Document:

ex_10-1.htm

EXHIBIT 10.1

 

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 Dennis McGrath (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, PhotoMedex 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 President and Chief Financial Officer 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 President and Chief Financial Officer of the Company with duties, responsibilities and authority commensurate therewith and shall report to the Chief Executive Officer (the “CEO”) and the Board of Directors of the Company (the “Board”).  The Executive shall perform all duties and accept all responsibilities incident to such position as may be reasonably assigned to him by the CEO and Board, consistent with his position as the President and Chief Financial Officer.

 

(2) The Executive represents to the Company that he is not subject to or a party to any employment agreement, non-competition covenant, understanding or restriction which would be breached by or prohibit the Executive from executing this Agreement and

 

  

  

  

performing fully his duties and responsibilities hereunder.

 

(c) Best Efforts.  During the Term, the Executive shall devote his best efforts and full time and attention to promote the business and affairs of the Company and its affiliated entities, and shall be engaged in other business activities only to the extent that such activities do not materially interfere or conflict with his obligations to the Company hereunder.  In no event shall the Executive’s other business activities violate his obligations under Section 12 below.  The foregoing also shall not be construed as preventing the Executive from (1) serving on civic, educational, philanthropic or charitable boards or committees, or, with the prior written consent of the Board, in its sole discretion, on corporate boards, and (2) managing personal investments, so long as such activities are permitted under the Company’s Code of Conduct and employment policies.  The Executive acknowledges and agrees that Schedule A represents a complete list of all corporate boards on which the Executive serves as of the Effective Date.  Notwithstanding any provision of this Section 1 of the Agreement to the contrary, in no event shall the Executive invest in any business competitive with the Company or that would otherwise violate the provisions of Section 12 below.

 

2. Base Salary and 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 $325,000 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 President and Chief Financial Officer.  Nothing in this Agreement shall preclude the Company or any affiliate of the Company from terminating or amending any employee benefit plan or program from time to time after the Effective Date.

 

4. Vacation

 

The Executive shall be entitled to 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:

	
Dennis McGrath

2 Colonial Court

Medford, New Jersey  08055

Fax:  (609) 953-9304

	  	  

 

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 4, 2011, to become effective only upon and subject to the Closing.

 

 

	  	
PHOTOMEDEX, INC.

	  	
By:

	  /s/ Richard DePiano
	  	  	  
	  	
EXECUTIVE

	  	  /s/ Dennis McGrath
	  	
Dennis McGrath

 

 

  

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SCHEDULE A

 

CORPORATE BOARDS

 

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

 

	
•  

	
Noninvasive Medical Technologies, Inc,

 

	
•  

	
RICOMM Systems Inc.

 

	
•  

	
Taylor University Board of Visitors

 

 

 

 

15ex_10-2.htm

 

EXHIBIT 10.2

 

 

 

AMENDED AND RESTATED

RESTRICTED STOCK AGREEMENT

THIS AMENDED AND RESTATED RESTRICTED STOCK AGREEMENT (the “Restricted Stock Agreement”) is made and entered into as of July 4, 2011 by and between PhotoMedex, Inc., a Nevada corporation (the “Company”), having its executive offices at 147 Keystone Drive, Montgomeryville, PA 18936, and Dennis M. McGrath (the “Purchaser”), having his residence at 2 Colonial Court, Medford, NJ 08055.  The parties acknowledge and agree that this Restricted Stock Agreement shall become effective only upon 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 of the Merger (the “Closing”) does not occur on or prior to January 31, 2012, this Restricted Stock Agreement shall become null and void and of no further effect; provided, however, that the Original Agreement (as hereinafter defined) shall then continue in effect in accordance with its terms.

WHEREAS, the parties previously entered into that certain Restricted Stock Agreement dated March 30, 2011 (the “Effective Date”) (the “Original Agreement”); and

WHEREAS, in connection with and expressly conditioned upon the Closing, and in further consideration of the Company’s agreement to grant the Purchaser the right to acquire additional Restricted Shares under a Restricted Stock Agreement to be entered between the Company and the Purchaser of even date herewith, the Company and the Purchaser agree to amend and restate the Original Agreement on the terms provided herein; and

WHEREAS, capitalized terms used but not otherwise defined herein shall have the meaning set forth in the PhotoMedex, Inc. 2005 Equity Compensation Plan (the “Plan”).  The Purchaser agrees to be bound by the terms and conditions of the Plan, which are incorporated herein by reference and which control in case of any conflict with this Restricted Stock Agreement, except as otherwise specifically provided in the Plan.

