Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made this 29th day of November,
2004, and effective the 1st day of December, 2004 (the "Effective Date"), by and
between Sharps Compliance Corp., a Delaware corporation, with principal offices
located at 9350 Kirby Drive, Suite 300, Houston, Texas 77054 (hereinafter
referred to as "Employer" or "Company"), and Dr. Burton J. Kunik, a resident of
Harris County, Texas (hereinafter referred to as "Employee").
WITNESSETH:
WHEREAS, the Employee is currently employed as the Employer's Chairman of
the Board, President and Chief Executive Officer;
WHEREAS, the Employee and Employer, previously entered into an Employment
Agreement effective January 1, 2003 (the "2003 Employment Agreement"); and
WHEREAS, the Employer is desirous of having the Employee continue as
Chairman of the Board, President and Chief Executive Officer of the Employer,
and the Employee is desirous of continuing to undertake such responsibilities;
WHEREAS, it is the intent of the Employer and Employee that this Agreement
shall modify and supersede the 2003 Employment Agreement;
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 continue to employ Employee as Chairman of the Board, President and
Chief Executive Officer, and the Employee agrees to serve the Employer in such
capacities or in such other capacities (subject to the Employee's termination
rights under section 4.2) as the Board of Directors of the Employer may direct,
all 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,
acting through its Board of Directors, shall reasonably deem necessary to
discharge Employee's duties in such capacities. The Employee shall not engage in
any other business activity during the Term of Employment (as defined below)
without prior written consent of the Employer, other than the passive management
of Employee's personal investment or activities which would not materially
detract from Employee's ability to perform his duties under this Agreement (such
as Employee's current positions with other companies and other future positions
of a similar nature.)
ARTICLE II
TERM OF EMPLOYMENT
The term of this Employment Agreement will begin on the date hereof and
will continue for three (3) years hereafter (the "Initial Term of Employment")
unless sooner terminated pursuant to Article IV. This Agreement will be
automatically renewed at the end of the Initial Term of Employment and each
successive renewal term thereafter for successive two (2) year terms unless
either party sends written notice of termination to the other party not less
than ninety (90) days prior to the expiration of the then current Term of
Employment (as hereinafter defined). The Initial Term of Employment together
with any renewal terms is referred to herein as the "Term of Employment". The
nonrenewal of the Term of Employment by the Company will be deemed a Termination
by the Employer without Cause (as defined in Section 4.1) and Executive shall be
entitled to all rights thereunder. The nonrenewal of the Term of Employment by
the Executive will also be treated as a Termination by the Employer without
Cause (as defined in Section 4.1), except Executive shall not be entitled to
accelerate vesting of any outstanding stock options, unless such non-renewal is
in conjunction with or within two (2) years of a change in control as defined
herein.
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 minimum base salary (before standard deductions) of $200,000 during the
Term of Employment. Employees' annual base salary shall be subject to review and
adjustment by the Compensation Committee of the Employer (the "Compensation
Committee") and on an annual basis, provided that any downward adjustment shall
be to an amount not less than $200,000 during the Term of Employment. Employees'
annual base salary shall be payable at regular intervals in accordance with the
prevailing practice and policy of the Employer. Any unpaid base salary shall
accrue.
3.2 Incentive Bonus. As additional compensation for services rendered under
this Agreement, the Compensation Committee may, in its sole discretion and
without any obligation to do so, declare that Employee shall be entitled to an
annual incentive bonus (whether payable in cash, stock, stock rights or other
property) as the Compensation Committee shall determine. If any such bonus is
declared, the bonus shall be payable in accordance with the terms prescribed by
the Compensation Committee. Should the Employer change control, the Compensation
Committee may consider a bonus to the Employee as part of a severance package.
