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)
Commission File No. 001-34269
(Exact Name Of Registrant As Specified In Its Charter)
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(State Or Other Jurisdiction Of Incorporation Or Organization) | (IRS Employer Identification No.) | ||||
(Address Of Principal Executive Offices)
Registrant’s Telephone Number, Including Area Code)
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:
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||
Indicate by check mark whether the registrant is a an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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 Statement and Exhibits. | |||||||||||||
| SIGNATURES | ||||||||||||||
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On April 4, 2022, Sharps Compliance Corp. (the "Company", "Sharps" or "we") announced that it has appointed W. Patrick Mulloy as President & Chief Executive Officer. Mr. Mulloy succeeds David P. Tusa, who resigned from the role effective April 1, 2022, to pursue other endeavors.
Mr. Mulloy has served as a director of the Company since February 2021. Mr. Mulloy has more than 20 years of experience in the senior housing and long-term care industry, having led three successful senior housing companies. Most recently he served as Chief Executive Officer of Elmcroft Senior Living, a provider of assisted and independent living, as well as memory and respite care, with over 80 communities in 18 states, which he led from its founding in 2006 through early 2018. Prior to that role, from 2000 to 2004, Mr. Mulloy served as Chief Executive Officer of Life Trust America and helped manage its eventual sale. Life Trust was a Morgan Stanley Capital Partners portfolio company and was sold in 2004 to a large national, publicly traded provider of senior housing services and a related real estate company. From 1996 through early 2000, he served as President and Chief Executive Officer of Atria Senior Living, Inc., a large, national provider of retirement, assisted living and dementia care services, taking the company public and leading the successful sale of that company to Lazard Freres Real Estate Investments. Prior to 1996, Mr. Mulloy practiced law for nearly 20 years and served as the Secretary of Finance to the Governor of Kentucky from 1992-1994. He holds undergraduate and law degrees from Vanderbilt University and is licensed to practice law in New York and Kentucky.
A copy of the press release issued by the Company is attached hereto as Exhibit 99.1.
Mr. Mulloy executed an employment letter agreement with the Company, pursuant to which he agreed to serve as the President and Chief Executive Officer of the Company effective on April 1, 2022. The agreement provides that Mr. Mulloy will receive an annual base salary of $400,000 (payable at the bi-weekly rate of $15,384.62) and a Sign-On Bonus of $100,000 (payable within thirty (30) calendar days of April 1, 2022). In connection with the appointment and pursuant to the employment letter agreement, Mr. Mulloy was granted a Restricted Stock Award of 20,000 shares of the Company’s common stock under the Sharps Compliance Corp. 2010 Stock Plan as a Sign-On Restricted Stock Award. The Restricted Stock Award is subject to the terms and conditions of the underlying Restricted Stock Award Agreement and vests over four (4) years in substantially equal quarterly installments on the last day of each of the Company’s fiscal quarters that ends after April 1, 2022. As the Restricted Stock Award vests, Mr. Mulloy expects a portion of the shares to be withheld to satisfy tax liabilities. Also, in connection with the appointment and pursuant to the employment letter, Mr. Mulloy was granted an option to purchase 20,000 shares of the Company’s common stock under the Sharps Compliance Corp. 2010 Stock Plan as a Sign-On Stock Option Award. The option has a seven (7) year term and vests over four (4) years in substantially equal quarterly installments on the last day of each of the Company’s fiscal quarters that ends after April 1, 2022. The exercise price of the option is the closing price on April 1, 2022, or $5.74 per share.
The description of the Executive Employment Agreement contained herein is qualified in its entirely by reference to the Executive Employment Agreement, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Mr. Tusa and the Company entered into an agreement dated April 1, 2022, which outlines the terms of Mr. Tusa’s separation (the “Separation and Release Agreement”). Under the Separation and Release Agreement, Mr. Tusa is entitled to: (i) a cash payment of $600,000 (payable on the first regular payday following the Revocation Period) in exchange for cancellation of Mr. Tusa’s current employment agreement dated July 14, 2003, (ii) acceleration of the vesting of all unvested stock options (202,400 shares) held by Mr. Tusa at April 1, 2022, (iii) continuation of medical and dental insurance for up to 18 months under COBRA and (iv) continued lease and insurance payments on a Company automobile currently allotted to Mr. Tusa for 18 months. The Separation and Release Agreement also includes customary confidentiality, non-compete and release provisions.
The description of the Separation and Release Agreement contained herein is qualified in its entirely by reference to the Separation and Release Agreement, a copy of which is attached as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. | ||||
| (a) | Financial Information | ||||
| Not applicable | |||||
| (b) | Pro Forma Financial Information | ||||
| Not applicable | |||||
| (c) | Exhibits | ||||
| Exhibit Description | |||||
| 10.1 Executive Employment Agreement, dated April 1, 2022 | |||||
| 10. 2 Separation and Release Agreement, dated April 1, 2022 | |||||
| 99.1 Press Release, dated April 4, 2022 | |||||
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 hereunto duly authorized.
| Date: April 6, 2022 | SHARPS COMPLIANCE CORP. | ||||
By: /s/ DIANA P. DIAZ | |||||
| Diana P. Diaz | |||||
| Senior Vice President and Chief Accounting Officer | |||||
INDEX TO THE EXHIBITS
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
EXHIBIT 10.1 April 1, 2022 Mr. Pat Mulloy Dear Pat: On behalf of Sharps Compliance Corp. (the “Company”), I am pleased to offer you the position of President and Chief Executive Officer (“CEO”) of the Company. This letter agreement (the “Agreement”) sets forth the terms of your employment as President and CEO and is effective as of April 1, 2022 (the “Start Date”). 1. Position. (a) In your position as President and CEO, you will report to the Board of Directors of the Company (the “Board”). You will also continue to serve on the Board while you are acting as President and CEO. During the Employment Term (defined below) you agree to work primarily out of the Company’s principal executive offices in Houston, Texas, subject to reasonable business travel. (b) Your position as President and CEO is a full-time position. While you render services to the Company as President and CEO, you will not engage in any other employment, consulting or other business activity (whether full-time or part-time) that would create a conflict of interest with the Company; provided, however, that you may continue to serve on any boards of directors or committees thereof on which you served as of the Start Date. By signing this Agreement, you confirm to the Company that you have no contractual commitments or other legal obligations that would prohibit you from performing your duties for the Company. 2. Term. The term of your employment pursuant to this Agreement will commence on and as of the Start Date and will remain in effect for a period of eighteen (18) months from the Start Date (the “Term”). The Term will be renewed automatically for periods of twelve (12) months (each a “Renewal Term”) commencing at the eighteen (18)-month anniversary of the Start Date and on each subsequent anniversary thereafter, unless notice that this Agreement will not be extended is given by either you or the Company not less than sixty (60) days prior to the expiration of the Term (as extended by any Renewal Term). The period during which you serve as an employee of the Company in accordance with and subject to the provisions of this Agreement is referred to in this Agreement as the “Employment Term.” 3. Compensation and Benefits. (a) Salary. You will be paid an annualized base salary of $400,000, less required deductions and tax withholdings. Your salary will be payable in accordance with the Company’s payroll policy. (b) Sign-On Bonus. The Company will pay you a one-time sign-on bonus, in cash, in the lump sum amount of $100,000, less required deductions and tax withholdings (the “Sign-On Bonus”). The Sign-On Bonus will be paid to you within thirty (30) calendar days of the Start Date. If you voluntarily resign from the Company, without the mutual agreement of the parties, before the first anniversary of the Start Date, you will be required to return immediately the gross pre-tax amount of the Sign-On Bonus to the Company. In such case, your signature below authorizes the Company, to the fullest extent permitted by law, to make deductions from any payment you are owed (including your final paycheck) to repay all or a portion of the Sign-On Bonus. You agree that, if any such deductions do not fully repay the Sign-On Bonus that is owed to the Company, you will pay the Company the remaining balance within thirty (30) calendar days of the last day of your employment.
