EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (“Agreement”) is effective this 27th
day of
October, 2008 (the “Effective Date”), by and between Sharps Compliance Corp, a
Delaware corporation, with principal offices located at 0000 Xxxxx Xxxxx, Xxxxx
000, Xxxxxxx, Xxxxx 00000 (hereinafter referred to as "Employer"), and Xxxx
X.
Grow (hereinafter referred to as "Employee").
WITNESSETH:
WHEREAS,
the Employee is currently a member of the Board of Directors of
Employer;
WHEREAS,
(i) the Employer is desirous of appointing the Employee as President and Chief
Operating Officer with Employee continuing as a member of the Board of Directors
of Employer and (ii) the Employee is desirous to undertake such
responsibilities;
NOW,
THEREFORE, in consideration of the foregoing premises, the mutual agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE
I
DUTIES
1.1 Duties.
During
the Term of Employment (as defined below), the Employer agrees to employ
Employee as President and Chief Operating Officer and the Employee agrees to
serve the Employer in such capacity upon the terms and subject to the conditions
set forth in this Agreement.
1.2 Extent
of Duties.
The
Employee shall devote substantially all of his business time, energy and skill
to the affairs of the Employer as the Employer working under the direction
of
the Chief Executive Officer and the Board of Directors of the
Company.
ARTICLE
II
TERM
OF EMPLOYMENT
2.1 The
term
of this Employment Agreement will begin on the date hereof and will continue
for
two (2) years hereafter (the “Initial Term of Employment”). This Agreement may
be extended for a one (1) year period at the end of the Initial Term of
Employment should both Employer and Employee mutually agree upon such extension
and such extension be evidenced in writing at least thirty (30) days in advance
of the end of the Initial Term of Employment.
ARTICLE
III
COMPENSATION
3.1 Annual
Base Compensation.
As
compensation for services rendered under this Agreement, Employee shall be
entitled to receive from the Employer an annual base salary (before standard
deductions) of $260,000 during the Term of Employment. Employees’ annual base
salary shall be payable on a bi-weekly basis and in accordance with the
prevailing practice and policy of the Employer.
3.2 Benefits.
Employee shall be entitled to participate in the Employer’s group benefit plan
as shown on the attached Benefits Plan Summary. Employee will also be entitled
to, (i) the use, during the term of Employee’s employment, of a furnished
residence (the selection of such being mutually-agreed between Employer and
Employee) paid for by the Employer, (ii) two (2) Employer-paid round-trips
per
month to Employee’s residence during the term of Employee’s employment and (iii)
a grant of 300,000 restricted and unregistered shares of Employer common stock
under the terms and conditions set forth in the attached Restricted Stock Award
Agreement.
Employee
recognizes and agrees that he is no longer eligible to participate in the
Non-Employee Board of Director Compensation Plan other than any restricted
stock
awards previously granted to Employee will remain the property of the Employee
and will not be subject to forfeiture.
Employee
is eligible for bonuses as the sole discretion of the Board of
Directors.
ARTICLE
IV
TERMINATION
4.1 Termination
by the Employer Without Cause.
Subject
to the provisions of this Section 4.1, this Agreement may be terminated by
the
Employer without cause upon thirty (30) days prior written notice thereof given
to Employee. In the event of termination pursuant to this Section 4.1, (a)
the
Employer shall continue to pay Employee his then effective base salary under
Section 3.1 hereof and all benefits under Sections 3.2 hereof for a full three
(3) month period, and (b) any unvested and outstanding stock options or
restricted stock held by Employee shall become fully vested and exercisable.
Payment or performance by the Employer in accordance with this Section shall
constitute Employee's full severance pay and the Employer shall have no further
obligation to Employee arising out of such termination.
4.2 Termination
by the Employer for Cause.
The
Employer may terminate this Agreement at any time if such termination is for
"cause" (as defined below), by delivering to Employee written notice describing
the cause of termination thirty (30) days before the effective date of such
termination and by granting Employee at least thirty (30) days to cure the
cause. In the event the employment of Employee is terminated for "cause",
Employee shall be entitled only to (i) the base salary earned pro rata to the
date of such termination with no entitlement to any base salary continuation
payments or benefits continuation (except as specifically provided by the terms
of an employee benefit plan of the Employer) and (ii) stock options and/or
restricted stock that has vested through the date of termination for cause.
Except as otherwise provided in this Agreement, the determination of whether
Employee shall be terminated for "cause" shall be made by the Board of Directors
of the Employer, in reasonable exercise of its business judgment, and shall
be
limited to the occurrence of the following events:
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a)
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Conviction
of or a plea of nolo contendere to the charge of a felony (which,
through
lapse of time or otherwise, is not subject to
appeal);
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b)
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Willful
refusal without proper legal cause to perform, or gross negligence
in
performing, Employee's duties and
responsibilities;
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c)
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Material
breach of fiduciary duty to the Employer through the misappropriation
of
funds or property of the Employer or its subsidiaries;
or
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d)
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The
unauthorized absence of Employee from work (other than for sick leave
or
disability) for a period of 30 working days or more during any period
of
45 working days during the Term of
Employment.
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4.3 Termination
Upon Death or Permanent Disability.
In the
event that Employee dies, this Agreement shall terminate upon the Employee's
death. Likewise, if the Employee becomes unable to perform the essential
functions of the position, with or without reasonable accommodation, on account
of illness, disability, or other reason whatsoever for a period of more than
one
(1) month, this Agreement shall terminate effective upon such incapacity, and
Employee (or his legal representatives/trust) shall be entitled only to the
base
salary earned pro rata to the date of such termination with no entitlement
to
any base salary continuation payments or benefits continuation.
4.4 Voluntary
Termination by Employee.
