EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is effective this 27 ^th day of October, 2008 (the “Effective Date”), by and between Sharps Compliance Corp, a Delaware corporation, with principal offices located at 9220 Kirby Drive, Suite 500, Houston, Texas 77054 (hereinafter referred to as "Employer"), and John R. Grow (hereinafter referred to as "Employee").

WHEREAS, the Employee is currently a member of the Board of Directors of Employer;

WHEREAS, (i) the Employer is desirous of appointing the Employee as President and Chief Operating Officer with Employee continuing as a member of the Board of Directors of Employer and (ii) the Employee is desirous to undertake such responsibilities;

NOW, THEREFORE, in consideration of the foregoing premises, the mutual agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.1   Duties . During the Term of Employment (as defined below), the Employer agrees to employ Employee as President and Chief Operating Officer and the Employee agrees to serve the Employer in such capacity upon the terms and subject to the conditions set forth in this Agreement.

1.2   Extent of Duties . The Employee shall devote substantially all of his business time, energy and skill to the affairs of the Employer as the Employer working under the direction of the Chief Executive Officer and the Board of Directors of the Company.

2.1   The term of this Employment Agreement will begin on the date hereof and will continue for two (2) years hereafter (the “Initial Term of Employment”). This Agreement may be extended for a one (1) year period at the end of the Initial Term of Employment should both Employer and Employee mutually agree upon such extension and such extension be evidenced in writing at least thirty (30) days in advance of the end of the Initial Term of Employment.

3.1   Annual Base Compensation . As compensation for services rendered under this Agreement, Employee shall be entitled to receive from the Employer an annual base salary (before standard deductions) of $260,000 during the Term of Employment. Employees’ annual base salary shall be payable on a bi-weekly basis and in accordance with the prevailing practice and policy of the Employer.

3.2   Benefits . Employee shall be entitled to participate in the Employer’s group benefit plan as shown on the attached Benefits Plan Summary. Employee will also be entitled to, (i) the use, during the term of Employee’s employment, of a furnished residence (the selection of such being mutually-agreed between Employer and Employee) paid for by the Employer, (ii) two (2) Employer-paid round-trips per month to Employee’s residence during the term of Employee’s employment and (iii) a grant of 300,000 restricted and unregistered shares of Employer common stock under the terms and conditions set forth in the attached Restricted Stock Award Agreement.

Employee recognizes and agrees that he is no longer eligible to participate in the Non-Employee Board of Director Compensation Plan other than any restricted stock awards previously granted to Employee will remain the property of the Employee and will not be subject to forfeiture.

Employee is eligible for bonuses as the sole discretion of the Board of Directors.

4.1   Termination by the Employer Without Cause . Subject to the provisions of this Section 4.1, this Agreement may be terminated by the Employer without cause upon thirty (30) days prior written notice thereof given to Employee. In the event of termination pursuant to this Section 4.1, (a) the Employer shall continue to pay Employee his then effective base salary under Section 3.1 hereof and all benefits under Sections 3.2 hereof for a full three (3) month period, and (b) any unvested and outstanding stock options or restricted stock held by Employee shall become fully vested and exercisable. Payment or performance by the Employer in accordance with this Section shall constitute Employee's full severance pay and the Employer shall have no further obligation to Employee arising out of such termination.

4.2   Termination by the Employer for Cause . The Employer may terminate this Agreement at any time if such termination is for "cause" (as defined below), by delivering to Employee written notice describing the cause of termination thirty (30) days before the effective date of such termination and by granting Employee at least thirty (30) days to cure the cause. In the event the employment of Employee is terminated for "cause", Employee shall be entitled only to (i) the base salary earned pro rata to the date of such termination with no entitlement to any base salary continuation payments or benefits continuation (except as specifically provided by the terms of an employee benefit plan of the Employer) and (ii) stock options and/or restricted stock that has vested through the date of termination for cause. Except as otherwise provided in this Agreement, the determination of whether Employee shall be terminated for "cause" shall be made by the Board of Directors of the Employer, in reasonable exercise of its business judgment, and shall be limited to the occurrence of the following events: