8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)

September 7, 2010

SHARPS COMPLIANCE CORP.

Commission File No. 001-34269

(Exact Name Of Registrant As Specified In Its Charter)

Delaware (State Or Other Jurisdiction Of Incorporation Or Organization) 74-2657168 (IRS Employer Identification No.)

9220 Kirby Drive, Suite 500

Houston, Texas 77054

(Address Of Principal Executive Offices)

Registrant’s Telephone Number, Including Area Code)

713-432-0300

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-2(b))

 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory arrangements of Certain Officers

Item 9.01                 Financial Statements and Exhibits

SIGNATURES

INDEX TO EXHIBITS

Press Release

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Item 5.02(b). Retirement of Principal Executive Officer.

On September 7, 2010, Sharps Compliance Corp. (the "Company" or "Sharps") announced the retirement of Dr. Burton J. Kunik as the Company’s Chief Executive Officer, effective September 30, 2010. Also, Dr. Kunik will not stand for reelection to the Board of Directors at the Company’s Annual Meeting in November 2010.

A copy of the press release issued by the Company is attached hereto as Exhibit 99.1.

Dr. Kunik and the Company entered into an agreement dated September 7, 2010 which outlines the terms of Dr. Kunik’s separation (the “Separation Agreement”). Under the Separation Agreement Dr. Kunik is entitled to, (i) a cash payment of $477,314 (payable $68,188 at September 30, 2010 and $409,126 on April 1, 2011) in exchange for cancellation of Dr. Kunik’s current employment agreement dated November 29, 2004 which was scheduled to expire under its own terms in December 2011, (ii) acceleration of the vesting of all unvested stock options (40,000 shares) held by Dr. Kunik at September 30, 2010 and (iii) “piggy-back” rights with respect to any public offering by the Company through September 30, 2012. The Separation Agreement also includes customary confidentiality, non-compete and release provisions.

The complete text of the Separation Agreement is attached as Exhibit1 10.1  and is incorporated herein by reference.

On September 7, 2010, the Company and Dr. Kunik entered into a consulting agreement (“Consulting Agreement”) whereby Dr. Kunik will provide certain consulting services to the Company during the term from October 1, 2010 through September 30, 2011. Dr. Kunik will be paid a monthly amount of $10,000 (in arrears) for services provided.

The complete text of the Consulting Agreement is attached as Exhibit1 10.2 and is incorporated herein by reference.

Item 5.02(c). Appointment of Principal Executive Officer.

The Company’s Board of Directors have appointed David P. Tusa as Chief Executive Officer, effective with Dr. Kunik’s retirement (September 30, 2010), in addition to his role as President.

Item 5.02(e). Compensatory Arrangements of Certain Officers.

The information set forth in Item 5.02(b) above is hereby incorporated by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.  

Exhibit No.	Description
10.1	Separation Agreement between Sharps Compliance and Dr. Burton J. Kunik dated September 7, 2010.
10.2	Consulting Agreement between Sharps Compliance and Dr. Burton J. Kunik dated September 7, 2010.
99.1	Press Release Announcing the Retirement of  Dr. Burton J. Kunik as Chief Executive Officer; Appointment of David P. Tusa as Chief Executive Officer.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: September 7, 2010                                                                                               SHARPS COMPLIANCE CORP.

By: /s/ DAVID P. TUSA

David P. Tusa

President

EX-10

Exhibit 10.1

EMPLOYMENT SEPARATION AGREEMENT

This EMPLOYMENT SEPARATION AGREEMENT (“Agreement”) is made and entered into this the 7th day of September, 2010, by and between Sharps Compliance, Inc., a Texas corporation (“Sharps” or “Company”), having its office and principle place of business at 9220 Kirby Drive, Suite 500, Houston, Texas 77054, and Dr. Burton J. Kunik (“Dr. Kunik”), residing at 5314 Val Verde, Houston, Texas 77056.

