payable to Executive over time in accordance with the Company’s payroll practices and procedures
beginning on the 60th day following the termination of Executive’s employment with the Company, provided that the first installment
will include all installments that would have been paid if the payments had commenced immediately following the date of termination. Notwithstanding
the foregoing, if Executive is entitled to receive the Separation Benefits but violates any provisions of Section 2 hereof or the PIIA,
the Company will be entitled to immediately stop paying any further installments of the Separation Benefits, in addition to any other
remedies that may be available to the Company in law or at equity.

 

4.5.3       
No Further Obligations. Except as expressly provided above or as otherwise required by law, the Company will have no obligations
to Executive in the event of the termination of this Agreement for any reason.

 

4.6                   
Definitions. For purposes of this Agreement, the following terms will have the following meanings:

 

4.6.1        Complete
Disability. As used herein, “Complete Disability” means the inability of Executive, due to the
condition of his physical, mental or emotional health, effectively to perform the essential functions of his job with or without
reasonable accommodation for a continuous period of more than 90 days or for 90 days in any period of 180 consecutive days. In the
event that a question should arise as to whether a Complete Disability exists, then for purposes of making such a determination, at
the Company’s request Executive agrees to make himself available and to cooperate in a reasonable examination by a licensed
independent physician retained by the Company and to authorize the disclosure and release to the Company of all medical records
related to such examination.

 

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4.6.2       
Cause. As used herein, “Cause” means: (i) Executive’s fraud, embezzlement or misappropriation
with respect to the Company; (ii) Executive’s material breach of this Agreement; (iii) Executive’s material breach of the
PIIA; (iv) Executive’s breach of fiduciary duties to the Company; (v) Executive’s willful failure or refusal to perform his
material duties under this Agreement or failure to follow any specific lawful instructions of the Company’s Chief Executive Officer;
(vi) Executive’s conviction or plea of nolo contendere in respect of a felony or of a misdemeanor involving moral turpitude; (vii)
Executive’s willful or negligent act or omission that has or may reasonably be expected to have a material adverse effect on the
property, business, or reputation of the Company; (viii) Executive’s material failure to comply with the Company’s workplace
rules, policies, or procedures; or (ix) Executive’s failure to cooperate with a bona fide internal investigation or an investigation
by regulatory or law enforcement authorities, after being instructed by the Company to cooperate, or the willful destruction or failure
to preserve documents or other materials known to be relevant to such investigation or the inducement of others to fail to cooperate or
to produce documents or other materials in connection with such investigation. In the event that the Company concludes that Executive
has engaged in acts constituting in Cause as defined in clause (ii) or (v) above, prior to terminating this Agreement for Cause the Company
will provide Executive with at least 10 days’ notice of the circumstances constituting such Cause and an opportunity to correct
such circumstances, to the extent such circumstances are susceptible of being corrected.

 

4.6.3       
Good Reason. Executive may resign for Good Reason by complying with the Good Reason Process. As used in this Agreement, “Good
Reason Process” means that (i) Executive reasonably determines in good faith that a “Good Reason” condition
has occurred; (ii) Executive notifies the Company in writing of the first occurrence of the Good Reason condition within 30 days of the
first occurrence of such condition; (iii) Executive cooperates in good faith with the Company’s efforts, for a period of 30 days
following such notice (the “Good Reason Cure Period”), to remedy the condition; (iv) notwithstanding such efforts,
the Good Reason condition continues to exist; and (v) Executive terminates Executive’s employment within 30 days after the end of
the Good Reason Cure Period. If the Company cures the Good Reason condition during the Good Reason Cure Period, Good Reason shall be deemed
not to have occurred with respect to the particular circumstances claimed to have constituted Good Reason. For purposes of this Agreement,
 “Good Reason” means the occurrence of any of the following events without Executive’s consent: (x) a material
reduction of Executive’s Base Salary, except in connection with a Company-wide decrease in executive compensation as provided in
Section 3.1 of this Agreement, (y) a material diminution of Executive’s authority, duties, or responsibilities, or (z) the Company’s
material breach of this Agreement.