109698501.4 - 2 - (c) Annual Bonus. Beginning with the Company’s 2023 fiscal year and for each fiscal year thereafter during the Employment Term, you will be eligible for an annual performance bonus (the “Annual Bonus”) under the Executive Compensation and Incentive Plan, as such plan may be amended by the Compensation Committee of the Board (the “Compensation Committee”) from time to time, or such other bonus plan that replaces such plan, in such amount and based on the Company’s performance against specific target levels as is determined by the Compensation Committee. (d) Equity. (i) On the Start Date, you will be granted a restricted stock award covering 20,000 shares of the Company’s common stock (the “Sign-On Restricted Stock Award”). The Sign-On Restricted Stock Award will vest over four (4) years in substantially equal quarterly installments on the last day of each of the Company’s fiscal quarters that ends after the Start Date (i.e., with the first quarterly installment vesting on June 30, 2022), subject to your continuing employment with the Company or service as a member of the Board through each vesting date. The Sign-On Restricted Stock Award will be subject to the terms of the Sharps Compliance Corp. 2010 Stock Plan (as amended September 11, 2014, the “Stock Plan”) and the award agreement evidencing the Sign-On Restricted Stock Award. (ii) On the Start Date, you will be granted an option to purchase 20,000 shares of the Company’s common stock at an exercise price per share equal to the closing price of the Company’s common stock on the last trading day immediately preceding the grant date (the “Sign-On Stock Option Award”). The Sign-On Stock Option Award will vest over four (4) years in substantially equal quarterly installments on the last day of each of the Company’s fiscal quarters that ends after the Start Date (i.e., with the first quarterly installment vesting on June 30, 2022), subject to your continuing employment with the Company or service as a member of the Board through each vesting date. The Sign-On Stock Option Award will be subject to the terms of the Stock Plan and the award agreement evidencing the Sign-On Stock Option Award. (iii) Beginning with the Company’s 2023 fiscal year and for each fiscal year thereafter during the Employment Term, you will be eligible to participate in the Stock Plan (or any successor plan). You will receive grants under the Stock Plan (or a successor plan) consistent your position and duties as determined by the Compensation Committee. Any equity awards granted to you will be subject to the terms and conditions set forth in the Stock Plan (or successor plan) and the applicable grant agreement. (iv) The Company agrees that each award agreement evidencing a Company equity award granted to you during the Employment Term (including, for greater clarity, the Sign-On Restricted Stock Award and the Sign-On Stock Option Award) will provide that if (A) your employment with the Company terminates for any reason other than for Cause (as defined below) and (B) in connection with or following such termination of employment you are not nominated for reelection to serve a member of the Board at a time when you are otherwise willing and able to continue as a member of the Board, then you will be deemed to be vested in that portion of such equity award (if any) that would have vested had you continued to serve as an employee or director of the Company for eighteen (18) months following the date on which you ceased to be an employee or director. (e) Benefits. While you are an employee, you will be eligible to participate in the Company’s standard suite of health, welfare and retirement benefits made available to its senior executive officers. 4. Non-Employee Director Compensation. While you are an employee, you will not earn any non-employee director cash retainers, equity grants or other compensation under the Company’s Non-
109698501.4 - 3 - Employee Director Compensation Policy for your services as director, with the exception that the restricted shares granted on a quarterly vesting schedule for the 2022 fiscal year will continue to vest on June 30, 2022, and September 30, 2022, respectively, in each case subject to your continuing as an employee or director through such date. 5. Expenses. The Company will reimburse you for all reasonable and necessary expenses incurred by you in connection with your performance of services as President and CEO on behalf of the Company in accordance with the Company’s expense reimbursement policy. In addition, during the first twelve (12) months of the Employment Term, the Company will provide you with a housing, travel and car allowance in the aggregate amount of $7,500 per month. Such allowance is intended to provide you the means to establish a second residence in the Houston, Texas area near the Company offices and to travel to and from your primary residence during such initial twelve (12)-month transition period. 6. Indemnification. You will be entitled to indemnification for your acts or omissions in your capacity as an employee or officer or director of the Company to the same extent as the Company’s other senior employees and directors in the manner provided by the Company’s bylaws. 7. Termination of Employment. (a) Company’s Right to Terminate Employment for Cause. The Company shall have the right to terminate your employment hereunder at any time for “Cause.” For purposes of this Agreement, “Cause” shall mean: (i) Your material breach of (A) this Agreement, including your breach of any representation, warranty or covenant made under this Agreement; (B) any other written agreement between you and the Company; or (C) any policy, procedure, or code of conduct established by the Company, if such material breach, if curable, is not cured to the reasonable satisfaction of the Company within thirty (30) days after receipt of notice from the Company specifying the particulars of the material breach; (ii) Your commission of an act of gross negligence, willful misconduct, breach of fiduciary duty, insubordination, fraud, theft, or embezzlement; (iii) Your conviction or indictment, or a plea of nolo contendere by you, in connection with any felony or any crime involving moral turpitude; or (iv) Your willful failure or refusal to perform your obligations pursuant to this Agreement if such failure or refusal, if curable, is not cured to the reasonable satisfaction of the Company within thirty (30) days after receipt of notice from the Company specifying the particulars of the failure or refusal. (b) Company’s Right to Terminate for Convenience. The Company will have the right to terminate your employment for convenience at any time and for any reason, or no reason at all, either with or without advance notice. (c) Death or Disability. Upon your death or Disability, your employment with the Company will terminate with no further obligation under this Agreement of either party hereunder. For purposes of this Agreement, a “Disability” will exist if you are unable to perform the essential functions of your position, with or without a reasonable accommodation, due to an illness or physical or mental impairment or other incapacity that continues, or can reasonably be expected to continue, for a period in excess of 90 days, whether or not consecutive. The determination of whether you have incurred a Disability will be made in good faith by the Board.
109698501.4 - 4 - (d) Your Right to Terminate for Convenience. You will have the right to terminate your employment with the Company for any other reason, or no reason at all, upon providing the Company with 90 days’ advance written notice; provided, however, that if you have provided notice to the Company of your termination of employment, the Company may determine, in its sole discretion, that such termination will be effective on any date prior to the effective date of termination provided in such notice (and any such determination will not change the basis for your termination of employment nor be construed or interpreted as a termination of employment pursuant to Section 7(b) above). 8. Conflicts of Interest. You agree that should you become aware of any actual or potential Conflict of Interest involving you, you will immediately notify the Board of such actual or potential Conflict of Interest, in writing. For purposes of this Agreement, a “Conflict of Interest” will exist when you engage in, or plan to engage in, any activities, associations, or interests that (a) conflict with your duties, responsibilities, authorities, or obligations for and to the Company, (b) constitute an actual or potential conflict of interest under any Company code or policy, or (c) may otherwise create an appearance of conflict or impropriety. 9. Confidentiality. You acknowledge and agree that, in the course of your employment with the Company and the performance of your duties on behalf of the Company hereunder, you will be provided with, and have access to, valuable Confidential Information (as defined below) of the Company and of third parties who have supplied such information to the Company, as applicable. In consideration of your receipt and access to such Confidential Information and in exchange for other valuable consideration provided hereunder, you agree to comply with this Section 9. (a) You covenant and agree that, except as expressly permitted by this Agreement or by a written directive of the Board, you will not, either during the Employment Term or thereafter (regardless of the reason for any termination of your employment), disclose any Confidential Information to any person or entity and will not use any Confidential Information except as provided below. You acknowledge and agree that you would inevitably use and disclose Confidential Information in violation of this Section 9 if you were to violate any of the covenants set forth in Section 10 below. You will follow all Company policies and protocols regarding the physical security of all documents and other material containing Confidential Information (regardless of the medium on which the Confidential Information is stored). This covenant will apply to all Confidential Information, whether now known by you or discovered during the Employment Term. (b) Notwithstanding Section 9(a), you may make the following disclosures and uses of Confidential Information: (i) disclosures to other employees of the Company who have a need to know the information in connection with the business of the Company; (ii) disclosures to customers and suppliers when, in your reasonable and good faith belief in the proper exercise of your responsibilities hereunder, such disclosure is in the best interests of the Company; (iii) disclosures to a person or entity that has (x) been retained by the Company to provide services to the Company and (y) is obligated to maintain the confidentiality of such information pursuant to a valid confidentiality agreement signed by an authorized representative of the Company; or (iv) disclosures that you are legally compelled to make by subpoena, civil investigative demand, order of a court of competent jurisdiction, or other compulsory legal process, or
109698501.4 - 5 - otherwise by law; provided, however, that, except as otherwise provided herein, you will do the following, to the extent legally permissible and practicable, prior to any such disclosure: (A) provide the Board with immediate written notice of such request for disclosure (and a copy of any applicable subpoena, civil investigative demand, court order, or other legal process) so that the Board may, at its expense, seek a protective order or other appropriate remedy to protect the interests of the Company; (B) consult with the Board on the advisability of taking steps to resist or narrow such disclosure; and (C) cooperate with the Board (at the Company’s reasonable cost and expense) in any attempt it may make to obtain a protective order or other appropriate remedy or assurance that confidential treatment will be afforded the Confidential Information; and in the event such protective order or other remedy is not obtained, you agree (1) to furnish only that portion of the Confidential Information that is required to be furnished, as advised by written opinion of your counsel, if any, and (2) to exercise (at the Company’s reasonable cost and expense) all reasonable efforts to obtain assurance that confidential treatment will be accorded such Confidential Information. (c) Notwithstanding any other provision of this Section 9, this Agreement, or any other agreement or Company policy, nothing will prevent you from sharing any Confidential Information or other information (except any information protected by the Company’s attorney-client privilege or the work product doctrine) with regulators or appropriate governmental agencies, including but not limited to governing taxing authorities or securities regulators, whether in response to a subpoena or other legal process or otherwise, without notice to the Company. (d) Upon the expiration of the Employment Term, or at any other time upon request of the Company, you will surrender and deliver to the Company all documents (including but not limited to all electronically stored information) and other materials of any type or nature containing Confidential Information in your possession, custody, or control, and you will not retain any copies of such documents or other materials. (e) For purposes of this Agreement, “Confidential Information” will include all non- public information, designs, ideas, concepts, improvements, product developments, discoveries and inventions, whether patentable or not, and all trade secrets that were created by the Company, or that relate to the Company or any of its businesses, properties, products, or services (including all such information relating to corporate opportunities, potential transactions, business plans, business strategies, risk management strategies, strategies for developing business and market share, research, financial and sales data, financial strategies, pricing terms, evaluations, opinions, interpretations, acquisition prospects, the identity of actual or potential customers or their preferences or requirements, the identity of key contacts within customers’ or potential customers’ organizations or within the organization of acquisition prospects, or marketing and merchandising techniques, prospective names and marks). Moreover, all documents, videotapes, digital media, written presentations, brochures, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, e-mail, voice mail, electronic databases (including any cloud-based databases or storage), maps, drawings, architectural renditions, models, and all other writings or materials of any type or nature including or embodying any of such information, ideas, concepts, improvements, discoveries, inventions, or other similar or dissimilar forms of expression are and will be the sole and exclusive property of the Company and constitute Confidential Information pursuant to this Agreement. For purposes of this Agreement, Confidential Information will not include any information that (i) is or becomes generally available to the public other than as a result, in whole or in part, of any disclosure or wrongful act by you; (ii) was available to you before its disclosure by
109698501.4 - 6 - the Company; or (iii) becomes available to you from a source other than the Company, provided that such source is not bound by a confidentiality agreement with the Company. For avoidance of doubt, nothing in this Section 9 will be interpreted in a manner that would violate any law. (f) For purposes of this Section 9, the “Company” includes the Company and its subsidiaries and affiliates. 10. Non-Solicitation. (a) You acknowledge and agree that your services are of a special and unique nature; that the Company will be introducing you to important actual and potential Company clients, customers, investors, service providers, vendors, suppliers, business partners, and other relationships; and that the Company will be entrusting you with the goodwill of the Company and the Company’s Confidential Information. As a precondition to, and in consideration of, the foregoing, which you agree are invaluable to you, you have voluntarily agreed to the covenants set forth in this Section 10. You further agree and acknowledge that the limitations and restrictions set forth herein are reasonable in all respects; are not oppressive; are material and substantial parts of this Agreement; and are intended and necessary to prevent unfair competition and protect the Company’s Confidential Information, goodwill, and substantial and legitimate business interests. (b) You agree that during the period set forth in Section 10(c) below, you will not, without the prior written approval of the Board, directly or indirectly, for yourself or on behalf of or in conjunction with any other person or entity (other than the Company): (i) solicit, canvass, approach, entice, induce, or cause any actual or potential customer, vendor, consultant, supplier, or service provider of the Company, or any member thereof, to (A) cease, reduce, or lessen such person’s or entity’s business or relationship with the Company; (B) refrain from doing any business with the Company; or (C) deal with the Company on less favorable terms or conditions; (ii) solicit, canvass, approach, or do business with any person or entity that was a customer, vendor, consultant, supplier, or service provider of the Company, within the twelve (12) month period prior to such solicitation, canvassing, approach, or other business relationship; (iii) solicit, canvass, approach, entice, induce, or cause any employee, consultant, contractor, or service provider of the Company to terminate his, her or its employment or engagement therewith; or (iv) solicit, canvass, approach, hire, retain, or do business with any individual who was an employee, consultant, contractor, or service provider of the Company within the twelve (12) month period prior to such solicitation, canvassing, approach, hiring, retention, or other business relationship. (c) You agree that the covenants in Section 10(b) will be enforceable during the Employment Term and for a period of twelve (12) months following the termination thereof, regardless of whether you resign or are terminated or the reason for such resignation or termination. (d) For purposes of this Section 10, the term “Company” includes the Company and its subsidiaries and affiliates.