SECTION 1 ACQUISITION OF SHARES.

(a)           Issuance.  On the terms and conditions set forth in this Restricted Stock Agreement, the Company agrees to issue One Hundred Thousand (100,000) Restricted Shares to the Purchaser.  The issuance shal1 occur at the offices of the Company as of the Effective Date set forth above.

 

(b)           Consideration.  The Purchaser agrees to pay to the Company the sum of $0.01 (the “Per Share Purchase Price”) for each of such Shares, representing the par value thereof.  Payment shall be made on the issuance date by delivery to the Company of the Purchaser's check in the amount of the aggregate purchase price.

 

(c)           Defined Terms.  Certain capitalized terms are defined in Sections 2 and 3 of this Restricted Stock Agreement.

 

  

  

  

SECTION 2  RIGHT OF REPURCHASE.

 

(a)           Scope of Repurchase Right.  Until they vest in accordance with Section 2(b) below, the Purchased Shares shall be Restricted Shares and shall be subject to the Right of Repurchase.  The Company may exercise its Right of Repurchase only during the Repurchase Period following the termination of the Purchaser's Service.

 

(b)           Lapse of Repurchase Right.

 

(i)           Notwithstanding any provisions of the Plan to the contrary, the Right of Repurchase with respect to such number of the Restricted Shares that, when considered in connection with all other payments to be made to the Purchaser in connection with the Closing, would result in the Purchaser receiving the maximum amount he could receive without the acceleration of the Restricted Shares (and all other applicable payments) being subject to the excise tax provisions of Section 4999 of the Code, shall lapse upon the Closing, so long as the Purchaser continues to be a Service Provider at all times from the Effective Date through the Closing (such number of Restricted Shares as shall so vest upon the Closing to be referred to herein as the “Accelerated Shares”).  Except as otherwise provided in Section 2(b)(ii), the Right of Repurchase with respect to the remaining Restricted Shares (i.e., all Restricted Shares other than the Accelerated Shares) shall lapse with respect to 33 1/3 percent (33 1/3%) of such remaining Restricted Shares on each of the first, second and third anniversaries of the Closing, so long as the Purchaser continues to be a Service Provider at all times from the Effective Date through each such anniversary.  The determination of the number of Accelerated Shares shall be made by an accounting firm selected by the Company and consented to by the Purchaser, which consent shall not be unreasonably withheld.

 

(ii)           Notwithstanding Section 2(b)(i), following the Closing, all of the remaining Restricted Shares shall earlier vest, and the Right of Repurchase shall lapse, upon the first to occur of (i) the termination of the Purchaser’s employment by the Company without Cause or as the result of the Company’s non-renewal of the Purchaser’s New Employment Agreement; (ii) the termination of the Purchaser’s employment with the Company by him for Good Reason; or (iii) the termination of the Purchaser’s employment with the Company as the result of his death or Disability, in each instance so long as the Purchaser continues to be employed by the Company at all times from the Effective Date through the date of the applicable vesting event.

 

(c)           Escrow.  Upon issuance, the certificate(s) for Purchased Shares shall be deposited in escrow with the Company to be held in accordance with the provisions of this Restricted Stock Agreement.  Any additional or exchanged securities or other property described in Section 2(f) below shall be delivered to the Company to be held in escrow.  All ordinary cash dividends on Purchased Shares (or on other securities held in escrow) shall be paid directly to the Purchaser and shall not be held in escrow.  Purchased Shares, together with any other assets held in escrow under this Restricted Stock Agreement, shall be (i) surrendered to the Company for repurchase upon exercise of the Right of Repurchase or (ii) released to the Purchaser upon his or her request to the extent that the Purchased Shares have ceased to be Restricted Shares (but not more frequently than once every six months).  In any event, all

 

  

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Purchased Shares that have ceased to be Restricted Shares, together with any other vested assets held in escrow under this Restricted Stock Agreement, shall be released within 90 days after the termination of the Purchaser's Service.