WITNESSETH

WHEREAS, Dr. Kunik desires to retire and resign from employment at Sharps, and terminate the November 29, 2004 Employment Agreement (“Employment Agreement”); and

WHEREAS, Sharps is willing to accept Dr. Kunik’s resignation and termination of his Employment Agreement, pursuant to the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing, of the mutual promises and agreements herein contained, and of other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is hereby agreed as follows:

1.Effective Date.  Dr. Kunik and Sharps will jointly announce Dr. Kunik’s retirement on September 7, 2010 and that he shall not run for re-election as a member of the Board of Directors.  Dr. Kunik’s employment with Sharps will officially terminate effective September 30, 2010.  Sharps will continue Dr. Kunik’s salary, less applicable withholdings and deductions, through September 30, 2010.  Additionally, Sharps will pay Dr. Kunik for all reimbursable expenses incurred through September 30, 2010.

2.Consideration.  In consideration for signing this Agreement, and in exchange for the promises, covenants and waivers set forth herein, Sharps will, provided Dr. Kunik has not revoked this Agreement:

a.pay Dr. Kunik a gross payment of $477,314.00 (“Severance Payment”), less applicable withholdings and deductions, which is an amount equal to fourteen (14) months of Dr. Kunik’s net annual base compensation.  The Severance Payment shall be due in two installments: (1) The first payment of $68,187.71 shall be due and payable immediately on Dr. Kunik’s termination on September 30, 2010; and (2) The remaining amount of $409,126.29 shall be due and payable on April 1, 2011.  The Severance Payment is to be payable to Dr. Kunik’s estate and heirs in the event of Dr. Kunik’s death prior to April 1, 2011.

b.accelerate all of Dr. Kunik’s unvested stock options, pursuant to Section 3.4 of the Employment Agreement, and Dr. Kunik may exercise any or all such options within the two (2) year period beginning on October 1, 2010 and ending on September 30, 2012; and

c.if, at any time in the two year period from the date of this Agreement, Sharps shall determine to register any of its securities, either for its own account or the account of a security holder or holders, in a registration statement covering the sale of

securities to the general public other than a registration relating to a Rule 145 transaction or any successor rule thereto, Sharps will provide Dr. Kunik with certain piggyback rights pursuant to this paragraph 2(c) and will:

i.give Dr. Kunik sufficient notice which is estimated to be approximately  thirty (30) days before the initial filing of such registration if such registration relates to a secondary public offering or related subsequent registration of Sharps,; provided, however, if the registration relates to a Form S-3, then Sharps will be required to give Dr. Kunik reasonably prompt written notice after a decision to make such filing has been made;

ii.include in such registration (and any related qualification under blue sky laws or other compliance), and in any underwriting involved therein, all the securities specified in a written request(s) made within thirty (30) days after receipt of such written notice from Sharps, or in the case of registration on Form S-3 or any successor form thereto, within seven (7) business days after the receipt of such written notice, by Dr. Kunik; and

iii.retain the right, in its sole discretion, to terminate or withdraw any registration initiated by Sharps under this paragraph 2(c) prior to the effectiveness of such registration, regardless of  whether or not Dr. Kunik has elected to include his securities in such registration.

3.Release.  In consideration of the Severance Payment, as well as other good and valuable consideration, Dr. Kunik hereby releases and forever discharges Sharps from all debts, obligations, promises, covenants, agreements, contracts, endorsements, bonds, controversies, suits, actions, causes of action, judgments, damages, expenses, claims or demands, in law or in equity, which Dr. Kunik ever had, now has, or which may arise in the future, regarding any matter arising on or before the date of Dr. Kunik’s execution of this Agreement, including but not limited to all claims (whether known or unknown) regarding Dr. Kunik’ ;s employment at or separation of employment from Sharps, any contract (express or implied), including Dr. Kunik’s Employment Agreement dated November 29, 2004, any claim for equitable relief or recovery of punitive, compensatory, or other damages or monies, attorneys' fees, any tort, and all claims for alleged discrimination based upon age, race, color, sex, sexual orientation, marital status, religion, national origin, handicap, disability, genetic information or retaliation, including any claim, asserted or unasserted, which could arise under Title VII of the Civil Rights Act of 1964; the Equal Pay Act of 1963; the Age Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act of 1990; the Americans With Disabilities Act of 1990; the Civil Rights Act of 1866, 42 U.S.C. § 1981; the Family and Medical Leave Act of 1993; the Employee Retirement Income Security Act of 1974; the Civil Rights Act of 1991; the Worker Adjustment and Retraining Notification (“WARN”) A ct of 1988; the Corporate and Criminal Fraud Accountability Act of 2002, 18 U.S.C. § 1514A, also known as the Sarbanes Oxley Act; and any other federal, state or local laws, rules or regulations, whether equal employment opportunity

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laws, rules or regulations or otherwise, or any right under any Sharps pension, welfare, or stock plans.  This Agreement may not be cited as, and does not constitute any admission by Sharps of, any violation of any such law or legal obligation.