 

4.7                   
Survival of Certain Sections. Sections 2, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 16, and 17 of this Agreement will survive the
termination of this Agreement.

 

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4.8                    Section
409A Compliance. The Parties intend that all provisions of this Agreement and the payments made pursuant thereto will comply
with, or be exempt from, the application of Section 409A of the Internal Revenue Code of 1986 as amended and the regulations and
other guidance thereunder and any state law of similar effect (collectively “Section 409A”), and all
provisions of this Agreement will be construed, to the maximum extent possible, in a manner consistent with the requirements for
avoiding taxes or penalties under Section 409A. Notwithstanding anything to the contrary set forth herein, any payments and benefits
provided under this Section 4 that constitute “deferred compensation” within the meaning of Section 409A will not
commence in connection with Executive’s termination of employment unless and until Executive has also incurred a
 “separation from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h)), unless the Company
reasonably determines that such amounts may be provided to Executive without causing Executive to incur the additional 20% tax
pursuant to Section 409A. The parties intend that each installment of any series of payments provided for in this Agreement is a
separate “payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i). For the avoidance of doubt, the
parties intend that payments of the Separation Benefits set forth in this Agreement satisfy, to the greatest extent possible, the
exemptions from the application of Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4) and 1.409A-1(b)(9). If
the Company determines that the Separation Benefits constitute “deferred compensation” under Section 409A and Executive
is, on the termination of service, a “specified employee” of the Company or any successor entity thereto, as such term
is defined in Section 409A, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences
under Section 409A, the timing of the Separation Benefits payments will be delayed until the earlier to occur of: (i) the date that
is six months and one day after Executive’s separation from service, or (ii) the date of Executive’s death (such
applicable date, the “Specified Employee Initial Payment Date”), and the Company (or the successor entity
thereto, as applicable) will (A) pay to Executive a lump sum amount equal to the sum of the Separation Benefits payments that
Executive would otherwise have received through the Specified Employee Initial Payment Date if the commencement of the payment of
the Separation Benefits had not been so delayed pursuant to this Section and (B) commence paying the balance of the Separation
Benefits in accordance with the applicable payment schedules set forth in this Agreement.

 

		5.	Assignment
                                            and Binding Effect.

 

This Agreement will be binding
upon and inure to the benefit of Executive and Executive’s heirs, executors, personal representatives, assigns, administrators and
legal representatives. Because of the unique and personal nature of Executive’s duties under this Agreement, neither this Agreement
nor any rights or obligations under this Agreement will be assignable by Executive. This Agreement will be binding upon and inure to the
benefit of the Company and its successors, assigns and legal representatives. Any such successor of the Company will be deemed substituted
for the Company under the terms of this Agreement for all purposes. For this purpose, “successor” means any person, firm,
corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all
or substantially all of the assets or business of the Company.

 

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		6.	Notices.

 

Any notice required or
permitted to be given pursuant to this Agreement must be in writing and will be deemed effectively given to the other party (i) on
the date it is actually delivered by personal delivery of such notice in person, (ii) one business day after its deposit in the
custody of a reputable overnight courier service (such as FedEx) next business day delivery charges prepaid; or (iii) three business
days after its deposit in the custody of the U.S. mail, certified or registered postage prepaid, return receipt requested; in each
case to the appropriate address shown below (or to such other address as a party may designate by notice to the other party):

 

If to the Company:

 

Journey Medical Corporation

9237 E. Via de Ventura Blvd, Suite 105

Scottsdale, AZ 85258

Attn: Chief Executive Officer

 

If to Executive:

 

Ernest De Paolantonio

4733 Kensington Circle

Naples, FL 34119

 

		7.	Choice
                                            of Law.

 

This Agreement will be construed
and interpreted in accordance with the internal laws of the State of Delaware without regard to its conflict of laws principles.