 

(d)           Exercise of Repurchase Right.  The Company shall be deemed to have exercised its Right of Repurchase automatically for all Restricted Shares as of the commencement of the Repurchase Period, unless the Company during the Repurchase Period notifies the holder of the Restricted Shares pursuant to Section 9 that it will not exercise its Right of Repurchase for some or all of the Restricted Shares.  During the Repurchase Period, the Company shall pay to the holder of the Restricted Shares the purchase price determined under Sections 1(b) and 2(a) above for the Restricted Shares being repurchased ($0.01 per Share, as adjusted for stock splits, stock dividends and similar corporate transactions).  Payment shall be made in cash or cash equivalents and/or by canceling indebtedness to the Company incurred by the Purchaser.  The certificate(s) representing the Restricted Shares being purchased shall be delivered to the Company (if not already held by the Company).

 

(e)           Termination of Rights as Stockholder.  If the Right of Repurchase is exercised in accordance with this Section 2 and the Company makes available the consideration for the Restricted Shares being repurchased, then the person from whom the Restricted Shares are repurchased shall no longer have any rights as a holder of the Restricted Shares (other than the right to receive payment of such consideration).  Such Restricted Shares shall be deemed to have been repurchased pursuant to this Section 2 whether or not the certificate(s) for such Restricted Shares have been delivered to the Company or the consideration for such Restricted Shares has been accepted.

 

(f)           Additional or Exchanged Securities and Property.  In the event of a merger or consolidation of the Company with or into another entity, any other corporate reorganization, a stock split, the declaration of a stock dividend, the declaration of an extraordinary dividend payable in a form other than stock, a spin-off, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company's outstanding securities, any securities or other property (including cash or cash equivalents) that are by reason of such transaction exchanged for, or distributed with respect to, any Restricted Shares shall continue to be subject to the Right of Repurchase.  Appropriate adjustments to reflect the exchange or distribution of such securities or property shall be made to the number and/or class of the Restricted Shares and to all of the provisions of this Section 2, including the price per share to be paid upon the exercise of the Right of Repurchase, provided that the aggregate purchase price payable for the Restricted Shares shall remain the same.  In the event of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, the Right of Repurchase may be exercised by the Company’s successor.

 

(g)           Transfer of Restricted Shares.  The Purchaser shall not transfer, assign, encumber or otherwise dispose of any Restricted Shares without the Company's written consent (which consent may be withheld with or without any reason therefor), except as provided in the following sentence.  The Purchaser may transfer Restricted Shares to one or more members of the Purchaser's Immediate Family or to a trust or partnership established by the Purchaser for the benefit of the Purchaser and/or one or more members of the Purchaser's Immediate Family, provided in either case that the Transferee agrees in writing on a form prescribed by the

 

  

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Company to be bound by all provisions of this Restricted Stock Agreement.  If the Purchaser transfers any Restricted Shares, then this Restricted Stock Agreement shall apply to the Transferee to the same extent as to the Purchaser.

 

(h)           Assignment of Repurchase Right.  The Board of Directors may freely assign the Company's Right of Repurchase, in whole or in part.  Any person who accepts an assignment of the Right of Repurchase from the Company shall assume all of the Company's rights and obligations under this Section 2.

 

(i)           Part-Time Employment and Leaves of Absence.  If the Purchaser commences working on a part-time basis, then the Company may adjust the vesting schedule set forth in Section 2(b) above in accordance with the Company's part-time work policy or the terms of an agreement between the Purchaser and the Company pertaining to his or her part-time schedule.  If the Purchaser goes on a leave of absence, then the Company may adjust the vesting schedule set forth in Section 2(b) above in accordance with the Company’s leave of absence policy or the terms of such leave.  Except as provided in the preceding sentence, Service shall be deemed to continue while the Purchaser is on a bona fide leave of absence, if (i) such leave was approved by the Company in writing and (ii) continued crediting of Service is expressly required by the terms of such leave or by applicable law (as determined by the Company).  Service shall be deemed to terminate when such leave ends, unless the Purchaser immediately returns to active work.

 

SECTION 3  OTHER DEFINITIONS.

”Cause” shall have the meaning ascribed to such term under the New Employment Agreement.

“Good Reason” shall have the meaning ascribed to such term under the New Employment Agreement; provided, however, that, for purposes of this Restricted Stock Agreement only, subsection (c)(3) of the definition of Good Reason shall read as follows:

(3)           A reduction of the Executive’s base salary or bonus opportunity.