4.No Other Claims.  Dr. Kunik represents and agrees that he has not filed any lawsuit or arbitration against Sharps, or filed or caused to be filed any charge or complaint against Sharps with any municipal, state or federal agency charged with the enforcement of any law.  Dr. Kunik agrees not to assist or otherwise participate willingly or voluntarily in any lawsuit or arbitration which relates to any matter that involves Sharps, and that occurred up to and including the date of Dr. Kunik’s execution of this Agreement, unless required to do so by court order, subpoena or other directive by a court, arbitration pa nel, or unless requested to do so by Sharps.

5.No Other Obligations.  Dr. Kunik represents, warrants and acknowledges that Sharps owes Dr. Kunik no wages, commissions, bonuses, sick pay, personal leave pay, severance pay, vacation pay or other compensation or benefits or payments or form of remuneration of any kind or nature, other than that which is specifically described in this Agreement.

6.Non Disparagement.  Dr. Kunik will not disparage or criticize Sharps, or issue any communication, written or otherwise, that reflects adversely on or encourages any adverse action against Sharps, except if testifying truthfully under oath, pursuant to any lawful court order or subpoena, or otherwise responding to or providing disclosures required by law.

7.Confidentiality.  Dr. Kunik agrees not to disclose any Confidential Information (as defined below) of which Dr. Kunik may have acquired knowledge in the course of or by virtue of Dr. Kunik’s employment with Sharps and (i) which has not been disclosed publicly by Sharps; (ii) which is otherwise not a matter of public knowledge; or (iii) which is a matter of public knowledge but Dr. Kunik knows or has reason to know that such information became a matter of public knowledge through an unauthorized disclosure.  “Confidential Information” shall mean any information related to the Company’s business or projects covered by this Agreement, or any non-public information that relates to the actual or anticipated business or research and development of Sharps, technical data, trade secrets or know-how, including, but not limited to, research, product plans or other information regarding Sharps’ products or services and markets therefore, customer lists and customers pricing, software, developments, inventions, processes, formulas, technology, designs, drawing, engineering, hardware configuration information, marketing, finances or other business information.  Dr. Kunik hereby confirms that Dr. Kunik has delivered to Sharps and retained no copies of any written materials, records and documents (including those that are electronically stored) made by Dr. Kunik or coming into Dr. Kunik’s possession during the course of Dr. Kunik’s employment with Sharps which contain or refer to any such proprietary or confidential information.  Dr. Kunik further confirms that he has deliv ered to Sharps any and all property and equipment of Sharps, including laptop computers, etc., which may have been in Dr. Kunik’s possession.

8.Notice of Subpoena.  Upon service on Dr. Kunik, or anyone acting on Dr. Kunik’s behalf, of any subpoena, order, directive or other legal process requiring Dr. Kunik to

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engage in conduct encompassed within paragraphs  7 of this Agreement, Dr. Kunik or Dr. Kunik’s attorney shall immediately notify Sharps of such service and of the content of any testimony or information to be provided pursuant to such subpoena, order, directive or other legal process, and within two (2) business days send to the undersigned representative of Sharps, via overnight delivery (at Sharps’ expense), a copy of the documents that have been served upon Dr. Kunik.

9.Non Compete.  Dr. Kunik acknowledges and reaffirms the non compete obligations set forth in Article V of his Employment Agreement.  Dr. Kunik agrees to honor all of his obligations under Article V, including but not limited to the restrictions therein prohibiting competing employment for twelve months following the separation of his employment from Sharps.  Dr. Kunik acknowledges that the consideration paid under this Agreement is contingent upon Dr. Kunik’s promise to honor his non compete obligations, and that a breach of these obligations is also a material breach of this Agreement which will allow Sharps to immediately cease and withhold any payments owed under this Agreement.