 

		8.	Integration.

 

This Agreement, including the
PIIA and all other documents referenced herein, contains the complete, final and exclusive agreement of the Parties relating to the terms
and conditions of Executive’s employment and the termination of Executive’s employment, and supersedes all prior and contemporaneous
oral and written employment agreements or arrangements between the Parties.

 

		9.	Amendment.

 

This Agreement cannot be amended
or modified except by a written agreement signed by Executive and the Company.

 

		10.	Waiver.

 

No term, covenant or condition
of this Agreement or any breach thereof will be deemed waived, except with the written consent of the Party against whom the wavier is
claimed, and any waiver or any such term, covenant, condition or breach will not be deemed to be a waiver of any preceding or succeeding
breach of the same or any other term, covenant, condition or breach.

 

		11.	Severability.

 

The finding by a court of
competent jurisdiction of the unenforceability, invalidity or illegality of any provision of this Agreement will not render any
other provision of this Agreement unenforceable, invalid or illegal. Such court will have the authority to modify or replace the
invalid or unenforceable term or provision with a valid and enforceable term or provision, which most accurately represents the
Parties’ intention with respect to the invalid or unenforceable term, or provision.

 

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		12.	Interpretation;
                                            Construction.

 

The headings set forth in this
Agreement are for convenience of reference only and will not be used in interpreting this Agreement. This Agreement has been drafted by
legal counsel representing the Company, but Executive has been encouraged to consult with, and has consulted with, Executive’s own
independent counsel and tax advisors with respect to the terms of this Agreement. The Parties acknowledge that each Party and its counsel
has reviewed and revised, or had an opportunity to review and revise, this Agreement, and any rule of construction to the effect that
any ambiguities are to be resolved against the drafting party will not be employed in the interpretation of this Agreement.

 

		13.	Attorneys
                                            Fees.

 

Except as otherwise prohibited
by law, in the event a Party brings an action to enforce the terms of this Agreement, in addition to any other remedies, the prevailing
party will be entitled to recovery of its reasonable attorneys’ fees and costs incurred by it arising out of such breach or the
defense thereof.

 

		14.	Representations
                                            and Warranties.

 

14.1               
Obligations to Prior Employers. Executive represents and warrants to the Company that Executive is not obligated or restricted
under any agreement (including any non-competition or confidentiality agreement), judgment, decree, order or other restraint of any kind
that could impair Executive’s ability to perform the duties and obligations required of Executive hereunder. Executive further represents
and warrants to the Company that he has not violated any confidentiality agreement or other similar obligation that he has to any former
employer and that he has not disclosed any confidential or trade secret information belonging to any former employer to the Company or
its agents. Executive agrees that he will not use confidential information and/or trade secrets belonging to any former employer in his
employment with the Company or otherwise as a resource for building the business of the Company and will structure his and the Company’s
work environment and practices in such a way to ensure that any such information will not be used or disclosed during the course of his
relationship with the Company.

 

14.2                Litigation
Support. Both during and after Executive’s employment with the Company, if the Company is evaluating, pursuing, contesting
or defending any proceeding, charge, complaint, claim, demand, notice, action, suit, litigation, hearing, audit, investigation,
arbitration or mediation, in each case whether initiated by or against the Company (collectively, a
 “Proceeding”), other than a Proceeding initiated by or against Executive, Executive will reasonably
cooperate with the Company and its counsel in the evaluation, pursuit, contest or defense of the Proceeding and provide such
testimony and access to books and records as may be necessary in connection therewith. Any such cooperation will be done at times
mutually convenient for Executive and the Company, and the Company will undertake reasonable efforts to minimize the interference
such cooperation may cause to any duties or obligations that Executive may have to a third party, including any future employer. The
Company will reimburse Executive for Executive’s reasonable out-of-pocket expenses related to such cooperation.

 

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14.3               
Future Employment. In the event of Executive’s separation from the Company, regardless of the reason or cause of that
separation, Executive agrees that for a period of 12 months from the date his employment terminates, he will provide the Company with
no fewer than three business days’ notice of his intent to accept employment with or for an organization other than Company for
the express purpose of allowing the Company to determine if such proposed employment interferes with any of Executive’s surviving
obligations under this Agreement. The notice of intent to accept employment will identify the new employer, list Executive’s anticipated
title and describe his anticipated duties.

 

		15.	Counterparts.

 

This Agreement may be executed
in two counterparts, each of which will be deemed an original, all of which together will contribute one and the same instrument. Signatures
to this Agreement transmitted by fax, by email in “portable document format” (“.pdf”) or by any other electronic
means intended to preserve the original graphic and pictorial appearance of this Agreement will have the same effect as physical delivery
of the paper document bearing original signature.

 

		16.	Jurisdiction;
                                            Venue.

 

The Parties agree that any litigation
arising out of or related to this Agreement or Executive’s employment by the Company will be brought exclusively in any state or
federal court in New York, New York. Each Party (i) consents to the personal jurisdiction of said courts, (ii) waives any venue or inconvenient
forum defense to any proceeding maintained in such courts, and (iii) except as otherwise provided in this Agreement, agrees not to bring
any proceeding arising out of or relating to this Agreement or Executive’s employment by the Company in any other court.

 

		17.	Advertising
                                            Waiver.

 

Executive agrees to permit the
Company, and persons or other organizations authorized by the Company, to use, publish and distribute advertising or sales promotional
literature concerning the products and/or services of the Company, or the machinery and equipment used in the provision thereof, in which
Executive’s name and/or pictures of Executive taken in the course of Executive’s provision of services to the Company appear.
Executive hereby waives and releases any claim or right Executive may otherwise have arising out of such use, publication or distribution.

 

[Signature Page Immediately Follows]

 

    12 

     

    

 

In
Witness Whereof, the Company has caused this Agreement to be signed by its duly authorized officer and Executive has hereunto
set his hand and seal.

 

Journey
Medical Corporation

 

	/s/ Claude Maraoui	 	9/27/2021
	CLAUDE MARAOUI	 	DATE
	PRESIDENT AND CEO	 	 

 

Executive:

 

	/s/ Ernest De Paolantonio	 	9/27/2021
	Ernest De Paolantonio	 	Date

 

    13 

     

    

 

EXHIBIT
A

 

Proprietary Information and Inventions Agreement

 

    14Exhibit 10.4

 

journey
medical corporation

NON-EMPLOYEE
DIRECTORS COMPENSATION PLAN

 

ARTICLE 1

PURPOSE

 

1.1. Purpose.
The purpose of the Journey Medical Corporation Non-Employee Directors Compensation Plan is to attract, retain and compensate highly-qualified
individuals who are not employees of Journey Medical Corporation for service as members of the Board by providing them with competitive
compensation and an opportunity to participate in the Company’s future growth through the granting of stock-based incentive awards.
The Company intends that the Plan will benefit the Company and its stockholders by allowing Non-Employee Directors to have a personal
financial stake in the Company through an ownership interest in the Stock and will closely associate the interests of Non-Employee Directors
with that of the Company’s stockholders.

 

1.2. ELIGIBILITY.
All Non-Employee Directors shall automatically be participants in the Plan.

 

ARTICLE 2

DEFINITIONS

 

2.1. DEFINITIONS.
Capitalized terms used herein and not otherwise defined shall have the meanings given such terms in the LTIP.  Unless
the context clearly indicates otherwise, the following terms shall have the following meanings:

 

	 	(a)	“Annual Equity Award” means stock options, stock awards, restricted stock, restricted stock units, stock appreciation rights, or other awards based on or derived from the Stock which are authorized under this Plan for award to Non-Employee Directors under Section 6.2 of the Plan.

 

	 	(b)	“Award” means any Initial Equity Award or Annual Equity Award granted to a Non-Employee Director under Article 6 of the Plan.