“Immediate Family” shall mean any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law and shall include adoptive relationships.

“New Employment Agreement” shall mean an amended and restated employment agreement to be entered into by and between the Purchaser and the Company which agreement shall become effective only upon and subject to the Closing, and which shall supercede in its entirety that certain Amended and Restated Employment Agreement dated May 6, 2008, including any amendments thereto, as previously entered into by and between the Company and the Purchaser.

“Purchased Shares” shall mean the Shares purchased by the Purchaser pursuant to this Restricted Stock Agreement.

  

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“Repurchase Period” shall mean a period of 180 consecutive days commencing on the date when the Purchaser's Service terminates for any reason.

“Restricted Shares” shall mean a Purchased Share that is subject to the Right of Repurchase.

“Right of Repurchase” shall mean the Company's right of repurchase described in Section 2.

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Securities Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Service” shall mean service to the Company or its subsidiaries as an Employee.

“Share” shall mean one share of Stock.

“Stock” shall mean the Common Stock of the Company, par value $0.01 per Share.

“Transferee” shall mean any person to whom the Purchaser directly or indirectly transfers any Purchased Shares.

SECTION 4  OTHER RESTRICTIONS ON TRANSFER

(a)           Purchaser Representations.  In connection with the issuance and acquisition of Shares under this Restricted Stock Agreement, the Purchaser hereby represents and warrants to the Company as follows:

 

(i)           The Purchaser has received a copy of an offering memorandum relating to the sale of the Purchased Shares to the Purchaser hereunder.

 

(ii)           The Purchaser acknowledges his or her understanding that if he or she is an “affiliate” of the Company, the Purchaser's right to resell the Purchased Shares after the Company's Right of Repurchase lapses is restricted under the Securities Act.

 

(iii)           The Purchaser will not sell, transfer or otherwise dispose of the Purchased Shares in violation of the Securities Act or the rules promulgated thereunder, including Rule 144 under the Securities Act.  The Purchaser agrees that he or she will not dispose of the Purchased Share unless and until he or she has complied with all requirements of this Restricted Stock Agreement applicable to the disposition of Purchased Shares and he or she has provided the Company with written assurances, in substance and form reasonably satisfactory to the Company, that (A) the proposed disposition does not require registration of the Purchased Shares under the Securities Act or all appropriate action necessary for compliance with the registration requirements of the Securities Act or with any exemption from registration available under the Securities Act (including Rule 144) has been taken and (B) the proposed disposition will not result in the contravention of any transfer restrictions applicable

 

  

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to the Purchased Shares under securities law.

 

(b)           Securities Law Restrictions.

 

(i)           Regardless of whether the offering and sale of Shares under this Restricted Stock Agreement have been registered under the Securities Act or have been registered or qualified under the securities laws of any state, the Company at its discretion may impose restrictions upon the sale, pledge or other transfer of the Purchased Shares (including the placement of appropriate legends on stock certificates or the imposition of stop-transfer instructions) if, in the judgment of the Company, such restrictions are necessary or desirable in order to achieve compliance with the Securities Act, the securities laws of any state or any other law.

 

(ii)           Inasmuch as the Purchaser is an affiliate of the Company by virtue of the fact that he is Chief Executive Officer of the Company, the Purchaser is subject to Section 16 of the Securities and Exchange Act, and is thereby obliged to make reports to the Securities and Exchange Commission under the Forms 3, 4 and 5 and is subject to the “short swing profit” rules.

 

(iii)           The Purchaser is also obliged to comply with the Company’s Securities Trading Policy which provides for, among other things, certain black-out or no-trading periods and, consistent with the Securities Act, not to trade shares based on material non-public information that comes into the Purchaser’s possession.

 

(c)           Rights of the Company.  The Company shall not be required to (i) transfer on its books any Purchased Shares that have been sold or transferred in contravention of this Restricted Stock Agreement or (ii) treat as the owner of Purchased Shares, or otherwise to accord voting, dividend or liquidation rights to, any transferee to whom Purchased Shares have been transferred in contravention of this Restricted Stock Agreement.

 

SECTION 5  SUCCESSORS AND ASSIGNS.