10.Taxes.  Sharps may deduct or withhold from any compensation or benefits any applicable federal, state or local tax or employment withholdings or deductions resulting from any payments or benefits provided under this Agreement.  In addition, it is Sharps’ intention that all payments or benefits provided under this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), including without limitation the six month delay for payments of deferred compensation to “key employees” upon separation from service pursuant to Section 409A(a)(2)(B)(i) of the C ode (if applicable), and this Agreement shall be interpreted, administered and operated accordingly.  Notwithstanding anything to the contrary herein, Sharps does not guarantee the tax treatment of any payments or benefits under this Agreement, including without limitation under the Code, federal, state, local or foreign tax laws and regulations.

11.Cooperation.  Dr. Kunik agrees he will assist and cooperate with Sharps in connection with the defense or prosecution of any claim that may be made against or by Sharps, or in connection with any ongoing or future investigation or dispute or claim of any kind involving Sharps, including any proceeding before any arbitral, administrative, judicial, legislative, or other body or agency, including testifying in any proceeding to the extent such claims, investigations or proceedings relate to services performed or required to be performed by Dr. Kunik, pertinent knowledge possessed by Dr. Kunik, or any act or omission by Dr. Kuni k.  Dr. Kunik further agrees to perform all acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this paragraph.

12.Successorship.  This Agreement is binding upon Dr. Kunik and Dr. Kunik’s successors, assigns, heirs, executors, administrators and legal representatives.

13.Severability.  If any of the provisions, terms or clauses of this Agreement are declared illegal, unenforceable or ineffective in a legal forum, those provisions, terms and clauses shall be deemed severable, such that all other provisions, terms and clauses of this Agreement shall remain valid and binding upon both parties.

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14.ADEA Waiver.  Without detracting in any respect from any other provision of this Agreement:

a.Dr. Kunik, in consideration of the payment described in paragraph 2 of this Agreement, agrees and acknowledges that this Agreement constitutes a knowing and voluntary waiver of all rights or claims Dr. Kunik has or may have against Sharps  as set forth herein; including, but not limited to, all rights or claims arising under the Age Discrimination in Employment Act of 1967, as amended (“ADEA”), including, but not limited to, all claims of age discrimination in employment and all claims of retaliation in violation of the ADEA.

b.Dr. Kunik understands that, by entering into this Agreement, Dr. Kunik does not waive rights or claims that may arise after the date of Dr. Kunik’s execution of this Agreement, including without limitation any rights or claims that Dr. Kunik may have to secure enforcement of the terms and conditions of this Agreement.

c.Dr. Kunik agrees and acknowledges that the consideration provided to Dr. Kunik under this Agreement is in addition to anything of value to which Dr. Kunik is already entitled.

d.Dr. Kunik acknowledges that he has been informed that he has at least twenty-one (21) days in which to review and consider this Agreement and to consult with an attorney regarding the terms and effect of this Agreement.

15.Revocation.  Dr. Kunik may revoke this Agreement within seven (7) days from the date Dr. Kunik signs this Agreement, in which case this Agreement shall be null and void and of no force or effect on either Sharps or Dr. Kunik.  Any revocation must be in writing and received by Sharps by 5:00 p.m. on or before the seventh (7th) day after this Agreement is executed by Dr. Kunik.  Such revocation must be sent to the undersigned at Sharps.

16.Applicable Law.  This Agreement may not be changed or altered, except by a writing signed by Sharps and Dr. Kunik.  This Agreement is entered into in the State of Texas, and the laws of the State of Texas shall apply to any dispute concerning the Agreement.

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DR. KUNIK EXPRESSLY ACKNOWLEDGES, REPRESENTS AND WARRANTS THAT HE HAS CAREFULLY READ THIS AGREEMENT; THAT DR. KUNIK FULLY UNDERSTAND THE TERMS, CONDITIONS AND SIGNIFICANCE OF THIS AGREEMENT; THAT DR. KUNIK HAS HAD A FULL OPPORTUNITY TO REVIEW THIS AGREEMENT WITH AN ATTORNEY; THAT DR. KUNIK UNDERSTANDS THIS AGREEMENT HAS BINDING LEGAL EFFECT; AND THAT DR. KUNIK HAS EXECUTED THIS AGREEMENT FREELY, KNOWINGLY AND VOLUNTARILY.

Date: _____________________                                    _____________________________________

DR. BURTON J. KUNIK

SHARPS COMPLIANCE, INC.