109698501.4 - 7 - 11. Ownership of Intellectual Property. You agree that the Company will own, and you agree to assign and do hereby assign, all right, title and interest (including patent rights, copyrights, trade secret rights, mask work rights, trademark rights, and all other intellectual and industrial property rights of every kind and nature throughout the world) relating to any and all inventions (whether or not patentable), works of authorship, mask works, designs, know-how, ideas, and information authored, created, contributed to, made or conceived or reduced to practice, in whole or in part, by you during, in whole or in part, the Employment Term, which either (a) relate, at the time of conception, reduction to practice, creation, derivation or development, to the Company or any of its businesses, planned businesses, or actual or anticipated research or development, or (b) were developed on any amount of the Company time or with the use of any of the Company’s equipment, supplies, facilities, personnel, resources, or Confidential Information (all of the foregoing collectively referred to herein as “Company Intellectual Property”), and you will promptly disclose all Company Intellectual Property to the Company. All of your works of authorship and associated copyrights created, in whole or in part, during the Employment Term and in the scope, in whole or in part, of your employment will be deemed to be “works made for hire” within the meaning of the Copyright Act. You agree to perform, during and after the Employment Term, all reasonable acts requested by the Company to assist the Company, at the Company’s expense, in obtaining and enforcing the Company’s rights throughout the world in the Company Intellectual Property. Such acts may include, but are not limited to, execution of documents and assistance or cooperation (i) in the filing, prosecution, registration, and memorialization of assignment of any applicable patents, copyrights, mask work, or other applications, (ii) in the enforcement of any applicable patents, copyrights, mask work, moral rights, trade secrets, or other proprietary rights, and (iii) in other legal proceedings related to the Company Intellectual Property. For purposes of this Section 11, the “Company” includes the Company and its subsidiaries and affiliates. 12. Non-Disparagement/Non-Publication. Except as otherwise provided herein, you agree that during your employment with the Company and thereafter (regardless of the reason for any termination of your employment), you will not, whether in private or in public, whether directly or indirectly, make, publish, encourage, ratify, or authorize; or assist or enable any other person or entity in making, authorizing, ratifying, or publishing; any statements that in any way defame, criticize, malign, impugn, or disparage the Company. For purposes of this Section 12, the “Company” includes the Company and its subsidiaries and affiliates. 13. Injunctive Relief. Because of the difficulty of measuring economic losses to the Company in the event of a breach of Section 9, 10, 11, or 12 of this Agreement, and because of the immediate and irreparable damage that such breach would cause, with no other adequate remedy at law, you agree that in the event of a breach or threatened breach of any such provisions, the Company will be entitled to obtain injunctive relief (without the requirement of posting a bond) from a court of competent jurisdiction, in aid of arbitration (as provided in Section 15 below). Such injunctive relief will not be the Company’s exclusive remedy for a breach or threatened breach of these covenants, but instead will be in addition to all other rights and remedies available to the Company at law and in equity. You hereby irrevocably consent to the jurisdiction of the state and federal courts in Texas with respect to any injunctive proceeding; agree that such courts provide an appropriate and convenient venue for such a proceeding; and agree that such dispute will be governed in accordance with Texas law (including federal law as applied in Texas courts), without regard to Texas’s conflict of laws principles. 14. Required Employment Forms. You will be required, as a condition of your employment with the Company, to sign all of the Company’s standard forms applicable to new employees. 15. Arbitration. Any dispute, controversy, or claim arising out of or related to your employment by the Company, or termination of employment, including but not limited to claims arising under or related to this Agreement or any breach of this Agreement, and any alleged violation of federal,
109698501.4 - 8 - state, or local statute, regulation, common law, or public policy, will be submitted to and decided by binding arbitration. Arbitration will be administered exclusively by the American Arbitration Association and will be conducted in Harris County, Texas, before a single arbitrator, consistent with the AAA rules for employment disputes in effect at the time the arbitration is commenced (the “AAA Rules”). You and the Company waive all rights to have your disputes heard or decided by a jury or in a court trial and the right to pursue any class or collective action or representative claims against each other in court, arbitration, or any other proceeding. Any arbitral award determination will be final and binding upon you and the Company. The Company will be responsible for the arbitrator’s fees and arbitration expenses and any other costs unique to the arbitration hearing, except that you will be responsible for paying the initial filing fees as provided by the AAA Rules. You and the Company will each be responsible for your own deposition, witness, expert, and attorneys’ fees and other expenses to the same extent as if the matter were being heard in court. 16. Cooperation/Company Rights. You agree that during the Employment Term and thereafter (regardless of the reason for any termination of your employment), upon request from the Company, you will, without any additional payment or compensation, cooperate with the Company in connection with (a) any existing or future actual or threatened investigation or legal action (including but not limited to any lawsuits, administrative actions, or arbitrations) involving the Company, whether civil or criminal in nature, including in preparing for any trials, depositions, hearings, or other proceedings, and in providing truthful testimony in connection therewith, and (b) the transition of your knowledge, duties, and responsibilities in connection with the termination of your employment. The Company agrees to reimburse you for all of your out-of-pocket travel expenses reasonably incurred in connection with your compliance with your obligations under Section 16(a) and (b), provided that you provide reasonable documentation of same and obtains the Company’s prior approval for incurring such expenses. The Company also will have the right to suspend you with pay, pending investigation, if the Company has reason to believe you have violated the Company’s code of conduct (or similar policy) and/or have been charged with a crime relevant to your duties or responsibilities for the Company. 17. Withholdings; Deductions. The Company may withhold and deduct from any benefits and payments made or to be made pursuant to this Agreement (a) all federal, state, local, and other taxes as may be required pursuant to any law or governmental regulation or ruling and (b) any deductions consented to in writing by you. 18. Entire Agreement and Amendment. This Agreement contains the entire agreement of the parties with respect to the matters covered herein; moreover, this Agreement supersedes all prior and contemporaneous agreements and understandings, oral or written, between you and any of the Company concerning the subject matter hereof. This Agreement may not be amended, nor may any of your rights or obligations as set forth herein be altered, except by a written instrument executed by you, on the one hand, and a duly-authorized officer of the Company acting with the written authorization of the Board, on the other hand. 19. Waiver of Breach. Any waiver of this Agreement must be in writing, and duly executed by the party granting such waiver. No waiver of any breach of any provision of this Agreement will operate or be construed as a waiver of a breach of such provision or any other provision in the future. The failure of either party hereto to take any action by reason of any breach will not deprive such party of the right to take action at any time such breach continues or at any other time. 20. Assignment. This Agreement is personal to you, and neither this Agreement nor any rights or obligations hereunder will be assignable or otherwise transferred by you. The Company may assign this Agreement without your consent to any successor (whether by merger, purchase, or otherwise) to all or substantially all of the equity, assets, or businesses of the Company.
