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.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    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.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    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

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (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.