Date: __________________                                           By: _____________________________________

Name: David P. Tusa

Title:   President

Dr. Kunik must sign and return this Agreement to David P. Tusa no later than 5:00 p.m. on the 21st day following receipt of this document or irrevocably lose the opportunity to receive the consideration described herein.  Dr. Kunik may sign this document any time prior to the expiration of this 21-day period.

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EX-10

Exhibit 10.2

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (“Agreement”) is made and entered into this the 7th day of September, 2010, by and between Sharps Compliance, Inc., a Texas corporation (“Sharps” or “Company”), having its office and principle place of business at 9220 Kirby Drive, Suite 500, Houston, Texas 77054, and Dr. Burton J. Kunik (“Dr. Kunik” or “Consultant”), residing at 5314 Val Verde, Houston, Texas 77056.

WITNESSETH

WHEREAS, Sharps desires to engage Dr. Kunik to perform certain consulting services, as hereinafter specified; and

WHEREAS, Dr. Kunik is willing to enter into this Agreement with respect to such services upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing, of the mutual promises and agreements herein contained, and of other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is hereby agreed as follows:

ARTICLE I

SCOPE

1.1During the Term (as defined below) of this Agreement, Dr. Kunik shall furnish professional consulting services and advice to Sharps, as Sharps requires, relating to projects identified on Exhibit A hereto (“Projects”).  The Projects identified on Exhibit A can be updated on an ongoing basis, as needed, by the parties hereto.

1.2It is understood and agreed that professional consulting services will be performed exclusively by Dr. Kunik, on a timely basis and consistent with industry-established and industry-accepted standards.

1.3Dr. Kunik is an independent contractor and is not an employee or agent of Sharps; thus, Dr. Kunik shall not be subject to the provisions of Sharps Employee Relations Policy or entitled or eligible to participate in any pension, stock, bonus, insurance, profit sharing or similar plans, benefits or privileges given or extended by Sharps to its employees.  Dr. Kunik shall have no power or right to enter into contracts or commitments on behalf of the Company; Dr. Kunik agrees not to make any representation to any person to the contrary.

ARTICLE II

TERM

2.1This Agreement shall commence October 1, 2010 (the “Effective Date”), and shall continue for a period of twelve (12) months (the “Term”), at which point the Agreement shall automatically terminate, absent the occurrence of an intentional act taken by the parties hereto, as defined in Section 2.2.

2.2The Term may be extended for such additional periods of time as may be mutually agreed upon in writing by the parties hereto and as an addendum to this Agreement.

2.3Notwithstanding the provisions of Section 2.1, this Agreement shall terminate as follows:

(a)As per Section 2.1 above; or

(b)Upon the death or disability of Dr. Kunik.

2.4In the event of termination, all rights and duties of Sharps and Dr. Kunik hereunder shall cease, except that:

(a)Sharps shall pay: (i) any consideration that is due and owing under this Agreement for services completed and accepted by Sharps through the effective date of such termination; and, (ii) all related expenses, if any, submitted in accordance with Section 3.3; and,

(b)The obligations described in Article VI of this Agreement shall survive the termination of this Agreement.

ARTICLE III

CONSIDERATION

3.1Fee.  In consideration for the services to be rendered by Dr. Kunik, and the other covenants and agreements contained herein, Sharps shall pay Dr. Kunik ten thousand dollars ($10,000.00) per month (in arrears).  Dr. Kunik shall issue a written invoice to Sharps each month detailing the services performed the prior month.  Sharps shall pay said invoice within fourteen (14) business days of receipt.  Dr. Kunik shall consult with Sharps regarding the services to be provided hereunder, which shall be provided as requested by Sharps and consistent with the categories identified on Exhibit A.

3.2Car Allowance.  Sharps shall provide to Dr. Kunik, during the Term of this Agreement, at the sole cost of Sharps, an automobile vehicle for Dr. Kunik’s use that is acceptable to Dr. Kunik and reasonable to Sharps, as well as insurance to cover such vehicle at limits and deductions mutually acceptable to Dr. Kunik and Sharps.  Additionally, Sharps will reimburse Dr. Kunik for all reasonable service and repair costs incurred during the Term of this Agreement.