109698501.4 - 9 - 21. Counterparts. This Agreement may be executed in counterparts, each of which when so executed and delivered will be an original, and both of which together will constitute one and the same instrument. Facsimile, PDF, and other true and accurate copies of this Agreement will have the same force and effect as originals hereof. 22. Deemed Resignations. Unless otherwise agreed to in writing by the Company and you prior to the termination of your employment, any termination of your employment will constitute an automatic resignation of you as an officer of the Company and each of the Company’s subsidiaries, as applicable. In addition, if your employment is terminated for Cause, the termination of your employment will constitute an automatic resignation by you as a member of the Board (or similar governing body) of the Company and each of the Company’s subsidiaries, as applicable. If your employment is terminated for any reason other than for Cause or due to your death, you will not be deemed to have resigned your position as a member of the Board (or similar governing body) of the Company solely as a result of such termination of employment. 23. Section 409A. This Agreement is intended to be exempt from the limitations and requirements set forth in Section 409A and will be construed and interpreted in accordance with such intent. If any provision of this Agreement does not satisfy the requirements of Section 409A, then such provision will nevertheless be applied in a manner consistent with those requirements. 24. Effect of Termination. The provisions of Sections 6-25 of this Agreement, and those provisions necessary to interpret and enforce them, will survive any termination of this Agreement and any termination of the employment relationship between you and the Company. 25. Severability. In the event a court of competent jurisdiction determines that any of the provisions of this Agreement are invalid or unenforceable as written, including but not limited to the scope, time, or territorial restrictions set forth in Section 10, above, then such court will have the authority to modify or “blue pencil” such provisions in a manner that effectuates the intent of the parties, as set forth herein, to the maximum extent permissible. This Agreement is severable, and the invalidity or unenforceability of any particular provision will not affect the validity or enforceability of any other provision hereof. [Signature page follows].
We are all delighted to be able to extend you this offer. To indicate your acceptance of the Company’s offer, please sign and date this Agreement in the space provided below and return it to me. Very truly yours, /s/ Sharon Gabrielson Name: Sharon Gabrielson Title: Chair of the Board of Directors ACCEPTED AND AGREED: /s/Pat Mulloy Pat Mulloy
EXHIBIT 10.2 SHARPS COMPLIANCE CORPORATION April 1, 2022 By Hand Delivery Mr. David P. Tusa Chief Executive Officer RE: Separation and Release Agreement Dear David: The purpose of this separation and release agreement (the “Separation Agreement”) is to memorialize the terms and conditions of the termination of your employment with Sharps Compliance Corporation and its subsidiaries and affiliates (collectively, the “Company”) as a result of your voluntary resignation. To ensure that your separation from the Company occurs on mutually acceptable terms, this Agreement, along with a General Release in the form on Exhibit A attached hereto and made a part hereof (the “General Release”), will summarize the terms and conditions surrounding your separation including, without limitation, the compensation and benefits that will be provided to you. Termination Date The effective date of the termination of your employment is April 1, 2022 (“Termination Date”). Resignation as Officer and Director of the Company Your roles as President and Chief Executive Officer of the Company shall cease effective as of the Termination Date. Effective as of the Termination Date, you also hereby resign from all other positions then held by you as an officer or member of any board of directors, and any committee thereto, throughout the Company. You will execute such additional documents as requested by the Company to evidence the foregoing. Accrued Obligations Whether or not you chooses to sign this Agreement, the Company will pay you any (a) accrued but unpaid base salary you earned through the Termination Date, (b) unpaid or unreimbursed expenses incurred in accordance with Company policies and (c) any accrued but unpaid benefits provided under the Company’s employee benefit plans, subject to and in accordance with the terms of those plans, in each case, less applicable withholding and employment taxes, all of which shall be paid to you within thirty (30) days after the Termination Date or such other date as required under the applicable employee benefit plan. For purposes of this Agreement, the amounts described in this section shall be referred to as the “Accrued Obligations.” Separation Benefits In the event that you execute and deliver to the Company this Separation Agreement and the General Release, and you do not revoke them within the time period permitted by law (such period, the “Revocation
Page 2 of 10 Period”), the following shall apply: a. The Company shall pay you severance pay in the total gross amount of six hundred thousand and 00/100 dollars ($600,000) (the “Severance Payment”), less all required withholdings, including federal and state withholding taxes and other deductions the Company is required by law to make from the Severance Payment. The Severance Payment shall be paid on the first regular payday following the Revocation Period. b. Your medical and dental insurance continuation rights under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) will be provided to you in a separate letter. If you (or your eligible dependents) timely and properly elect COBRA continuation coverage, the Company will continue to pay the cost of the COBRA premiums until the earlier of 18 months following the Termination Date, or the termination of your rights under COBRA. c. The Company previously granted you the options to purchase Company common stock set forth on Exhibit B (the “Stock Options”). The Stock Options, to the extent then outstanding and unvested, shall vest and become exercisable on an accelerated basis on the Termination Date. In addition, the unexercised portion of each Stock Option that is outstanding, vested and exercisable on the Termination Date (including the portion of any Stock Option that vests and becomes exercisable as contemplated by this section) shall remain exercisable until the earlier of (i) the date that is 24 months following the Termination Date or (ii) the expiration date of such Stock Option, as set forth in the applicable Stock Option award agreement. Notwithstanding the foregoing, (x) no Stock Options that vest on an accelerated basis pursuant to this Agreement shall be exercisable prior to the expiration of the Revocation Period (y) if you fail to timely execute or revoke this Separation Agreement and the General Release, then no Stock Options shall vest on an accelerated basis pursuant hereto and, in such case, the Stock Option award agreements shall continue to govern the terms of the Stock Options granted pursuant thereto without regard to this Separation Agreement. d. The Company will continue, for 18 months following the Termination Date, to make lease payments and pay the automobile insurance premiums on the Company automobile currently allotted to you for your use. For purposes of this Separation Agreement, the benefits described above in this section shall be referred to as the “Separation Benefits”. You acknowledge and agree that this Separation Agreement shall supersede and replace all benefits, rights and obligations in connection with your employment or service with the Company. Accordingly, you further acknowledge and agree that this Separation Agreement sets forth all compensation and benefits to which you are entitled and shall be paid you in full satisfaction thereof, in connection with your employment or service with the Company. Should you revoke your General Release within the Revocation Period, then you shall forfeit all Separation Benefits, and no Separation Benefits or other consideration will be due to you. Survival of Restrictive Covenants Reference is hereby made to your Employment Agreement with the Company dated July 14, 2003 (as amended, the “Employment Agreement”). You acknowledge and agree that Section 1.5 (Confidential Information) and Section 1.6 (Restrictive Covenant) of the Employment Agreement shall continue and remain in full force and effect and be governed by the terms and conditions set forth therein notwithstanding your separation with the Company. For clarity, you confirm and acknowledge that (a) your confidentiality
