<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)
Filed by registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Cantel Industries, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
Cantel Industries, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
[ ] 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:
- --------------------------------------------------------------------------------
4) Date filed:
<PAGE>
CANTEL INDUSTRIES, INC.
1135 BROAD STREET, SUITE 203
CLIFTON, NEW JERSEY 07013-3346
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of CANTEL INDUSTRIES, INC. (the "Company" or "Cantel"), will be held
at the Harmonie Club, 4 East 60th Street, New York, New York on Thursday,
January 22, 1998 at 9:30 a.m., for the following purposes:
1. To elect three (3) directors to serve a term of three (3) years
and two (2) directors to serve a term of two (2) years. (Proposal 1)
2. To consider and vote upon a proposal to approve a new stock
option plan to be designated the 1997 Employee Stock Option Plan. (Proposal 2)
3. To consider the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending July 31, 1998. (Proposal 3)
4. To transact such other business as may properly be brought before
the Meeting.
Only stockholders of record at the close of business on December 17,
1997 are entitled to notice of, and to vote at, the Meeting or any adjournment
thereof. A copy of the Company's Annual Report to Stockholders for the fiscal
year ended July 31, 1997 is being mailed to stockholders together with the
mailing of this proxy statement and the enclosed proxy.
You are cordially invited to attend the Meeting. If you do not plan
to be present, kindly fill in, date and sign the accompanying proxy exactly as
your name appears on your stock certificates and mail it promptly in the
enclosed return envelope to assure that your shares are represented and your
vote can be recorded. This may save the Company the expense of further proxy
solicitation.
By Order of the Board of Directors
Darwin C. Dornbush
Secretary
December 30, 1997
<PAGE>
CANTEL INDUSTRIES, INC.
1135 Broad Street, Suite 203
Clifton, New Jersey 07013-3346
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of Cantel
Industries, Inc. (the "Company") for use at the Annual Meeting of Stockholders
(the "Meeting") to be held on January 22, 1998 at 9:30 a.m. at The Harmonie
Club, 4 East 60th Street, New York, New York, and at any and all adjournments
thereof. This Proxy Statement and form of proxy are being mailed to
stockholders on or about December 30, 1997.
As of December 17, 1997, the record date fixed for the determination
of stockholders entitled to notice of and to vote at the Meeting, there were
4,166,322 outstanding shares of Common Stock, which is the only outstanding
class of voting securities of the Company. Each outstanding share of Common
Stock is entitled to one vote on each matter to be voted upon.
Properly executed proxies will be voted in accordance with the
instructions indicated in such proxies. If no instructions are indicated, such
proxies will be voted for the election of each of the five management nominees
for election as directors and in favor of the other proposals described herein.
The Board of Directors does not intend to present at the Meeting any
matters other than those set forth in this Proxy Statement, nor does the Board
know of any other matters which may come before the Meeting. However, if any
other matters are properly presented, it is the intention of the persons named
in the enclosed proxy to vote it in accordance with their judgment.
IT IS DESIRABLE THAT AS LARGE A PERCENTAGE AS POSSIBLE OF THE
STOCKHOLDERS' INTERESTS BE REPRESENTED AT THE MEETING. THEREFORE, EVEN IF YOU
INTEND TO BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO SIGN AND RETURN THE
ENCLOSED PROXY TO INSURE THAT YOUR STOCK WILL BE REPRESENTED. ANY PROXY GIVEN
PURSUANT TO THIS SOLICITATION MAY BE REVOKED AT ANY TIME PRIOR TO ITS USE AT THE
MEETING, BY DELIVERY TO THE SECRETARY OF THE COMPANY OF A WRITTEN NOTICE OF
REVOCATION, BY SUBMISSION OF A LATER DATED AND PROPERLY EXECUTED PROXY, OR BY
VOTING IN PERSON AT THE MEETING. ATTENDANCE AT THE MEETING WILL NOT, IN AND OF
ITSELF, CONSTITUTE A REVOCATION OF A PROXY.
Only stockholders of record at the close of business on December 17,
1997 will be entitled to vote at the Meeting or any adjournment or adjournments
thereof.
The Company's by-laws provide that stockholders holding one-third of
the shares of Common Stock entitled to vote shall constitute a quorum at
meetings of the stockholders. Shares represented in person or by proxy as to
any matter will be counted toward the fulfillment of a quorum. The vote of a
plurality of the votes cast in person or by proxy is necessary for the election
of directors. The affirmative vote of a majority of the shares of Common Stock
present in person or by proxy is necessary for the approval of Proposals 2 and
3. Votes at the Annual Meeting will be tabulated by an independent inspector of
election appointed by the Company or the Company's transfer agent.