3.3Expenses.  Sharps agrees that Dr. Kunik shall be entitled to reimbursement of business-related expenses reasonably incurred by Dr. Kunik in the course of providing services requested by Sharps hereunder; provided, however, that payment of such reimbursement shall be made only against proper receipts or other documentary evidence of such expenses and provided that such expenses are consistent with the Sharps’ general policies on business expenses.  Expenses, individually and in the aggregate, exceeding $500.00 must be approved by Sharps in writing prior to Dr. Kunik incurring such expense.

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3.4Taxes.  Dr. Kunik will be liable for all taxes imposed on him by any division of state or federal government.  Accordingly, Sharps will not withhold from Dr. Kunik’s compensation any monies for payment of taxes, including income taxes or social security taxes.  Dr. Kunik agrees to defend, hold harmless and indemnify Sharps from and against the payment of any taxes on account of Dr. Kunik’s performance under this Agreement.

ARTICLE IV

DRAWING – RECORDS AND OTHER DATA

4.1All drawings, designs, specifications, data, and other memoranda of recorded value prepared by, or otherwise under the control of, Dr. Kunik in connection with the work performed hereunder, whether created before or after the Effective Date, shall be and remain the property of Sharps.  Sharps shall have the right to use such drawings, designs, specifications, and memoranda in any manner, without any claim on the part of the Dr. Kunik for additional compensation.

ARTICLE V

PATENTS

5.1Whenever any invention, discovery, innovation or other development, whether or not patentable, is made or conceived by Dr. Kunik in the course of any work under this Agreement, Dr. Kunik shall promptly furnish Sharps with complete information thereon and such invention or discovery shall forthwith be assigned to Sharps. Dr. Kunik agrees to execute all documents (including assignments in the form specified by Sharps), furnish all information, and do all things necessary to facilitate the assignment of such interests and the filing and prosecution of applications for patents, at the request and expense of Sharps.

ARTICLE VI

DISCLOSURE OF INFORMATION

6.1Dr. Kunik agrees that Confidential Information (as defined below) regarding Sharps’ business, of which Dr. Kunik may obtain knowledge in the course of or by virtue of its engagement by, and as a result of his relationship with Sharps, constitutes valuable and confidential assets of Sharps’ business and that the unauthorized disclosure of such Confidential Information would be considered detrimental to such business.  For purposes hereof, “Confidential Information” shall mean any information related to the Company’s business or projects covered by this Agreement, or any non-public information that relates to the actual or anticipated business or research and development of Sharps, technical data, trade secrets or know-how, including, but not limited to, research, product plans or other information regarding Sharps’ products or services and markets therefore, customer lists and customers pricing, software, developments, inventions, processes, formulas, technology, designs, drawing, engineering, hardware configuration information, marketing, finances or other business information. Dr. Kunik agrees that during his engagement hereunder and, to the fullest extent permitted by law, and at all times thereafter, Dr. Kunik will maintain, in the strictest secrecy and confidence, all such Confidential Information, of which he may acquire knowledge in the course of or by virtue of his services, including any such information as may result in whole or in part from Dr. Kunik’s work for Sharps and including any such information or data as may be

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obtained by Sharps from others in confidence or subject to restraint against disclosure, and that Dr. Kunik will not directly or indirectly, reveal, report, disclose, publish or transfer any of such Confidential Information to any person, firm or other entity or utilize any of the Confidential Information for any purpose, except in furtherance of Sharps’ business or Dr. Kunik’s engagement under this Agreement, or as otherwise required by law or by a final order from a court of competent jurisdiction.

6.2Dr. Kunik agrees that all lists, books, records, documents, papers, drawings and other Confidential Information relating to the business or work of Sharps and prepared or received by Dr. Kunik in connection with the performance of services under this Agreement, shall not only be considered Confidential Information, but also shall be the sole and exclusive property of Sharps and shall be delivered to Sharps at any time upon its request and, in any event, upon termination of this Agreement.

ARTICLE VII

MISCELLANEOUS

7.1Entire Agreement.  This Agreement constitutes the entire agreement of the parties hereto, and all previous communications between the parties, whether written or oral with reference to the subject matter of this Agreement, are hereby canceled and superseded. No modification of this contract shall be binding upon the parties hereto, or either of them, unless such is in writing and duly signed by the respective parties hereto.