3.3 Other Benefits. Employee shall, in addition to the compensation
provided for in Sections 3.1 and 3.2 above, be entitled to the following
additional benefits:
a) Medical, Health and Disability benefits. The Employee shall
be entitled to receive the medical, dental and disability
benefits on the same basis offered to executive employees of
the Company.
b) Other Benefits. The Employee shall be entitled to receive
any other benefits offered to executive employees of the
Company.
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c) Vacation Pay. The Employee shall be entitled to an annual
vacation as determined in accordance with the prevailing
practice and policy of the Employer, but in no event less
than three (3) weeks per calendar year.
d) Holidays. The Employee shall be entitled to holidays in
accordance with the prevailing practice and policy of the
Employer.
e) Reimbursement of Expenses. The Employer shall reimburse the
Employee for all expenses reasonably incurred by the
Employee on behalf of the Employer in accordance with the
prevailing practice and policy of the Employer.
f) Club Membership. The Employer shall pay in full the monthly
dues at the University Club in Houston, Texas and shall
reimburse the Employee for all reasonable charges incurred
at such club relating to entertainment of business guests on
behalf of the Employer. Upon termination of the Agreement
under Section 4.1, 4.2 or 4.6 hereof, such club membership
shall be transferred to the Employee without further
consideration.
g) Car Allowance. The Employer shall provide to the Employee,
during the Term of Employment, at the sole cost of the
Employer, an automotive vehicle for the Employee's use that
is acceptable to the Employee and reasonable to the
Employer, as well as insurance to cover such vehicle at
limits and deductions mutually acceptable to the Employee
and the Employer. Additionally, the Employer will reimburse
Employee for all reasonable service and repair costs
incurred during the term of the Agreement.
3.4 Grant of Stock Option. Employee is eligible to participate in the
Company's long-term incentive and stock option plans. At the signing of this
Agreement, Employee has been previously granted stock options as shown in
Exhibit A. In the event that this Agreement is terminated, other than for
reasons of voluntary termination or termination with cause as defined in Section
4.5 and 4.3, respectively, or in the event the Company experiences a "change of
control" event, as defined in Section 4.6, all non-vested options shall
immediately vest and Employee is entitled to two (2) years from such date to
exercise such options.
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 sixty (60) 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
for a full twelve (12) month period, and (b) any outstanding stock options held
by Employee shall become fully vested and exercisable pursuant to an Agreement
Regarding Vesting of Stock Options, the form of which is attached hereto as
Exhibit A. 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.
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4.2 Voluntary Termination by Employee for Good Reason. Employee may at any
time voluntarily terminate his employment for "good reason" (as defined below)
upon sixty (60) days prior written notice thereof to the Employer. In the event
of such voluntary termination for "good reason", (a) the Employer shall continue
to pay Employee his then effective base salary under Section 3.1 hereof for a
full twelve (12) month period, and (b) any outstanding stock options held by
Employee shall become fully vested and exercisable pursuant to the Agreement
Regarding Vesting of Stock Options, the form of which is attached hereto as
Exhibit B.
For purposes of this Agreement, "good reason" shall mean the occurrence of
any of the following events:
a) Removal from the offices the Employee holds on the date of
this Agreement or a material reduction in Employee's
authority or responsibility, including, without limitation,
involuntary removal from the Board of Directors, but not
including termination of Employee for "cause", as defined
below; or
b) Relocation of the Employer's headquarters greater than fifty
(50) miles from its current location without the approval of
Employee; or
c) An involuntary reduction in the Employee's compensation
below the base salary under Section 3.1 hereof; or
d) The Employer otherwise commits a material breach of this
Agreement.
4.3 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 30
days before the effective date of such termination and by granting Employee at
least 30 days to cure the cause. In the event the employment of Employee is
terminated for "cause", Employee 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 (except as specifically
provided by the terms of an employee benefit plan of the Employer). 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:
a) 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);
b) Willful refusal without proper legal cause to perform, or
gross negligence in performing, Employee's duties and
responsibilities;
c) Material breach of fiduciary duty to the Employer through
the misappropriation of funds or property of the Employer or
its subsidiaries; or
d) 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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4.4 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 six consecutive
or nonconsecutive months in any twelve month period, 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 (except as specifically provided
by the terms of (i) an employee benefit plan of the Employer or (ii) in
connection with any stock options which may be exercised by Employee for sixty
(60) days thereafter.)