 

	 	(c)	“Basic Cash Retainer” means the annual cash retainer (excluding any Supplemental Cash Retainer, Meeting Fees and expenses) payable by the Company to a Non-Employee Director pursuant to Section 5.1 hereof for service as a director of the Company, as established from time to time by the Board and set forth in Schedule I hereto.

 

	 	(d)	“Company” means Journey Medical Corporation, a Delaware corporation.

 

	 	(e)	“Initial Equity Award” means stock options, stock awards, restricted stock, restricted stock units, stock appreciation rights, or other awards based on or derived from the Stock which are authorized under this Plan for award to Non-Employee Directors under Section 6.1 of the Plan.

 

	 	(f)	“LTIP” means the Journey Medical Corporation 2015 Stock Incentive Plan, as amended, or any subsequent equity compensation plan approved by the Board and designated as the LTIP for purposes of this Plan.

 

	 	(g)	“Meeting Fees” means fees for attending a meeting of the Board or one of its Committees as set forth in Section 5.3 hereof.

 

	 	(h)	“Non-Employee Director” means a director of the Company who is not an employee of the Company and who is not directly compensated by the Company under a separate Board-approved agreement with such director, or a related entity to such director, for service as a director during a Plan Year.

 

	 	(i)	“Plan” means this Journey Medical Corporation Non-Employee Directors Compensation Plan, as amended from time to time.

 

	 	(j)	
    “Plan Year(s)” means the approximate
    twelve-month periods between annual meetings of the stockholders of the Company.

    

 

	 	(k)	
    “Supplemental Cash Retainer”
    means the supplemental annual cash retainer (excluding Basic Cash Retainer, Meeting Fees and expenses) payable by the Company to a Non-Employee
    Director pursuant to Section 5.2 hereof for service as Chairman of the Board, Lead Director, or chair of a committee of the Board, as
    established from time to time by the Board and set forth in Schedule I hereto.

    

 

     

     

    

 

ARTICLE 3

ADMINISTRATION

 

3.1. ADMINISTRATION.
The Plan shall be administered by the Board, or, at the discretion of the Board from time to time, the Plan may be administered by
a committee of the Board. Subject to the provisions of the Plan, the Board shall be authorized to interpret the Plan, to establish, amend
and rescind any rules and regulations relating to the Plan, and to make all other determinations necessary or advisable for the administration
of the Plan. The Board’s interpretation of the Plan, and all actions taken and determinations made by the Board pursuant to the
powers vested in it hereunder, shall be conclusive and binding upon all parties concerned including the Company, its stockholders and
persons granted awards under the Plan. The Board may appoint a plan administrator to carry out the ministerial functions of the Plan,
but the administrator shall have no other authority or powers of the Board. To the extent the Board has delegated any authority and responsibility
under this Plan to a committee of the Board, such committee shall have the powers and protections of the Board hereunder, and any reference
herein to the Board (other than in this Section 3.1) shall include such committee. To the extent any action of the Board under the Plan
conflicts with actions taken by such committee, the actions of the Board shall control.

 

3.2. RELIANCE. In administering
the Plan, the Board may rely upon any information furnished by the Company, its public accountants and other experts. No individual will
have personal liability by reason of anything done or omitted to be done by the Company or the Board in connection with the Plan.

 

3.3. INDEMNIFICATION.
Each person who is or has been a member of the Board or who otherwise participates in the administration or operation of the Plan shall
be indemnified by the Company against, and held harmless from, any loss, cost, liability or expense that may be imposed upon or incurred
by him or her in connection with or resulting from any claim, action, suit or proceeding in which such person may be involved by reason
of any action taken or failure to act under the Plan and shall be fully reimbursed by the Company for any and all amounts paid by such
person in satisfaction of judgment against him or her in any such action, suit or proceeding, provided he or she will give the Company
an opportunity, by written notice to the Board, to defend the same at the Company’s own expense before he or she undertakes to defend
it on his or her own behalf. This right of indemnification shall not be exclusive of any other rights of indemnification.