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
GENERAL
Three directors of the Company are to be elected at the Annual Meeting
to serve a three year term expiring at the 2000 Annual Meeting of Stockholders
and two additional directors are to be elected at the Annual Meeting to serve a
two year term expiring at the 1999 Annual Meeting of Stockholders, all until
their respective successors have been duly elected and qualified. Management
has nominated Richard L. Bloch, Darwin C. Dornbush and Morris W. Offit for
election as directors for the three year term, and James P. Reilly and Robert L.
Barbanell for election as directors for the two year term. Unless authority to
vote for the election of management's nominees is withheld, the enclosed proxy
will be voted for the election of said nominees. Each of the nominees currently
serves as a director of the Company, and has consented to be named a nominee in
the Proxy Statement and to continue serving as a director if elected. While
management has no reason to believe that any of the nominees will not be
available as a candidate, should such situation arise, proxies given to
management will be voted for the election of another person as a director.
NOMINEES FOR DIRECTORS
TERMS EXPIRING AT 2000 DIRECTOR
ANNUAL MEETING OF STOCKHOLDERS AGE SINCE
--- --------
Richard L. Bloch
President of Pinon Farm, Inc. ................... 68 1988
Darwin C. Dornbush
Partner in the law firm of Dornbush Mensch
Mandelstam & Schaeffer, LLP ...................... 67 1963
Morris W. Offit
Chief Executive Officer of OFFITBANK ............. 60 1986
TERMS EXPIRING AT 1999
ANNUAL MEETING OF STOCKHOLDERS
James P. Reilly
President and Chief Executive
Officer of the Company ........................... 57 1989
Robert L. Barbanell
President of Robert L. Barbanell
Associates, Inc. ................................. 67 1994
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<PAGE>
DIRECTORS WHOSE TERMS OF OFFICE CONTINUE
TERMS EXPIRING AT 1998 DIRECTOR
ANNUAL MEETING OF STOCKHOLDERS AGE SINCE
--- --------
Charles M. Diker
Chairman of the Board of the Company and
Non-Managing Principal of Weiss, Peck & Greer .... 63 1985
Alan J. Hirschfield
Vice Chairman of the Board of the Company,
and Chairman and Co-Chief Executive Officer
of Data Broadcasting Corp. ....................... 62 1986
Bruce Slovin
President of McAndrews & Forbes
Holding Company and President of
Revlon Group, Inc. .............................. 61 1986
BUSINESS EXPERIENCE OF DIRECTORS
Mr. Diker has served as Chairman of the Board of the Company since
April 1986. He is a private investor and a non-managing principal of Weiss,
Peck & Greer, an investment management company. Mr. Diker is also a director of
BeautiControl Cosmetics, Inc. (NASDAQ), a manufacturer of cosmetics marketed by
direct sales, International Specialty Products (NYSE), a specialty chemical
company, Data Broadcasting Corp. (NASDAQ), a communication services and
technology company, and Chyron Corporation (NYSE), a supplier of graphics for
the television industry.
Mr. Hirschfield has served as Vice Chairman of the Board of the
Company since January 1988. Since July 1992, he has served as Co-Chairman and
Co-Chief Executive Officer of Data Broadcasting Corp. (NASDAQ), a communication
services and technology company. From October 1990 to July 1992, he served as
Co-Chief Executive Officer of FNN, Inc., the predecessor of Data Broadcasting
Corp. From April 1990 to December 1992, he served as a managing director of
Wertheim Schroder, Inc., an investment banking firm. Mr. Hirschfield is also a
director of Chyron Corporation (NYSE), a supplier of graphics for the television
industry.
Mr. Reilly has served as President and Chief Executive Officer of the
Company since June 1989. Mr. Reilly is a certified public accountant.
Mr. Dornbush has served as Secretary of the Company since July 1990.
He has been a partner in the law firm of Dornbush Mensch Mandelstam & Schaeffer,
LLP, which has been general counsel to the Company for more than the past five
years. Mr. Dornbush is also a director of Benihana, Inc. (NASDAQ), a company
which operates Japanese style restaurants.
Mr. Barbanell has served as President of Robert L. Barbanell
Associates, Inc., a financial consulting company, since July 1994. From
September 1981 to June 1994, Mr. Barbanell was employed in various capacities by
Bankers Trust New York Corporation, most recently as Managing Director of
-3-
<PAGE>
the European Merchant Bank of Bankers Trust International PLC. Mr. Barbanell is
also Chairman of the Board and a director of Marine Drilling Companies, Inc.