7.2Notices.  Any notice required or desired to be given under this Agreement shall be deemed given if in writing and mailed, faxed or delivered to Sharps at its principal office and to Dr. Kunik at the address set forth above.

7.3Choice of Law.  This Agreement shall be governed by, and enforced according to, the laws of the State of Texas.  The invalidity of any provision shall be automatically reformed to the extent permitted by applicable law and shall not affect the enforceability of the remaining provisions hereof.

7.4Assignments.  The rights and obligations under this Agreement of Sharps and Dr. Kunik may not be assigned, except that Sharps may, at its option, assign one or more of its rights or obligations under this Agreement to any of its subsidiaries or affiliates, or connection with a transfer of all or substantially all of the assets or stock of Sharps or a merger or consolidation of the Company with and into another corporation or other entity.

7.5Counterparts.  This Agreement may be executed in identical counterparts, and by the parties hereto on separate counterparts, and each counterpart, when so executed and delivered, shall constitute an original instrument, and all such separate counterparts shall constitute but one and the same instrument.

7.6Specific Performance.  Dr. Kunik acknowledges that money damages would not be a sufficient remedy for any breach of Article VI of this Agreement, and that Sharps shall be entitled to enforce the provisions of Dr. Kunik’s promises by terminating any compensation then owing to Dr. Kunik under this Agreement and/or specific performance and injunctive relief as remedies for such breach or threatened breach.  Such remedies shall not be deemed the exclusive remedies for a breach of Article VI of th is Agreement, but shall be in addition to all remedies

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available at law or in equity to Sharps, including, without limitation, the recovery of damages from Dr. Kunik and Dr. Kunik’s agents involved in such breach.

7.7Captions.  The section and paragraph headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the day and year first above written.

SHARPS COMPLIANCE, INC.

By:  

Name:  

Title:                                                                           

DR. BURTON J. KUNIK, an individual

By:  

Name:  

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EXHIBIT A

Consultation projects identified at execution of Agreement (list to be updated, in writing, on an ongoing basis):

1.Legislative and regulatory assistance, as needed.

2.Assistance in matters related to medical waste.

3.Assistance with the Company’s Waste Conversion Process™ and PELLA-DRX™.

4.Other projects as mutually agreed by the Company and Consultant.

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EX-99

EXHIBIT 99.1

Sharps Compliance Announces Planned Retirement of Chairman and CEO, Dr. Burton Kunik

President, David P. Tusa Will be Appointed Additional Role of CEO

HOUSTON, Sept. 2, 2010 (GLOBE NEWSWIRE) -- Sharps Compliance Corp. (Nasdaq:SMED) ("Sharps" or the "Company"), a leading full-service provider of cost-effective management solutions for medical waste and unused dispensed medications generated outside the hospital and large healthcare facility setting, today announced that Founder Dr. Burton J. Kunik will retire as Chief Executive Officer effective September 30, 2010. The Board has appointed David P. Tusa as Chief Executive Officer, effective with Dr. Kunik's retirement, in addition to his role as President.

Dr. Kunik also plans to not stand for reelection to the Board of Directors at the Company's Annual Meeting in November. 

Dr. Burton J. Kunik has been Chairman and CEO since he founded the Company in 1994 and has been driving change in the medical waste industry for over 20 years. Speaking on behalf of the Board of Directors, Lead Independent Director, F. Gardner Parker said, "It was Burt's entrepreneurial spirit, drive and innovative thinking that has enabled Sharps Compliance to become the leader in defining the market for the proper management of used sharps and unused medications outside of the hospital setting. He is the industry expert on these issues and as a result has successfully led the Company from its initial focus on the Home Healthcare market to a successful expansion of serving more than 4,000 customers across the United States, including many new markets such as the Government, Professional and Retail sector. Burt built a dynamic, sustainable business model based on innovation and solid execution, has developed a strong management team, and leaves with a strong pipeline of opportunities before us.  Most recently, Burt was the creative impetus in the development and launch of the Company's Waste Conversion Process which we believe has the potential to change the world of medical waste through the PELLA-DRX™ repurposing process. We thank him for his many years of service and dedication to the success of Sharps." Dr. Kunik has agreed to remain with Sharps in a consulting role for a period of one year to support the Company with legislative, regulatory and other matters. 