 

ARTICLE 4

SHARES

 

4.1. SOURCE OF SHARES FOR
THE PLAN. The Awards and shares of Stock that may be issued pursuant to the Plan shall be issued under the LTIP, subject to
all of the terms and conditions of the LTIP, including but not limited to Section 5.1 of the LTIP, which provides that the maximum aggregate
number of Shares associated with any Award granted under this Plan in any calendar year to any one Non-Employee Director shall be determined
by the Company. The terms contained in the LTIP are incorporated into and made a part of this Plan with respect to Awards granted pursuant
hereto, and any such Awards shall be governed by and construed in accordance with the LTIP. In the event of any actual or alleged conflict
between the provisions of the LTIP and the provisions of this Plan, the provisions of the LTIP shall be controlling and determinative.
The Plan is considered to be and shall be operated as a subplan of the LTIP, and does not constitute a separate source of shares for the
grant of the Awards provided herein.

 

ARTICLE 5

CASH COMPENSATION

 

5.1. BASIC CASH RETAINER.
 For each Plan Year commencing with 2021, each Non-Employee Director shall be paid a Basic Cash Retainer for service as a director
during each Plan Year, payable in advance, on the first business day following each annual meeting of stockholders. The amount of the
Basic Cash Retainer shall be established from time to time by the Board. The amount of the Basic Cash Retainer is set forth in Schedule
I, as amended from time to time by the Board. Each person who first becomes a Non-Employee Director on a date other than an annual
meeting date shall be paid a pro rata amount of the Basic Cash Retainer for that Plan Year to reflect the actual number of days served
in the Plan Year.

 

5.2. SUPPLEMENTAL
CASH RETAINER.  The Chairman of the Board, Lead Director, and chairs of each committee of the Board may be paid a
Supplemental Cash Retainer during a Plan Year, payable at the same times as installments of the Basic Cash Retainer are paid. The
amount of the Supplemental Cash Retainers shall be established from time to time by the Board, and shall be set forth in Schedule
I, as amended from time to time by the Board. A pro rata Supplemental Cash Retainer will be paid to any Non-Employee Director
who is elected by the Board to a position eligible for a Supplemental Cash Retainer on a date other than the beginning of a Plan
Year, to reflect the actual number of days served in such eligible capacity during the Plan Year.

 

     

     

    

 

5.3. MEETING FEES. 
Each Non-Employee Director may be paid a fee for each meeting of the Board or committee thereof in which he or she participates.
The amount of the fees, if any, shall be established from time to time by the Board and shall be set forth in Schedule I, as amended
from time to time by the Board. For purposes of this provision, casual or unscheduled conferences among directors shall not constitute
an official meeting.

 

5.4. EXPENSE REIMBURSEMENT.
All Non-Employee Directors shall be reimbursed for reasonable travel and out-of-pocket expenses in connection with attendance at meetings
of the Board and its committees, or other Company functions at which the Chief Executive Officer, Chairman of the Board, or Lead Director
requests the director to participate.

 

ARTICLE 6

EQUITY AWARDS

 

6.1 INITIAL EQUITY AWARD.
Subject to share availability under the LTIP, each Non-Employee Director serving as such on July 1, 2021, and each Non-Employee Director
thereafter elected or appointed to the Board, shall be granted an Initial Equity Award. The Initial Equity Award is set forth in Schedule
I, as amended from time to time by the Board. Such Initial Equity Award shall be subject to the terms and restrictions described in
Schedule I and below in this Article 6.

 

6.2 ANNUAL EQUITY AWARD.
Subject to share availability under the LTIP, on the day following each annual meeting of the Company’s stockholders, each Non-Employee
Director serving as such on that date (other than a director who first became a Non-Employee Director at the stockholders meeting held
on the previous day) shall be granted an Annual Equity Award. The Annual Equity Award is set forth in Schedule I, as amended from
time to time by the Board. Such Annual Equity Award shall be subject to the terms and restrictions described in Schedule I and
below in this Article 6.