4.5 Voluntary Termination by Employee. Employee may terminate this
Agreement at any time upon delivering sixty (60) days written notice of
resignation to the Employer. In the event of such voluntary termination other
than for "good reason" (as defined above), Employee shall be entitled to his
base salary earned pro rata to the date of his resignation, but no base salary
continuation payments or benefits continuation (except as specifically provided
by the terms of (i) an employee benefit plan of the Employer or (ii) in
connection with any stock options which may be exercised by Employee for sixty
(60) days thereafter). On or after the date the Employer receives notice of
Employee's resignation, the Employer may, at its option, pay Employee his base
salary through the effective date of his resignation and terminate his
employment immediately.
4.6 Termination following Change of Control.
a) Notwithstanding anything to the contrary herein, should Employee
at any time within twenty-four (24) months of the occurrence of a
"change of control" (as defined below) cease to be an employee of
the Employer (or its successor), by reason of (i) termination by
the Employer (or its successor) other than for "cause" (following
a change of control, "cause" shall be limited to the 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), or
a material breach of fiduciary duty to the Employer through the
misappropriation of funds or property of the Employer or its
subsidiaries, or (ii) voluntary termination by Employee for "good
reason upon change of control" (as defined below), then in any
such event,
(1) The Employer shall at the election of Employee either
continue to pay Employee his then effective base salary
under Section 3.1 hereof through the expiration of the Term
of Employment or pay the Employee, within 45 days of the
severance of employment described in this Section 4.6, a
lump sum payment equal to (without discounting present
value) his then effective base salary under Section 3.1 for
a full twenty-four (24) month period; and
(2) Certain outstanding stock options held by Employee, if any,
shall become fully vested and exercisable pursuant to the
Agreement Regarding Vesting of Stock Options, the form of
which is attached hereto as Exhibit B.
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b) As used in this Section, voluntary termination by Employee
"for good reason upon change of control" shall mean (i)
removal of Employee from the offices Employee holds on the
date of this Agreement, (ii) a material reduction in
Employee's authority or responsibility, including, without
limitation, involuntary removal from the Board of Directors,
(iii) relocation of the Employer's headquarters greater than
fifty (50) miles from its then current location, (iv) an
involuntary reduction in Employee compensation without the
approval of Employee, or (v) the Employer otherwise commits
a material breach of this Agreement.
c) As used in this Agreement, a "change of control" shall be
deemed to have occurred if (i) any "Person" (as such term is
used in Sections 12(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), is or becomes
a "beneficial owner" (as defined in Rule 12d-3 under the
Exchange Act), directly or indirectly, of securities of the
Employer representing more than forty percent (40%) of the
combined voting power of the Employer's then outstanding
securities, or (ii) at any time during the 24 month period
after a tender offer, merger, consolidation, sale of assets
or contested election, or any combination of such
transactions, at least a majority of the Employer's Board of
Directors shall cease to consist of "continuing directors"
(meaning directors of the Employer who either were directors
prior to such transaction or who subsequently became
directors and whose election, or nomination for election by
the Employer's stockholders, was approved by a vote of a
least two-thirds of the directors then still in office who
were directors prior to such transaction), or (iii) the
stockholders of the Employer approve a merger or
consolidation of the Employer with any other corporation,
other than a merger or consolidation that would result in
the voting securities of the Employer outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) at least 60% of the
total voting power represented by the voting securities of
the Employer or such surviving entity outstanding
immediately after such merger or consolidation, or (iv) the
stockholders of the Employer approve a plan for complete
liquidation of the Employer or an agreement of sale or
disposition by the Employer of all or substantially all of
the Employer's assets.
