SHARPS COMPLIANCE CORP.
RESTRICTED STOCK AWARD AGREEMENT
 
THIS AGREEMENT is made as of this 27th day of October 2008, by and between
Sharps Compliance Corp., a Delaware corporation (the “Company”), and John R.
Grow (“Grow”).
 
The Company, in conjunction with the execution of the Employment Agreement
effective October 27, 2008, hereby grants the following stock award to Grow,
which award shall have the terms and conditions set forth in this Agreement:
 
1.        Award
The Company, effective as of the date of this Agreement, hereby grants to Grow a
restricted stock award of 300,000 unregistered shares (the “Shares”) of common
stock, par value $.01 per share, of the Company (the “Common Stock”), subject to
the terms and conditions set forth herein. This award is not granted under the
Company’s 1993 Stock Plan and the corresponding shares have not been registered
with the Securities and Exchange Commission.
 
2.        Vesting
Subject to the terms and condition of this Agreement, the Shares shall vest as
follows:  50,000 of the Shares shall vest on March 1, 2009 and 12,500 of the
Shares shall vest on the 1st day of each month for twenty (20) months beginning
April 2009, if, and only if, Grow remains an employee of the Company from the
date hereof until each respective vesting date.  Vesting of the Shares shall be
accelerated to an earlier date in the event of a Change in Control of Company
(as defined in the attached Exhibit A), and provided that Grow remains as an
employee of the Company until the effective date of such Change in Control; all
unvested Shares granted under this Agreement shall become immediately vested on
the effective date of the Change in Control;
 
3.        Restriction on Transfer
Until the Shares vest pursuant to Section 2 hereof, none of the Shares may be
sold, assigned, transferred, pledged, hypothecated or otherwise disposed of or
encumbered, and no attempt to transfer the Shares, whether voluntary or
involuntary, by operation of law or otherwise, shall vest the transferee with
any interest or right in or with respect to the Shares.
 
4.        Forfeiture
If Grow ceases to be an employee of the Company prior to the vesting of the
Shares pursuant to Section 2 hereof, Grow’s rights to the unvested portion of
the Shares shall be immediately and irrevocably forfeited.

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5.        Issuance and Custody of Certificate
 
After any Shares vest pursuant to Section 2 hereof, the Company shall cause to
be issued a certificate or certificates evidencing such vested Shares, with such
certificates including an appropriate legend, determined by the Company’s
transfer agent, reflecting the unregistered and restricted nature of such
shares.
 
6.        Distributions and Adjustments
(a)  If all or any portion of the Shares vest subsequent to any change in the
number or character of Shares of Common Stock (through stock dividend,
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase or exchange of Shares
of Common Stock or other securities of the Company, issuance of warrants or
other rights to purchase Shares of Common Stock or other securities of the
Company or other similar corporate transaction or event affecting the Shares
such that an adjustment is determined by the Compensation Committee of the Board
of Directors (the “Committee”) to be appropriate in order to prevent dilution or
enlargement of the interest represented by the Share, Grow shall then receive
upon such vesting the number and type of securities or other consideration which
he would have received if the Shares had vested prior to the event changing the
number or character of outstanding Shares of Common Stock.
 
(b)  Any additional Shares of Common Stock, any other securities of the Company
and any other property (except for cash dividends) distributed with respect to
the Shares prior to the date the Shares vest shall be subject to the same
restrictions, terms and conditions as the Shares.  Any cash dividends payable
with respect to the Shares shall be distributed to Grow at the same time cash
dividends are distributed to shareholders of the Company generally.
 
(c)  Any additional Shares of Common Stock, any securities and any other
property (except for cash dividends) distributed with respect to the Shares
prior to the date such Shares vest shall be promptly deposited with the
Secretary or the custodian designated by the Secretary to be held in custody in
accordance with Section 5(c) hereof.
 