 

6.3 TERMS AND CONDITIONS
OF AWARDS. Awards granted under this Article 6 shall be subject to the terms and conditions described below and in the LTIP.

 

	 	(a)	Vesting. Each Award granted under this Plan shall vest as provided in Schedule 1, as amended from time to time by the Board; provided, however, that each Award shall become fully vested upon the occurrence of a Change of Control.

 

	 	(b)	Effect of Termination of Directorship. Upon termination of a Non-Employee Director’s membership on the Board for any reason (including without limitation, by reason of death, Disability, retirement or failure to be re-nominated or re-elected as a director), the Non-Employee Director shall forfeit all of his or her right, title and interest in and to any unvested portion of the Initial Equity Award or Annual Equity Award, as the case may be.

 

	 	(c)	Award Certificates. All Awards shall be evidenced by a written Award Certificate between the Company and the Non-Employee Director, which shall include such provisions, not inconsistent with the Plan or the LTIP, as may be specified by the Board.

 

6.4 ADJUSTMENTS. The
adjustment provisions of the LTIP shall apply with respect to Awards granted pursuant to this Plan. Without limiting the foregoing, in
the event of a subdivision of the outstanding Stock (stock-split), a declaration of a dividend payable in shares of Stock, or a combination
or consolidation of the outstanding Stock into a lesser number of shares of Stock, the number of Awards to be granted to Non-Employee
Directors in accordance with Article 6 hereof shall be adjusted proportionately and the shares of Stock then subject to each Award shall
automatically be adjusted proportionately without any change in the aggregate purchase price therefore.

 

ARTICLE 7

Amendment,
Modification and Termination

 

7.1. AMENDMENT, MODIFICATION
AND TERMINATION. The Board may, at any time and from time to time, amend, modify or terminate the Plan without stockholder approval;
provided, however, that if an amendment to the Plan would, in the reasonable opinion of the Board, require stockholder approval under
applicable laws, policies or regulations or the applicable listing or other requirements of a securities exchange on which the Stock is
listed or traded, then such amendment shall be subject to stockholder approval; and provided further, that the Board may condition any
other amendment or modification on the approval of stockholders of the Company for any reason.

 

     

     

    

 

ARTICLE 8

General
Provisions

 

8.1. EXPENSES OF THE PLAN.
The expenses of administering the Plan shall be borne by the Company.

 

8.2. EFFECTIVE DATE AND
DURATION OF THE PLAN. The Plan shall be effective as of the effective date it is approved by the Board. The Plan shall remain in effect
until terminated by the Board.

 

	 	Journey
    Medical Corporation
	 	 
	 	By:	       
	 	 	Claude Maraoui
	 	 	Chief Executive Officer

 

     

     

    

 

SCHEDULE I

 

Effective as of July 1, 2021

 

The following shall remain in effect until changed
by the Board:

 

	Basic Cash Retainer:	
    $50,000 paid quarterly in advance ($12,500 per
    quarter).

     

	
    Supplemental Cash 

    Retainer for Audit Chair:
	
     

    $10,000 paid quarterly in advance ($2,500 per
    quarter).

    

 

	Initial Equity Award:	
    30,000 of any of the following equity securities,
    as selected in advance of the Grant Date at the discretion of the Non-Employee Director: (i) Restricted Stock; (ii) Restricted Stock Units;
    or (iii) Options, which equity securities shall vest and become non-forfeitable in equal annual installments on the first anniversary
    of the Grant Date, on the second (2nd) anniversary of the Grant Date, and on the third (3rd) anniversary of the Grant date,
    subject to the Non-Employee Director’s continued service on the Board on each such date.

     

	Annual Equity Award:	
    7,500 shares of Restricted Stock, Restricted Stock
    Units or Options (as selected in advance of the Grant Date at the discretion of the Non-Employee Director), which equity securities shall
    vest and become non-forfeitable in full on the first (1st) anniversary of the Grant Date, subject to the Non-Employee Director’s
    continued service on the Board on such date.

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