Document

DEF 14A 1 smed2021proxy.htm DEF 14A Document

United States Securities and Exchange Commission

Washington, D.C. 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant x

Filed by a Party other than the Registrant o

Check the appropriate box:


o			Preliminary Proxy Statement
o			Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x			Definitive Proxy Statement
o			Definitive Additional Materials
o			Soliciting Material Pursuant to section 240.14a-12


SHARPS COMPLIANCE CORP.

(Name of Registrant as Specified In Its Charter)



(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):


x			No fee required.


o			Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1)			Title of each class of securities to which transaction applies: _____________________________________
(2)			Aggregate number of securities to which transaction applies: _____________________________________
(3)			Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined) ________________
(4)			Proposed maximum aggregate value of transaction: ____________________________________________
(5)			Total fee paid: __________________________________________________________________________


o			Fee paid previously with preliminary materials.


o			Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
(1)			Amount Previously Paid: ____________________________________________
(2)			Form, Schedule or Registration Statement No.: ___________________________
(3)			Filing Party: ______________________________________________________

October 6, 2021

Dear Stockholder:

On behalf of the board of directors (the “Board of Directors”), I cordially invite you to attend the 2021 Annual Meeting of Stockholders (the “Annual Meeting”) of Sharps Compliance Corp., a Delaware corporation (the “Company”). The Annual Meeting will be held on Thursday, November 18, 2021 at 10:00 a.m. (central time) in the Boardroom at the Company’s principal executive offices located at 9220 Kirby Drive, Suite 500, Houston, Texas 77054. The formal Notice of the Annual Meeting is set forth in the enclosed materials.

This year, you are being asked to:


			1)			act upon the election of five (5) directors,
			2)			cast a non-binding advisory vote on named executive compensation,
			3)			ratify the selection by the Audit Committee of the Company’s Board of Directors of BDO USA, LLP as the Company’s independent registered public accounting firm for the current fiscal year and
			4)			any other business which may be properly brought before the meeting or any postponement or adjournment thereof.

The Board of Directors recommends that you vote “For” Proposals 1, 2, and 3. These matters are discussed in greater detail in the attached Notice of Annual Meeting of Stockholders and Proxy Statement. The Company's Board of Directors has fixed the close of business on September 27, 2021 as the record date for the meeting.

Your participation and vote are important. Even if you plan to attend the Annual Meeting in person, please complete, sign and date the enclosed proxy card and return it promptly in the enclosed postage-prepaid envelope. Your shares will be voted in accordance with the instructions you give in your proxy. Returning the proxy card will not limit your right to attend or vote at the Annual Meeting. If you attend the Annual Meeting, you may vote in person if you wish, even if you previously returned your proxy card.

Important Notice Regarding the Availability of Proxy Materials for our Annual Meeting to be held on November 18, 2021. The Proxy Statement, Notice of the Annual Meeting and a copy of our Annual Report on Form 10-K for the year ended June 30, 2021 are available at:

https://investor.sharpsinc.com/financial-information/sec-filings

On behalf of the Board of Directors, I would like to express our appreciation for your continued support of our Company. We look forward to seeing you at the Annual Meeting.


Sincerely,

Sharon R. Gabrielson Chair of the Board


TABLE OF CONTENTS

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS			3
PROXY STATEMENT			4
Solicitation and Other Information Related to the Company			4
General and Revocability of Proxies			4
Availability of Information at Company Website, Including Annual Report on Form 10-K			4
Where You Can Find More Information			5
Code of Ethics			5
Voting Securities and Principal Stockholders			6
General			6
Quorum and Vote Required			6
Security Ownership of Management and Certain Beneficial Owners			7
Directors and Executive Officers			8
Board of Directors			10
Election of Directors - Proposal One (1)			10
Board’s Leadership Structure and Role in Risk Oversight			10
Meetings, Committees and Committee Reports			11
Director Compensation			14
Executive Compensation			15
202 1 Compensation Actions Related to Named Executive Officers			15
Role of the Compensation Committee			15
Role of the Compensation Consultant			15
Consideration of Recent Stockholder Advisory Votes on Executive Compensation			15
Compensation Philosophy			15
Elements of Compensation			15
Executive Compensation Tables and Related Information			17
Summary Compensation Table			17
Outstanding Equity Awards as Fiscal Year-End Table			18
Equity Compensation Plan Information			18
Equity Compensation Plan Table			18
Sharps Compliance Corp. 2010 Stock Plan			18
Employment Contracts, Termination of Employment and Change in Control Agreements			20
Non-binding Advisory Vote on Named Executive Compensation – Proposal Two (2)			21
Ratification of Independent Registered Public Accountant – Proposal Three (3)			21
Fee Information			22
Pre-Approval Policies and Procedures			22
Other			22
Section 16(a) Beneficial Ownership Reporting Compli ance			22
Certain Relationships and Related Party Transactions			23
Stockholders’ Proposals for the 202 2 Annual Meeting			23
Communications with the Board of Directors			23
Other Matters			23
Expenses of Solicitation			23


			1)			the election of five (5) directors,

			2)			a non-binding advisory vote on named executive compensation,
			3)			the ratification of the selection by the Audit Committee of the Company’s Board of Directors of BDO USA, LLP as the Company’s independent registered public accounting firm for the current fiscal year and
			4)			any other business which may be properly brought before the meeting or any postponement or adjournment thereof.