Page 3 of 10 obligations under your Employment Agreement shall continue in perpetuity and (b) your non-competition, employee non-solicitation, and customer non-solicitation obligations under your Employment Agreement shall continue for eighteen (18) months following your Termination Date. Release of Claims Against the Company In exchange for and as a condition to receiving the Separation Benefits, except as set forth in the General Release, you shall knowingly and willingly release the Company from any kind of claim you have arising out of or related to your employment and/or the termination of your employment with the Company by executing the General Release on or within twenty-one (21) days after the Termination Date, and agree to be bound by the terms and conditions thereof. Return of Property Within seven (7) calendar days following your Termination Date, you will, to the extent not previously returned or delivered, return to the Company all Company confidential information and all materials and all copies or tangible embodiments of materials involving Company confidential information, and all other Company property, in your custody, possession, or control; provided, however, that you may keep your cellular phone (and associated cellular phone number) at your sole cost and expense, subject to reasonable measures to remove Company information and property from such devices, as determined by the Company’s IT department. The Company, in its sole discretion, may delay any payment otherwise due to you under this Separation Agreement until you have complied with this paragraph; and notwithstanding any such delay, you shall remain bound by your obligations in this Separation Agreement. Mutual Non-Disparagement You agree that, except as permitted or required by applicable law, you will not directly or indirectly: (i) disparage or say or write negative things about the Company, its subsidiaries and affiliates, and their officers, directors, managers, partners, agents, or employees; or (ii) initiate or participate in any discussion or communication that reflects negatively on the Company, its subsidiaries and affiliates and their officers, directors, managers, partners, agents, or employees. The Company agrees that it will not, and the Company shall use its best efforts to cause its executive officers and directors to not, make or publish any statement disparaging you, or in any way adversely affecting or otherwise maligning your reputation. A disparaging or negative statement is any communication, oral or written, which would tend to cause the recipient of the communication to question the business condition, integrity, competence, fairness, or good character of the person or entity to whom the communication relates. The foregoing provision and all other provisions herein do not restrict you or the Company from cooperating with any government investigation or testifying if so required by subpoena or as otherwise required by applicable law. You and the Company hereby represent and agree that neither party shall not now or ever in the future authorize, verbally, in writing, or electronically, any formal public statement that is disparaging, derogatory, or otherwise inflammatory about the other party to any third party, and that each party has not and will not make or solicit any formal public comments, statements or the like that may be considered derogatory or detrimental to the other party’s good name and business reputation. Inventions and Intellectual Property
Page 4 of 10 You hereby assign to the Company your entire right, title and interest in and to all discoveries and improvements, patentable or otherwise, trade secrets and ideas, writings and copyrightable material, which were conceived by you or developed or acquired by you during your employment with the Company and which may pertain directly or indirectly to the business of the Company or any of its subsidiaries or affiliates, and which you hereby agrees was work for hire performed in the scope of your employment. You agree to disclose fully all such developments to the Company upon its request, which disclosure will be made in writing promptly following any such request. You will, upon the Company’s request, execute, acknowledge and deliver to the Company all instruments and do all other acts which are necessary or desirable to enable the Company to file and prosecute applications for, and to acquire, maintain and enforce, all patents, trademarks, and copyrights in all countries. You acknowledge and agree that you hereby are and have been notified by the Company, and understand, that the foregoing provisions of this paragraph do not apply to an invention for which no equipment, supplies, facilities or trade secret information of the Company was used and which was developed entirely on your own time, unless: (i) the invention relates (x) to the business of the Company or (y) to the Company’s actual or demonstrably anticipated research and development, or (ii) the invention results from any work performed by you for the Company. Insider Trading Restrictions You understand that the federal “insider trading” securities laws continue to apply to you notwithstanding any separation of employment from the Company; that the Company’s Insider Trading Policy and federal law prohibit You from trading in Company securities while in possession of material nonpublic information concerning the Company; and the prohibition against such trading continues to apply to you after leaving the Company. Therefore, you agree to abide by the Company’s trading windows even after the Termination Date, until such time as the insider information you possess, if any, becomes public. Cooperation and Assistance For a reasonable period of time following the Termination Date, and upon reasonable notice and at reasonable times, you agree to assist and cooperate with the Company, by telephone or video conference or otherwise, concerning business or legal related matters about which you possess relevant knowledge or information. Such cooperation shall only be provided at the Company’s specific request and will include, but not be limited to, assisting or advising the Company with respect to any business-related matters or any actual or threatened legal action (including testifying in depositions, hearings, and/or trials) about which you possess relevant knowledge or information. In addition, you agree to promptly inform the Company if any person or entity contacts you in an effort to obtain information about the Company. Severability; Entire Agreement; No Oral Modifications; No Waivers If a court of competent jurisdiction determines that any of the provisions of this Separation Agreement and General Release are invalid or legally unenforceable, all other provisions of this Separation Agreement and General Release shall not be affected and are still enforceable. This Separation Agreement and General Release are intended to be a single integrated contract expressing our entire understanding regarding the subjects it addresses. As such, it supersedes all oral and written agreements and discussions that occurred before the time you sign each of them. This Separation Agreement and General Release may be amended or modified only by an agreement in writing signed by you and countersigned by an executive officer of the Company. The failure by the Company or you (i) to declare a breach, or (ii) to otherwise assert rights under this Separation Agreement and General Release, shall not be construed as a waiver of any of rights under this Separation Agreement and General Release. This Separation Agreement and the General Release may be executed and delivered (including by portable document format or other electronic transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when
Page 5 of 10 executed shall be deemed to be an original, but all of which taken together shall constitute one and the same instrument. Acknowledgements and Certifications You acknowledge and certify that: • You have read and you understand all of the terms of this Separation Agreement and the General Release on Exhibit A, and are not relying on any representation or statement, written or oral, not set forth in the Separation Agreement and the General Release; • You are signing the Separation Agreement, and shall sign the General Release, knowingly and voluntarily; • You have been advised to consult with an attorney before signing the Separation Agreement and the General Release; • You have the right to consider the terms of this Separation Agreement and General Release for 21 days; however, you do not have to take all 21 days to consider it, and if you take fewer than 21 days to review this Separation Agreement and General Release, you expressly waive any and all rights to consider this Separation Agreement and General Release for the balance of the 21-day review period; • The General Release includes a release of any claim you might have under the ADEA (the “ADEA Claims”). For seven (7) days after signing the General Release, you have the right to revoke your release of ADEA Claims (the “ADEA Revocation Period”). To revoke your release of any ADEA Claims, you must inform the Company, by delivering a letter expressly providing for revocation, within seven (7) days of having signed the General Release. You should e-mail your written revocation to the attention of the Chairwoman of the Company Board at gabrielsonsr@gmail.com. You should understand that revoking your release of ADEA Claims does not revoke your release of other claims that you have released in the General Release, nor does it affect the validity or remainder of this Separation Agreement and General Release in any way; and • You and the Company agree that any changes that have been made to this Separation Agreement and General Release from the version originally presented to you do not extend the 21-day period you have been given to consider this Separation Agreement and General Release, whether those changes are deemed material or non-material. {Signature Page Follows}
IF YOU SIGN THIS DOCUMENT AND EXHIBIT A ATTACHED HERETO, IT BECOMES A LEGALLY ENFORCEABLE AGREEMENT EFFECTIVE ON THE DATE SIGNED BY THE COMPANY. Dated: April 1, 2022 /s/ David P. Tusa DAVID P. TUSA Dated: April 1, 2022 SHARPS COMPLIANCE CORPORATION By: /s/ Sharon Gabrielson Name: Sharon Gabrielson Title: Chair of the Board