(NASDAQ), a drilling contractor, a director of Kaye Group Inc. (NASDAQ), an
insurance brokerage and insurance underwriting company, and a director of Sentry
Technology Corporation (AMEX), a security products company.
Mr. Bloch has served as President of Pinon Farm, Inc., a horse
training and breeding farm, since its inception in 1982. From 1968 to October
1987, Mr. Bloch served as President of the Phoenix Suns Basketball Club, a
member of the National Basketball Association. Mr. Bloch was Chairman of the
Board of Governors of the National Basketball Association from 1985 to June
1987. He is a director of City National Bank of Beverly Hills, California
(NYSE), a bank holding company, and serves as Chairman of the Board of Columbus
Realty Trust (NYSE), a real estate investment trust.
Mr. Offit has served as Chief Executive Officer of OFFITBANK, a
limited purpose trust company chartered by the New York State Banking
Department, since July 1990. Prior thereto, Mr. Offit served as President of
Offit Associates, Inc., an investment counselling firm. Mr. Offit is a Trustee
of Johns Hopkins University where he served as Chairman of the Board from 1990
through 1996, and a former partner of Salomon Brothers, Inc. He serves as a
director of Mercantile Bankshares Corp. (NASDAQ), a bank holding company, and
Hasbro Inc. (AMEX), a toy manufacturer.
Mr. Slovin has served as President and a director of MacAndrews &
Forbes Holdings Inc. and Revlon Group, Inc., privately held industrial holding
companies, since 1985. Mr. Slovin is also a director of Continental Health
Affiliates, Inc. (NASDAQ), a health care services company, The Coleman Company,
Inc. (NYSE), a manufacturer of outdoor recreation products, Meridian Sports
Incorporated (NASDAQ), a watersports company, Infu-Tech, Inc. (NASDAQ), a home
health care company, and M&F Worldwide Corp. (NYSE), a manufacturer of cigars
and licorice extract and flavorings.
COMMITTEES AND MEETINGS
The Company has an Audit Committee of the Board of Directors
consisting of Messrs. Barbanell, Dornbush and Slovin. The primary functions of
the Audit Committee are to review the Company's financial statements, recommend
the appointment of the Company's independent auditors and to review the overall
scope of the audit. The Audit Committee also meets with the Company's financial
management and its independent auditors to satisfy itself of the adequacy of the
Company's internal controls and to review the independent auditors' report. The
Audit Committee held two meetings during fiscal 1997.
The Company has a Compensation Committee of the Board of Directors
consisting of Messrs. Dornbush, Hirschfield and Slovin. The primary functions
of the Compensation Committee are the establishment of compensation policies and
to consider and make recommendations to the Board concerning compensation and
bonuses to the Company's senior management. Although the Compensation Committee
did not hold any formal meetings during fiscal 1997, members of the Committee
had several informal telephonic discussions at which compensation issues were
discussed and approved, including a recommendation to the Board of Directors for
an increase in compensation and the grant of a non-plan stock option to the
Chairman of the Board. Such recommendation was considered and approved by the
Board of Directors.
The Board of Directors of the Company held three meetings during the
fiscal year ended July 31, 1997, exclusive of actions taken by unanimous written
consent. Except for Messrs. Reilly and
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<PAGE>
Bloch, both of whom did not attend one of the three Board meetings, and Mr.
Offit, who did not attend two of the three Board meetings, no incumbent director
attended fewer than 75% of the aggregate of (i) the total number of meetings of
the Board (held during the period for which he has been a director) and (ii) the
total number of meetings held by all committees of the Board on which he served
(during the periods that he served). The Company does not have a nominating
committee.
DIRECTOR COMPENSATION
Directors who are not officers of the Company were paid directors'
fees of $500 per meeting attended, plus expenses. Under the 1991 Directors'
Stock Option Plan, directors who are not officers of the Company are
automatically granted quarterly options to purchase 500 shares of Common Stock,
provided that the director attended any regularly scheduled meeting of the
Board, if any, held during such fiscal year quarter. Mr. Dornbush, who is both
an officer and director of the Company (and who thereby does not receive said
quarterly option grant) is granted a non-plan option to purchase 500 shares of
Common Stock for each such meeting attended by Mr. Dornbush. In addition, under
the 1991 Directors' Stock Option Plan, all directors are automatically granted
annual options to purchase 1,000 shares of Common Stock at the fiscal year end.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends a vote FOR the nominees listed
herein.