Employee may terminate this Agreement at any time upon delivering thirty (30)
days written notice of resignation to the Employer. In the event of such
voluntary termination, Employee shall be entitled to (i) his base salary earned
pro rata to the date of his resignation (but no base salary continuation
payments or benefits continuation) and (ii) stock options and/or restricted
stock that has vested through the date of voluntary termination
ARTICLE
V
CONFIDENTIAL
INFORMATION AND NONCOMPETITION
5.1 Nondisclosure.
During
the term of Agreement and thereafter, Employee shall not, without the prior
written consent of the Board of Directors, disclose or use for any purpose
(except in the course of his employment under this Agreement and in furtherance
of the business of the Employer) confidential information or proprietary data
of
the Employer (or any of its subsidiaries), except as required by applicable
law
or legal process, provided, however, that confidential information shall not
include any information known generally to the public or ascertainable from
public or published information (other than as a result of unauthorized
disclosure by Employee) or any information of a type not otherwise considered
confidential by persons engaged in the same business or a business similar
to
that conducted by the Employer (or any of its subsidiaries).
5.2 Noncompetition.
The
Employer and Employee agree that the services rendered by Employee hereunder
are
unique and irreplaceable. Employee hereby agrees that, during the Term of
Employment and for a period of twelve (12) months thereafter, Employee shall
not
(except in the course of his employment under this Agreement and in furtherance
of the business of the Employer or any of its subsidiaries), (i) engage in
as
principal, consultant or employee in any segment of a business of a Employer,
partnership or firm ("Business Segment") that is directly competitive with
any
business of the Employer in one of its major commercial or geographic markets
or
(ii) hold an interest (except as a holder of less than 5% interest in a publicly
traded firm or mutual funds, or as a minority stockholder or unitholder in
a
form not publicly traded) in a company, partnership or firm with a Business
Segment that is directly competitive, without the prior written consent of
the
Employer.
5.3 Validity
of Noncompetition.
The
foregoing provisions of Section 5.2 shall not be held invalid because of the
scope of the territory covered, the actions restricted thereby, or the period
of
time such covenant is operative. Any judgment of a court of competent
jurisdiction may define the maximum territory, the actions subject to and
restricted by Section 5.2 and the period of time during which such agreement
is
enforceable.
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5.4 Noncompetition
Covenants Independent.
The
covenants of the Employee contained in Section 5.2 will be construed as
independent of any other provision in this Agreement; and the existence of
any
claim or cause of action by the Employee against the Employer will not
constitute a defense to the enforcement by the Employer of said covenants.
The
Employee understands that the covenants contained in Section 5.2 are essential
elements of the transaction contemplated by this Agreement and, but for the
agreement of the Employee to Section 5.2, the Employer would not have agreed
to
enter into such transaction. The Employee has been advised to consult with
counsel in order to be informed in all respects concerning the reasonableness
and propriety of Section 5.2 and its provisions with specific regard to the
nature of the business conducted by the Employer and the Employee acknowledges
that Section 5.2 and its provisions are reasonable in all respects.
5.5 Confidential
and Proprietary Information.
Confidential and Proprietary Information shall include, without limitation,
matters of a technical nature, such as know-how, formula, computer programs,
software and documentation, secret processes or machines, inventions, research
projects, plans for further development and matters of a business nature, such
as information about costs, profits, markets, sales lists of customers, and
business data regarding customers, salaries and other personnel data, and any
other information of a similar nature to the extent not available to the
public.
The
Employee shall promptly disclose to the Employer or its designee any and all
ideas, inventions, improvements, discoveries, developments, innovations, or
works of authorship (hereinafter referred to as the "Inventions"), whether
patentable or unpatentable, copyrightable or uncopyrightable, made, created,
developed, discovered, worked on or conceived by the Employee, either solely
or
jointly with others, whether or not reduced to drawings, written description,
documentation, models or other intangible form, during the Term of Employment
and for a period of six (6) months thereafter that relate to, or arise out
of,
any developments, services research or products of, or pertain to the business
of, the Employer.
ARTICLE
VI
MISCELLANEOUS
6.1 Modification;
Amendment; Waiver.
No
modification, amendment or waiver of any provisions of this Agreement shall
be
effective unless approved in writing by both parties. The failure at any time
to
enforce any of the provisions of this Agreement shall in no way be construed
as
a waiver of such provisions and shall not affect the right of either party
thereafter to enforce each and every provision hereof in accordance with its
terms.
6.2
Governing
Law; Jurisdiction.
This
Agreement and performance under it, and all proceedings that may ensue from
its
breach, shall be construed in accordance with and under the laws of the State
of
Delaware.
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6.4
Notices.
All
notices and other communications under this Agreement shall be in writing and
shall be given in person or by personal delivery, overnight delivery, or first
class mail. certified or registered with return receipt requested, with postal
or delivery charges prepaid, and shall be deemed to have been duly given when
delivered personally, or three days after mailing first class, certified or
registered with return receipt requested, to the respective persons named
below:
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If
to the Employer:
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Corporate
Secretary
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0000
Xxxxx Xxxxx, Xxxxx 000
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Xxxxxxx,
Xxxxx 00000
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Xxxx
X. Grow
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0000
Xxxxxxxx Xxxx Xxxxx
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Xxxxxxx,
XX 00000
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IN
WITNESS WHEREOF, the parties have executed this Agreement effective as of the
day and year indicated above.
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APPROVED
AND AGREED:
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COMPANY:
SHARPS COMPLIANCE CORP.
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By:
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Name:
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Title:
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Chairman,
Compensation Committee of the Board of Directors
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By:
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Name:
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Title:
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Chief
Executive Officer
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EMPLOYEE:
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Xxxx
X. Grow
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