YOUR VOTE IS IMPORTANT Please complete, sign and date the enclosed proxy card and return it promptly in the enclosed envelope so that your shares will be represented whether or not you attend the Annual Meeting.


	Common Stock
Name of Beneficial Owner	Amount and Nature of Ownership (1)		Percent of Class Owned Beneficially (2)
Directors:
Sharon R. Gabrielson	55,200		*

Parris H. Holmes	630,297		3.3	%
W. Patrick Mulloy II (3)	6,048		*
David P. Tusa	148,241	(4)	*
Susan N. Vogt	30,133		*
Executive Officers:
Diana P. Diaz	31,033	(4)	*
Gregory C. Davis	14,578	(4)	*

All current executive officers and directors as a group (8 individuals) (5)	938,760		4.8	%
Other:
Pessin Family 366 Madison Avenue, 14th Floor New York, NY 10017	1,515,710	(6)	7.8	%


(1)			Unless otherwise noted in this table or notes relating hereto, each of the persons named in the table has sole voting and sole investment power with respect to the shares reported, subject to community property laws, where applicable.
(2)			The percentages indicated were based on (i) 19,313,388 shares of Common Stock issued and outstanding on the Record Date and (ii) outstanding stock options exercisable within 60 days after the Record Date. A "*" indicates less than 1% ownership.
(3)			Mr. Mulloy became a director of the Company in February 2021.
(4)			Includes shares that the following directors and officers have the right to acquire within 60 days upon the exercise of stock options.


Mr. Tusa						28,719
Ms. Diaz						6,250
Mr. Davis						5,000
Mr. Halligan						15,018
Total						54,987


(5)			Includes the shares of Common Stock beneficially owned by Mr. Dennis Halligan, an executive officer of the Company.
(6)			Based on Schedule 13D/A filed October 23, 2019 with the SEC, Norman Pessin has sole voting and dispositive power with respect to 1,393,651 shares of Common Stock; and Sandra F. Pessin has sole voting and dispositive power with respect to 122,059 shares of Common Stock.


Name	Age	Position
Directors:
Sharon R. Gabrielson (1)(2)(3)	60	Chair of the Board, Chair of Corporate Governance Committee
Parris H. Holmes (1),(2),(3)(4)	77	Director
W. Patrick Mulloy II (2)(3)	68	Director, Chair of Compensation Committee
David P. Tusa	61	Director, Chief Executive Officer and President
Susan N. Vogt (1)(3)(4)	67	Director, Chair of Audit Committee
Executive Officers:
Diana P. Diaz	58	Executive Vice President and Chief Financial Officer
Gregory C. Davis	54	Vice President of Operations
Dennis P. Halligan	47	Vice President of Sales and Marketing


(1)			Member of the Audit Committee
(2)			Member of the Compensation Committee
(3)			Member of the Corporate Governance Committee
(4)			Member of the Acquisition Committee


			Name (Age)			Director Since

			Sharon R. Gabrielson (60)			2019
			Parris H. Holmes (77)			1998
			W. Patrick Mulloy II (68)			2021
			David P. Tusa (61)			2010
			Susan N. Vogt (67)			2019


Name	Fees Earned or Paid in Cash ($)		Restricted Stock Grants ($) (1)		Restricted Stock Grants (#)	Total Compensation ($)

Sharon R. Gabrielson	$	75,000	$	168,750	21,200	$	243,750
John W. Dalton(2)	$	25,000	$	50,769	3,533	$	75,769
Jack A. Holmes(3)	$	75,000	$	140,628	15,846	$	215,628
Parris H. Holmes	$	50,000	$	112,500	14,133	$	162,500
W. Patrick Mulloy II(4)	$	25,000	$	84,370	6,048	$	109,370
Susan N. Vogt	$	50,000	$	112,500	14,133	$	162,500


(1)			Amounts represent the aggregate grant date fair value of stock-based compensation expense computed in accordance with FASB ASC Topic 718 Stock-Based Compensation. The assumptions used to calculate these amounts are included in Note 2 Summary of Significant Accounting Policies in Notes to Consolidated Financial Statements in the Company's most recent Annual Report on Form 10-K.
(2)			Mr. Dalton resigned his board membership in December 2020.
(3)			Mr. Jack Holmes resigned his board membership in May 2021. In consideration of certain post-resignation covenants and agreements and in appreciation of his service, Mr. Holmes received a one-time cash payment of $37,500, the accelerated vesting of 7,067 shares granted to him on October 1, 2020 and an award of 1,713 shares upon his resignation.
(4)			Mr. Mulloy became a member of the board in February 2021.