Except as otherwise expressly provided to the contrary, the provisions of this Restricted Stock Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and shall be binding upon the Purchaser and the Purchaser's legal representatives, heirs, legatees, distributees, assigns and transferees by operation of law, whether or not any such person has become a party to this Restricted Stock Agreement or has agreed in writing to join herein and to be bound by the terms, conditions and restrictions hereof.

SECTION 6  NO RETENTION RIGHTS.

Nothing in this Restricted Stock Agreement shall confer upon the Purchaser any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Purchaser) or of the Purchaser, including without limitation such rights as the Purchaser has under the New Employment Agreement.  If there is any conflict between this Restricted Stock Agreement and the New Employment Agreement, the New Employment Agreement shall

  

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control.

SECTION 7  TAX ELECTION & SHARE WITHHOLDING.

(a)           Tax Election.  The acquisition of the Purchased Shares may result in adverse tax consequences that may be avoided or mitigated by filing an election under Code Section 83(b).  Such election may be filed only within 30 days after the Effective Date. The Purchaser should consult with his or her tax advisor to determine the tax consequences of acquiring the Purchased Shares and the advantages and disadvantages of filing the Code Section 83(b) election.  The Purchaser acknowledges that it is his or her sole responsibility, and not the Company's responsibility, to file a timely election under Code Section 83(b), even if the Purchaser requests the Company or its representatives to make this filing on his or her behalf.  CIRCULAR 230 DISCLAIMER:  Nothing contained herein concerning certain federal income tax considerations is intended or written to be used, and cannot be used for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transactions or tax-related matters addressed herein.

 

(b)           Share Withholding.  The Company shall have the power and right to deduct or withhold, or require the Purchaser to remit to the Company, an amount sufficient to satisfy the minimum federal, state, and local taxes required by law to be withheld with respect to any grant, sale, exercise, or payment made under or as a result of this Restricted Stock Agreement.  The foregoing notwithstanding, the Purchaser may elect to satisfy the withholding requirement, if any, in whole or in part, by having the Company withhold Shares from the Shares that would otherwise be transferred to the Purchaser having a Fair Market Value, on the date the tax is to be determined, equal to the minimum amount of any required withholding taxes as the result of the vesting of the Shares, and the Company shall remit the amount of such withholding to the proper tax authorities.  All elections shall be made in writing and signed by the Purchaser.

 

SECTION 8  LEGENDS.

All certificates evidencing Purchased Shares shall bear the following legend:

“THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE  TERMS OF A WRITTEN AGREEMENT BETWEEN THE ISSUER OF SUCH SHARES AND THE REGISTERED HOLDER OF SUCH SHARES (OR THE PREDECESSOR IN INTEREST TO SUCH HOLDER OF SHARES).  SUCH AGREEMENT GRANTS TO SUCH ISSUER CERTAIN REPURCHASE RIGHTS UPON TERMINATION OF SERVICE WITH THE COMPANY.  THE SECRETARY OF SUCH ISSUER WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE.”

If required by the authorities of any state in connection with the issuance of the Purchased Shares, the legend or legends required by such state authorities shall also be endorsed on all such certificates.

  

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SECTION 9  NOTICE.

Any notice required by the terms of this Restricted Stock Agreement shall be given in writing and shall be deemed effective upon (i) personal delivery, (ii) deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid or (iii) deposit with a recognized overnight courier service, with shipping charges prepaid.  Notice shall be addressed to the Company at its principal executive office and to the Purchaser at the address that he or she most recently provided to the Company in accordance with this Section 9.

SECTION 10  ENTIRE AGREEMENT.

This Restricted Stock Agreement, together with the Plan, constitute the entire contract between the parties hereto with regard in the subject matter hereof and supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) which relate to the subject matter hereof, including, without limitation, the Original Agreement.

SECTION 11  CONFLICTS OF LAW.

This Restricted Stock Agreement shall be governed by, and construed in accordance with, the laws of the State of Nevada, without regard to conflict of laws principles.

IN WITNESS WHEREOF, each of the parties has executed this Restricted Stock Agreement, in the case of the Company by its duly authorized officer, as of the 4th of July, 2011, to become effective only upon and subject to the Closing.

	
PURCHASER:

 

 

/s/ Dennis M. McGrath             

Name: Dennis M. McGrath

 

	
PHOTOMEDEX, INC.

 

 

By:  /s/ Richard J. DePiano             

Name: Richard J. DePiano

Title: Chairman of the Board or Directors

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