EXHIBIT A – GENERAL RELEASE OF CLAIMS EXHIBIT A GENERAL RELEASE OF CLAIMS In exchange for the Separation Benefits described in my Separation and Release Agreement with Sharps Compliance Corporation (the “Company”), dated April 1, 2022 (the “Separation Agreement”), I, on behalf of myself and all of my heirs, executors, administrators and assigns, hereby fully and forever release and discharge the Company, its subsidiaries and affiliates and their respective directors, managers, officers, employees, agents, successors, predecessors, subsidiaries, parent, affiliates, shareholders, employee benefit plans, and assigns (together called the “Releasees”) from all known and unknown claims and causes of action including, without limitation, any claims or causes of action arising out of or relating in any way to my employment with the Company, including, without limitation, the termination of my employment and any rights and benefits under any agreements entered into by and between the Company and me in connection with my employment with the Company (except as may be set forth in the Separation Agreement). I understand and agree that this General Release of All Claims (“Release”) is a full and complete waiver of all claims including, without limitation, claims of wrongful discharge, constructive discharge, breach of contract, breach of the covenant of good faith and fair dealing, harassment, retaliation, discrimination, violation of public policy, defamation, invasion of privacy, interference with a leave of absence, fraud, estoppel, personal injury, emotional distress, or other common law claims and claims under Title VII of the Civil Rights Act of 1964, the Fair Labor Standards Act, the Equal Pay Act of 1963, the Americans With Disabilities Act, the Civil Rights Act of 1866, the Age Discrimination in Employment Act of 1967 (ADEA), the Older Workers Benefit Protection Act, the Conscientious Employee Protection Act, the Family Medical Leave Act, the Retirement Income Security Act of 1974 (ERISA), or any other federal or state law or regulation relating to employment or employment discrimination. I fully understand and agree that this Release includes all claims, known and unknown, to the greatest extent permitted by applicable law. However, this Release covers only those claims that arose prior to the execution of this Release. Execution of this Release does not bar any claim that arises hereafter, including (without limitation) a claim for breach of this Release. Notwithstanding my release of claims and the non-disparagement and cooperation obligations set forth in the Separation Agreement, I retain the right to file a charge of alleged employment discrimination with the federal Equal Employment Opportunity Commission (EEOC) or a state or local civil rights agency or to participate in the investigation of such charge filed by another person or to initiate or respond to communications with the EEOC or a state or local civil rights agency; however I waive all rights to share in any damages awarded under any class action, EEOC charge, or state civil rights agency complaint or as a result of any federal, state, or local administrative agency action. Nothing in this General Release prohibits or restricts me from filing a charge or complaint with the Securities and Exchange Commission (“SEC”), the Financial Industry Regulatory Authority (“FINRA”), or any other securities regulatory agency or self-regulatory authority (“Government Agencies”). I further understand that this General Release does not limit my ability to communicate with any securities regulatory agency or authority or otherwise participate in any investigation or proceeding that may be conducted by any governmental agency in connection with reporting a possible securities law violation without notice to the Company. This General Release does not limit my right to receive an award for information provided to the SEC staff or any other securities regulatory agency or authority. I also hereby agree that nothing contained in this Release shall constitute or be treated as an admission of liability or wrongdoing by the Releasees or me.
EXHIBIT A – GENERAL RELEASE OF CLAIMS If any provision of this Release is found to be unenforceable, it shall not affect the enforceability of the remaining provisions and the court shall enforce all remaining provisions to the full extent permitted by law. This Release and the Separation Agreement, as well as the agreements and plans referred to therein, constitute the entire agreement between me and Releasees with regard to the subject matter of this Release. They supersede any other agreements, representations or understandings, whether oral or written and whether express or implied, which relate to the subject matter hereof. Notwithstanding the forgoing, I acknowledge and agree Section 1.5 (Confidential Information) and Section 1.6 (Restrictive Covenant) of my Employment Agreement shall remain in full force and effect. This Release may only be modified in a written document signed by me and a duly authorized officer of the Company. I agree that the Company shall have no duty to provide the Separation Benefits described in the Separation Agreement unless and until I have returned to the Company any and all of the Company’s property in my possession or under my control (including, but not limited to, cellular phones; computers; keys; credit cards; access badges; company files or documents, including copies thereof). I hereby acknowledge that I have read and understand this Release and that I sign it voluntarily and without coercion. I further acknowledge that I was given an opportunity to consider and review this Release and to consult with an attorney of my own choosing at my own expense concerning the waivers contained in this Release and that the waivers are knowing, conscious, and with full appreciation that at no time in the future may I pursue any of the rights that I waived in this Release. I understand that I have the right to consult with an attorney before signing this Release. I also understand that, as provided under the Older Workers Benefit Protection Act of 1990, I have twenty- one (21) days after receipt of this Release to review and consider this Release, discuss it with an attorney of my own choosing, and decide to sign it or not sign it. I also understand that I may revoke this Release during a period of seven (7) days after I sign it (the “Revocation Period”) and that this Release will not become effective until the eighth day after I sign it (and then only if I do not revoke it). In order to revoke this Release, within seven (7) days after I sign this Release I must e-mail my written revocation to the attention of the Chairwoman of the Company Board at gabrielsonsr@gmail.com. I understand that if I choose to revoke this Release during the Revocation Period, I will not be entitled to the Consideration and the Release will have no effect. Notwithstanding the above, by signing this Release, I do not release and discharge these “Protected Rights”: (a) any right to vested benefits that I may have under the terms of any profit-sharing or retirement benefit plan administrated by the Company or under any existing equity award agreements in effect with the Company; (b) the right to file any claims that are not permitted to be waived or released under applicable law or regulation, including but not limited to, the right to file claims for workers’ compensation or for unemployment compensation; (c) the right to bring a lawsuit against the Company to enforce the Company’s obligations under this Agreement; (d) indemnification rights that I have against the Company, as provided in the Company’s organizational documents; and (e) any claims arising after the date on which the I sign this Separation Agreement. Nor is this Separation Agreement intended in any way to limit my right or ability to: (i) make any disclosure of information required by law or protected under the whistleblower provisions of any law; (ii) initiate a charge with, provide information to, testify at, participate, or otherwise assist in investigations conducted by a government agency or (iii) respond to any inquiry from any such authority or governmental agencies, including an inquiry about the existence of this Separation Agreement or its underlying facts. This Agreement does not require me to notify the Company of any such communications or inquiry described in this section. I will not, however, seek or accept any award of back pay, front pay, compensatory damages, punitive damages, attorneys’ fees, or reinstatement
EXHIBIT A – GENERAL RELEASE OF CLAIMS in any such charge, civil action, suit, or proceeding. Before signing my name to this Release, I state that: I have read it, I understand it, I know that I am giving up important rights, I am aware of my right to consult an attorney before signing it, and I have signed it knowingly and voluntarily. This Release shall be governed by and construed and enforced in accordance with the internal laws of the State of Texas, without regard to principles of conflict of laws. Dated: April 1, 2022 /s/ David P. Tusa DAVID P. TUSA
EXHIBIT B SCHEDULE OF STOCK OPTIONS 1. Option granted August 28, 2015 covering 9,270 shares of Company common stock at an exercise price of $6.74 per share. 2. Option granted September 28, 2017 covering 50,000 shares of Company common stock at an exercise price of $4.80 per share. 3. Option granted February 13, 2019 covering 400,000 shares of Company common stock at an exercise price of $3.80 per share. 4. Option granted August 24, 2021 covering 102,400 shares of Company common stock at an exercise price of $8.86 per share.