	Chair of the Board	Board Member
Quarterly Cash Retainer ($)	$18,750	$12,500
Value of Restricted Shares Awarded Annually ($):
Board Membership	$112,500	$112,500
Chair of the Board	$56,250


•			Achievement of a pre-established amount of annual revenue for the period– weighted 50%
•			Achievement of a pre-established amount of annual net income - weighted 25%


•			Discretionary Portion – weighted 25% – approved by the Compensation Committee based on positioning the Company for future growth


Name and Principal Position	Fiscal Year	Salary ($)		Bonus ($) (1)		Stock Option Awards ($)(2)		All Other Comp ($) (5)		Total

David P. Tusa (3)	2021	$	361,507	$	120,000	$	351,784	$	20,731	$	842,515
Chief Executive Officer and President	2020	$	350,000	$	—	$	—	$	21,181	$	371,181
(Principal Executive Officer)
Diana P. Diaz (3)(4)	2021	$	255,753	$	118,750	$	175,892	$	3,909	$	554,304
Executive Vice President and Chief Financial Officer	2020	$	229,808	$	—	$	—	$	3,447	$	233,255
(Principal Financial and Accounting Officer)


Gregory C. Davis (3)	2021	$	206,219	$	48,750	$	87,946	$	10,651	$	353,566
Vice President of Operations	2020	$	195,000	$	—	$	—	$	10,387	$	205,387


(1)			Bonuses are reported for the fiscal year earned even if paid in the following fiscal year.
(2)			As required by SEC rules, amounts in this column represent the aggregate grant date fair value of stock-based compensation expense as required by FASB ASC Topic 718 Stock Based Compensation. The assumptions used to determine the aggregate grant date value can be found in the Company's Form 10-K in Note 2 Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements.
(3)			Effective April 8, 2021, the Compensation Committee approved a base compensation increase for Mr. Tusa, Ms. Diaz and Mr. Davis to $400,000; $275,000 and $243,750, respectively.
(4)			Effective February 14, 2020, the Compensation Committee approved a base compensation increase for Ms. Diaz to $250,000.
(5)			Amount includes the following Company-paid amounts included in all other compensation:


Named Executive Officer	Fiscal Year	Medical- Related Insurance Premiums		401(k) Matching Funds		Vehicle Expense		Total

David P. Tusa:	2021	$	7,851	$	3,321	$	9,559	$	20,731
	2020	$	7,851	$	3,131	$	10,199	$	21,181
Diana P. Diaz:	2021	$	—	$	3,909	$	—	$	3,909
	2020	$	—	$	3,447	$	—	$	3,447


Gregory C. Davis:	2021	$	7,851	$	2,800	$	—	$	10,651
	2020	$	7,851	$	2,536	$	—	$	10,387


Name	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable (1)	Option Exercise Price ($)		Option Expiration Date	Option Grant Date



David P. Tusa	9,270	—	$	6.74	8/28/2022	8/28/2015
	6,640	12,500	$	4.80	9/28/2024	9/28/2017
	309	200,000	$	3.80	2/13/2026	2/13/2019




Diana P. Diaz	—	6,250	$	4.80	9/28/2024	9/28/2017
	—	50,000	$	3.80	2/13/2026	2/13/2019





Gregory C. Davis	—	5,000	$	4.80	9/28/2024	9/28/2017
	—	12,500	$	3.26	11/29/2025	11/29/2018


(1)			Options vest in equal annual installments over the four years after the option grant date. Each option is subject to the condition that the optionee will have remained employed by the Company, or any one or more of its subsidiaries, through such vesting dates, and each option is further subject to the terms and conditions set forth in the 2010 Stock Plan and in the applicable stock option agreement.


(1)			Represents stock options issued under the Sharps Compliance Corp. 2010 Stock Plan.
(2)			Number of securities to be issued and weighted average exercise price include the effect of 14,384 shares of restricted stock issued to the Board of Directors.


	Holding Requirement: Lower of
	Share Value / Base Compensation or Annual Retainer	Number of Shares
Officers:
CEO	4x	88,900
CFO	3x	45,800
Other Officers	2x	27,000
Directors:
Chair	4x	16,700
Other Directors	4x	11,100


	2021		2020
Audit fees	$	300,000	$	275,399
Audit-related fees	7,740		3,286
Tax fees	—		—
All other fees	—		—
	$	307,740	$	278,685

SEC Form DEF 14A filed by Sharps Compliance Corp.