Dr. Kunik is one of the inventors named in the patent applications for the first of its kind, patent-pending GREEN Waste Conversion Process™ that enables the elimination of medical waste going into landfills by 100%. The process transforms discarded medical waste into a new product called PELLA-DRX™ – a clean, raw material used in the manufacture of industrial resources, vital to everything from highways to high-rise buildings.

Dr. Kunik commented, "It has been a great pleasure working with the many talented people who have each worked tirelessly to make Sharps Compliance what it is today. I am proud of what we have achieved. I am especially proud of the development of PELLA-DRX and our unique waste conversion process. My focus has always been on finding ways to better our environment, and we have built Sharps Compliance with a culture surrounding that ideal. I believe that David, who has proven himself well over the years, will maintain this focus, and I am extremely confident that he and the rest of the management team will take the Company to the next level." 

Commenting on his new role, Mr. Tusa, stated, "I am honored and very excited to take on this challenge. Burt has been a great mentor as I feel he's prepared me well for this role. Our priorities remain unchanged. We will execute on our growth strategy by focusing on the markets that we believe will provide the greatest opportunities for rapid implementation of our solution offerings to prove out what we believe is a $2 billion dollar market opportunity to define and capture."

David Tusa joined Sharps Compliance in February 2003 as Chief Financial Officer after serving as an advisor to the Board of Directors of Sharps from October 2001 to February 2003. After a successful seven years with the Company, David was promoted to President in June 2010.

About Sharps Compliance Corp.

Headquartered in Houston, Texas, Sharps is a leading full-service provider of cost-effective management solutions for medical waste and unused dispensed medications generated outside the hospital and large healthcare facility setting.  Its strategy is to capture a large part of the estimated $2 billion untapped market for used syringes and unused medical waste outside of hospital and large healthcare settings by targeting the major agencies that are interrelated with this medical waste stream; that is the U.S. government, pharmaceutical manufacturers, home healthcare providers, retail pharmacies and clinics, and the professional market comprised of physician, dentists and veterinary practices. As a fully integrated medical waste management company providing customer solutions and services, the Company's solid business model, which provides strong margins and significant operating leverage, combined with its early penetration into emerging markets, uniquely positions it for strong future growth .

The Company's flagship product, the Sharps® Recovery System™ (formerly Sharps Disposal by Mail System®), is a cost-effective and easy-to-use solution to dispose of medical waste such as hypodermic needles, lancets and any other medical device or objects used to puncture or lacerate the skin (referred to as "sharps"). Its other products include the Sharps®MWMS™ (Medical Waste Management System), a comprehensive medical waste and dispensed unused medication solution designed for emergency preparedness programs. Sharps also offers vendor managed inventory programs and Patient Support Programs which incorporate the Company's SharpsTracer™ system.

Its TakeAwayRecovery System™ is designed for individual consumers, retail or mail-order pharmacies, communities and facilities including assisted living, long-term care and correction operations to facilitate the proper disposal of unused dispensed medications. 

More information on the Company and its products can be found on its website at: www.sharpsinc.com

Safe Harbor Statement

The information made available in this press release contains certain forward-looking statements which reflect Sharps Compliance Corp.'s current view of future events and financial performance. Wherever used, the words "estimate", "expect", "plan", "anticipate", "believe", "may" and similar expressions identify forward-looking statements. Any such forward-looking statements are subject to risks and uncertainties and the company's future results of operations could differ materially from historical results or current expectations. Some of these risks include, without limitation, the company's ability to educate its customers, development of public awareness programs to educate the identified consumer, customer preferences, the Company's ability to scale the business and manage its growth, the degree of success the Company has at gaining more large customer contracts, managing regulatory compliance and/or other factors that may be described in the company's annual report on Form 10-K, quarterly reports on Form 10-Q and/or other filings with the Securities and Exchange Commission. Future economic and industry trends that could potentially impact revenues and profitability are difficult to predict. The Company assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results express or implied therein will not be realized.

CONTACT:  Sharps Compliance Corp.
          David P. Tusa, President
          (713) 660-3514
          dtusa@sharpsinc.com

          Kei Advisors LLC
          Investor Relations
          Deborah Pawlowski
          (716) 843-3908
          dpawlowski@keiadvisors.com