EXHIBIT 99.1
IMMEDIATE RELEASE
Pat Mulloy Appointed Chief Executive Officer of Sharps Compliance; Will Succeed David P. Tusa
HOUSTON, Texas, April 4, 2022 - Sharps Compliance Corp. (NASDAQ: SMED) (“Sharps” or the “Company”), a leading full-service national provider of comprehensive waste management solutions including medical, pharmaceutical and hazardous, today announced that it has appointed W. Patrick Mulloy (“Pat”) as President & Chief Executive Officer. Mr. Mulloy succeeds David P. Tusa, who resigned from the role effective April 1, 2022, to pursue other endeavors.
Pat Mulloy has served as a director of the Company since February 2021. Mr. Mulloy has more than 20 years of experience in the senior housing and long-term care industry, having led three successful senior housing companies. Most recently he served as Chief Executive Officer of Elmcroft Senior Living, a provider of assisted and independent living, as well as memory and respite care, with over 80 communities in 18 states, which he led from its founding in 2006 through early 2018. In 2000, Mr. Mulloy was recruited by Morgan Stanley Capital Partners to lead their venture backed senior housing company, LifeTrust America. In 2004 he was instrumental in the sale and merger of LifeTrust into Five Star Quality Care, Inc., a larger, national, publicly traded provider of senior housing services. From 1996 through early 2000, he served as President and Chief Executive Officer of Atria Senior Living, Inc., a large, national provider of retirement, assisted living and dementia care services. He served as CEO of Atria as both a private and public entity and led the successful sale of that company to Lazard Freres Real Estate Investments. Prior to 1996, Mr. Mulloy practiced law for nearly 20 years and also served as the Secretary of Finance to the Governor of Kentucky. He holds undergraduate and law degrees from Vanderbilt University and is licensed to practice law in New York and Kentucky.
Sharon Gabrielson, Chair of Sharps’ Board of Directors, stated, “With his distinguished career and prior corporate leadership roles in the Long-Term and Senior Care industry, we believe Pat has the experience and knowledge base to accelerate growth and further our leadership position as a provider of comprehensive medical and hazardous waste solutions, particularly as we heighten our efforts to capture a larger share of the long-term care market. He has made significant contribution in his role as a board member, and I’m confident Sharps will benefit from Pat’s many years of leadership experience as a public company senior executive and his specific expertise and perspective related to the senior housing market.
“On behalf of the Board, I’d like to thank David Tusa for his many contributions to the growth and success of our Company during his nearly 20 years with Sharps. David has played an instrumental role in the expansion and diversification of our model to include growing route-based and unused medications disposal offerings in addition to our legacy mail-back solution. We wish him well in his future endeavors,” Ms. Gabrielson concluded.
Pat Mulloy commented, “Sharps has made tremendous progress establishing its leadership role as a provider of comprehensive medical waste solutions to small and medium quantity generators, including long-term care and senior living communities. I look forward to leveraging the Company’s solid reputation for reliability and excellent customer service and its brand recognition in the marketplace to further capitalize on the significant market opportunities
associated with both the management of medical waste and unused medications. Our Company is at an exciting point in its development as we drive our strategy to grow our leadership position in both the $1 billion medical waste market and in the $1 billion unused medication disposal market, with the goal of building shareholder value and becoming a much larger company.”
About Sharps Compliance Corp.
Headquartered in Houston, Texas, Sharps Compliance (NASDAQ: SMED) is a leading business-to-business services provider to the healthcare, long-term care and retail pharmacy markets. Sharps Compliance offers comprehensive solutions for the management of regulated medical waste, hazardous waste and unused medications. For more information, visit: www.sharpsinc.com.
Forward-Looking Statements
The information made available in this news release contains certain forward-looking statements relating to the Company that are based on the beliefs of the Company’s management as well as assumptions made by and information currently available to the Company’s management. When used in this document, the words "may," “position,” "plan," “potential,” “designed,” “continue,” "anticipate," "believe," "expect," "estimate," “project,” and “intend” and words or phrases of similar import, as they relate to the Company or its subsidiaries or Company management, are intended to identify forward-looking statements. Such statements reflect the known and unknown risks, uncertainties and assumptions related to certain factors including, without limitation, competitive factors, general economic conditions, customer relations, relationships with vendors, governmental regulation and supervision, seasonality, distribution networks, product introductions and acceptance, technological change, changes in industry practices, onetime events and other factors described herein including the impact of the coronavirus COVID-19 (“COVID-19”) pandemic on our operations and financial results. Based upon changing conditions, should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. Consequently, no forward-looking statements can be guaranteed. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in the Company’s Quarterly Reports on Form 10-Q, our Annual Report on Form 10-K, and our other filings with the Securities and Exchange Commission. Actual results may vary materially. You are cautioned not to place undue reliance on any forward-looking statements. You should also understand that it is not possible to predict or identify all such factors and as such should not consider the preceding list or the risk factors to be a complete list of all potential risks and uncertainties. The Company does not intend to update these forward-looking statements.
For more information contact: | |||||
Pat Mulloy Sharps Compliance Corp. President and Chief Executive Officer Phone: (713) 660-3514 Email: pmulloy@sharpsinc.com | John Nesbett/Jennifer Belodeau IMS Investor Relations Phone: (203) 972-9200 Email: jnesbett@institutionalms.com | ||||