4.7 Exclusivity of Termination Provisions. The termination provisions of
this Agreement regarding the parties' respective obligations in the event
Employee's employment is terminated, are intended to be exclusive and in lieu of
any other rights or remedies to which Employee or the Employer may otherwise be
entitle by law, in equity or otherwise. It is also agreed that, although the
personnel policies and fringe benefit programs of the Employer may be
unilaterally modified from time to time, the termination provisions of the
Agreement are not subject to modification, whether orally, implied or in
writing, unless any such modification is mutually agreed upon and signed by the
parties.
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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, he 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 significant 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.
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.
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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.
5.6 Remedies. In the event of a breach or threatened breach by the Employee
of Section 5.2 or its provisions, the Employer shall be entitled to a temporary
restraining order and an injunction restraining the Employee from the commission
of such breach. The Employer shall be entitled to suspend any severance payments
to Employee during any period in which Employee is in breach of Section 5.2.
Nothing herein shall be construed as prohibiting the Employer from pursuing any
other remedies available to it for such breach or threatened breach, including
the recovery of money damages.
ARTICLE VI
ARBITRATION
Any controversy of any nature whatsoever, including but not limited to tort
claims or contract disputes, between the parties to this Agreement or between
the Employee, his heirs, executors, administrators, legal representatives,
successors, and assigns and the Employer and its affiliates, arising out of or
related to the Employee's employment with the Employer; any resignation from or
termination of such employment and/or the terms and conditions of this
Agreement, including the implementation, applicability and interpretation
thereof, shall, upon the written request of one party served upon the other, be
submitted to and settled by arbitration in accordance with the provision of the
Federal Arbitration Act, 9 U.S.C. ss.ss.1-15, as amended. Each of the parties to
this Agreement shall appoint one person as an arbitrator to hear and determine
such disputes, and if they should be unable to agree, then the two arbitrators
shall chose a third arbitrator from a panel made up of experienced arbitrators
selected pursuant to the procedures of the American Arbitration Association (the
"AAA") and, once chosen, the third arbitrator's decision shall be final, binding
and conclusive upon the parties to this Agreement. Each party shall be
responsible for the fees and expenses of its arbitrator and the fees and
expenses of the third arbitrator shall be shared equally by the parties. The
terms or the Commercial arbitration rules of AAA shall apply except to the
extent they conflict with the provisions of this paragraph. It is further agreed
than any of the parties hereto may petition the United States District Court for
the Southern District of Texas, Houston Division, for a judgment to be entered
upon any award entered through such arbitration proceedings.
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ARTICLE VII
MISCELLANEOUS
7.1 Complete Agreement. This Agreement constitutes the entire agreement
between the parties and cancels and supersedes all other agreements between the
parties, which may have related to the subject matter contained in this
Agreement.
7.2 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.
7.3 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 Texas.
7.4 Employee's Representation. Employee represents and warrants that he is
free to enter into this Agreement and to perform each of the terms and covenants
of it. Employee represents and warrants that he is not restricted or prohibited,
contractually or otherwise, from entering into and performing this Agreement,
and that his execution and performance of this Agreement is not a violation or
breach of any other agreement between Employee and any other person or entity.
7.5 Employer's Representation. Employer represents and warrants that it is
free to enter into this Agreement and to perform each of the terms and covenants
of it. Employer represents and warrants that it is not restricted or prohibited,
contractually or otherwise, from entering into and performing this Agreement,
and that its execution and performance of this Agreement is not a violation or
breach of any other agreement between Employee and any other person or entity.
The Employer represents and warrants that this Agreement is a legal, valid and
binding agreement of the Employer, enforceable in accordance with its terms.
7.6 Right of Offset. The Employee hereby authorizes the Employer to offset
against and deduct from monies that are due and payable to the Employee
hereunder, any amounts that Employee may owe the Employer.