7.        Taxes
(a)  In order to provide the Company with the opportunity to claim the benefit
of any income tax deduction which may be available to it in connection with this
restricted stock award, and in order to comply with all applicable federal or
state tax laws or regulations, the Company may take such action as it deems
appropriate to insure that, if necessary, all applicable federal or state income
and social security taxes are withheld or collected from Grow.
  
(b)  Should Grow elect, in accordance with Section 83(b) of the Internal Revenue
Code of 1986, as amended, to recognize ordinary income in the year of
acquisition of the Shares, the Company may require at the time of such election
an additional payment for withholding tax purposes (or, alternatively, proof
that such withholding taxes have been paid to the Internal Revenue Service)
based on the fair market value of such Shares as of the date of the acquisition
of such Shares by Grow.

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This Agreement shall be governed by and construed under the internal laws of the
State of Delaware, without regard for conflicts of laws principles thereof.
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the day and year first above written.
 
 
Sharps Compliance Corp.
 
 
 
 
By: 
 
 
 
Dr. Burton J. Kunik
  
Its:
Chairman and Chief Executive Officer  
       
Employee
      
By:
    
 
John R. Grow

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Exhibit A
 
(i)          For purposes of this Agreement and this Exhibit A, a "Change in
Control” of the Company shall mean:
 
(a)          a Change in Control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), whether or not the Company is then subject to such reporting
requirement;
 
(b)         the public announcement (which, for purposes of this definition,
shall include, without limitation, a report filed pursuant to Section 13(d) of
the Exchange Act) by the Company or any “person” (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) that such person has become the
“beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of securities of the Company representing 30% or
more of the combined voting power of the Company’s then outstanding securities,
determined in accordance with Rule 13d-3, excluding, however, any securities
acquired directly from the Company (other than an acquisition by virtue of the
exercise of a conversion privilege unless the security being so converted was
itself acquired directly from the Company); however, that for purposes of this
clause the term “person” shall not include the Company, any subsidiary of the
Company or any employee benefit plan of the Company or of any subsidiary of the
Company or any entity holding shares of Common Stock organized, appointed or
established for, or pursuant to the terms of, any such plan;
 
(c)          the Continuing Board of Directors cease to constitute a majority of
the Company’s Board of Directors;
 
(d)         consummation of a reorganization, merger or consolidation of, or a
sale or other disposition of all or substantially all of the assets of, the
Company (a “Business Combination”), in each case, unless, following such
Business Combination, (A) all or substantially all of the persons who were the
beneficial owners of the Company’s outstanding voting securities immediately
prior to such Business Combination beneficially own voting securities of the
corporation resulting from such Business Combination having more than 50% of the
combined voting power of the outstanding voting securities of such resulting
Corporation and (B) at least a majority of the members of the Board of Directors
of the corporation resulting from such Business Combination were
Continuing Directors at the time of the action of the Board of Directors of the
Company approving such Business Combination; or
 
(e)          approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

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(ii)          “Continuing Director” shall mean any person who is a member of the
Board of Directors of the Company, while such person is a member of the Board of
Directors, who is not an Acquiring Person (as defined below) or an Affiliate or
Associate (as defined below) of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, and who (x) was a member
of the Board of Directors on the date of this Agreement as first written above
or (y) subsequently becomes a member of the Board of Directors, if such 
person’s initial nomination for election or initial election to the Board
of Directors is recommended or approved by a majority of the Continuing
Directors.  For purposes of this subparagraph (ii), “Acquiring Person” shall
mean any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) who or which, together with all Affiliates and Associates of such
person, is the “beneficial owner” (as defined in Rule 13d-3 promulgated under
the Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company’s then
outstanding securities, but shall not include the Company, any subsidiary of the
Company or any employee benefit plan of the Company or of any subsidiary of the
Company or any entity holding shares of Common Stock organized, appointed or
established for, or pursuant to the terms of, any such plan; and “Affiliate” and
“Associate” shall have the respective meanings ascribed to such terms in Rule
12b-2 promulgated under the Exchange Act.

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