7.7 Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
7.8 Assignment. The rights and obligations of the parties under this
Agreement shall be binding upon and inure to the benefit of their respective
successors, assigns, executors, administrators and heirs, provided, however,
that neither the Employer nor Employee assign any duties under this Agreement
without the prior written consent of the other.
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7.9 Limitation. This Agreement shall not confer any right or impose any
obligation on the Employer to continue the employment of Employee in any
capacity, or limit the right of the Employer or Employee to terminate Employee's
employment as provided herein.
7.10 Attorney's Fee and Costs. If any action at law or in equity is brought
to enforce or interpret the terms of this Agreement or any obligation owing
thereunder, venue will be in Harris County, Texas and the prevailing party shall
be entitled to reasonable attorney's fees and all costs and expenses of the
suit, including, without limitation, expert and accountant fees, and such other
relief which a court of competent jurisdiction may deem appropriate.
7.11 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:
If to the Employer: Corporate Secretary
Sharps Compliance Corp.
9350 Kirby Drive, Suite 300
Houston, Texas 77054
If to the Employee: Dr. Burton J. Kunik
5314 Val Verde
Houston, Texas 77056
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the day and year indicated above.
APPROVED:
COMPANY: SHARPS COMPLIANCE CORP.
By:_________________________________________
Name:______________________________________
Title: Co-Chairman, Compensation Committee of the
Board of Directors
By:_________________________________________
Name:______________________________________
Title: ____________________________________
EMPLOYEE:
___________________________________________
Dr. Burt Kunik
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EXHIBIT "A"
1. 25,000 stock options issued on September 1, 1999 with an exercise price
of $1.00 per share;
2. 35,000 stock options issued on April 24, 2001 with an exercise price of
$0.51 per share;
3. 45,000 stock options issued on April 26, 2002 with an exercise price of
$1.53 per share; and
4. 250,000 stock options issued on May 20, 2003 with an exercise price of
$0.80 per share.
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EXHIBIT "B"
FORM OF
AGREEMENT REGARDING VESTING TO STOCK OPTIONS
This Agreement is entered into on this 29th day of November 2004, to be
effective December 1, 2004, between Dr. Burt Kunik ("Employee") and Sharps
Compliance Corp., a Delaware corporation (the "Employer").
WHEREAS, Employee has been granted and may hereafter be granted options
under the Sharps Compliance Corp. 1993 Stock Option Plan (as amended from time
to time, the "Option Plan") to acquire shares of common stock, $.01 par value,
of the Employer;
WHEREAS, the Employer and Employee have entered into an Employment
Agreement dated effective December 1, 2004 (the "Employment Agreement");
WHEREAS, as contemplated in the Employment Agreement, the parties desire
that options granted to Employee under the Option Plan become fully exercisable
by Employee upon termination of the Employment Agreement under certain
circumstances;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, notwithstanding any provisions to the contrary
contained in resolutions granting or agreements governing options heretofore or
hereafter grantee to Employee under the Option Plan ("Options"), without cause,
(b) by Employee under 4.2 thereof with "good reason" (as defined therein), then,
in any such event, immediately prior to the effective date of such termination
(even though salary payments and benefits may continue if Employee makes certain
elections), all Options which have not lapsed shall become fully vested and
exercisable (if not already vested and exercisable) by Employee for a period of
twenty-four (24) months thereafter (as contemplated in Section 14 of the Option
Plan). Further, for the purposes of applying the provisions of Section 13 of the
Plan respecting the termination of Options, the Employer hereby consents to any
termination by Employee under Section 4.2 of the Employment Agreement with "good
reason" (as defined therein).
{Signatures on following Page}
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the day and year indicated above.
APPROVED:
COMPANY: SHARPS COMPLIANCE CORP.
By:_________________________________________
Name:______________________________________
Title: Co-Chairman, Compensation Committee of the
Board of Directors
By:_________________________________________
Name:______________________________________
Title: ____________________________________
EMPLOYEE:
___________________________________________
Dr. Burton J. Kunik
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