PROPOSAL 2
APPROVAL OF THE 1997 EMPLOYEE STOCK OPTION PLAN
The Board of Directors has adopted, subject to stockholder approval,
and recommends the adoption of the proposed 1997 Employee Stock Option Plan
("1997 Employee Plan"), under which options may be granted for an aggregate of
200,000 shares of Common Stock prior to October 17, 2007. All of the Company's
employees are eligible to participate in the 1997 Employee Plan.
The following description of the 1997 Employee Plan is qualified in
its entirety by reference to such Plan, a copy of which is attached to this
Proxy Statement as Exhibit A and is incorporated by reference herein. Attention
is particularly directed to the description therein of the prices, expiration
dates and other material conditions upon which the options may be granted and
exercised.
An aggregate of 200,000 shares of Common Stock is reserved for
issuance or available for grant under the 1997 Employee Plan, which was approved
by the Company's Board of Directors on October 16, 1997. Options granted under
the 1997 Employee Plan are intended to qualify as incentive stock options
("ISOs") within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"). The 1997 Employee Plan is administered in all respects
by the Stock Option Committee. The Stock Option Committee may determine the
employees to whom options are to be granted and the number of shares subject to
each option. Under the terms of the 1997 Employee Plan, all employees of the
Company or subsidiaries of the Company are eligible for option grants. The
option exercise price of options granted under the 1997 Employee Plan is fixed
by the Stock Option Committee but must be no less than 100% of the fair market
value of the shares of Common Stock subject to the
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<PAGE>
option at the time of grant, except that in the case of a 10% Holder, the
exercise price for incentive stock options must be no less than 110% of said
fair market value. Options may be exercised by the payment in full in cash or
by tendering shares of Common Stock having a fair market value, as determined by
the Stock Option Committee, equal to the option exercise price. Options granted
under the 1997 Employee Plan may not be exercised more than ten years after the
date of grant, five years in the case of an incentive stock option granted to a
10% Holder. To date, no options have been granted under the 1997 Employee Plan.
FEDERAL TAX CONSEQUENCES
The principal United States federal income tax consequences of the
issuance and exercise of options, and subsequent stock dispositions, will be as
follows:
The 1997 Employee Plan provides that the aggregate fair market value
(determined at the time of option grant) of stock with respect to which ISOs
become exercisable by the Optionee for the first time in any calendar year under
all of the Company's stock option plans cannot exceed $100,000. ISO tax
treatment is denied by the Code to any options in excess of such dollar limits.
In general, the federal income tax consequences to the Optionee of the
grant and exercise of an ISO and the resale of stock purchased on the exercise
of an ISO are as follows: The granting of an ISO results in no federal income
tax consequences to the Optionee. No income is recognized by the Optionee upon
the exercise of an ISO. However, for purposes of the alternative minimum tax
only, stock acquired pursuant to the exercise of an ISO will be subject to the
rules applicable to non-ISOs. Thus, in general, the amount by which the fair
market value of the option shares at the time of ISO exercise exceeds the option
exercise price (the "Option Spread") will be an item of tax preference for
purposes of the federal alternative minimum tax and thus the Option Spread may
be subject to the alternative minimum tax unless the shares are disposed of in a
non-qualifying disposition in the year of exercise. If the Optionee is subject
to the alternative minimum tax in the year of the option exercise, the shares
purchased upon the exercise of the ISO will generally have a tax basis equal to
their fair market value at the time of ISO exercise only for purposes of
computing gain or loss on a subsequent disposition of the option shares under
the alternative minimum tax. If instead the Optionee is not subject to the
alternative minimum tax in the year of the disposition of his option shares, the
shares purchased upon the exercise of an ISO will have a tax basis (for purposes
of calculating gain or loss on such disposition under the regular tax) equal to
their ISO exercise price. Each Optionee should consult his tax advisor as to
the application of the alternative minimum tax to the exercise of ISOs and the
disposition of shares acquired thereby.
If the shares purchased upon the exercise of an ISO are disposed of by
the Optionee (other than by transfer to his estate, executor, administrator or
heir by reason of his death), neither (a) within the two-year period following
the grant of the option nor (b) within the one-year period following the
acquisition of the shares by the Optionee, then upon such disposition, any
excess of the sale price of the shares over the option exercise price will
constitute capital gain to the Optionee (assuming the shares are a capital asset
in his hands). However, an Optionee must hold the option shares for more than
18 months in order to obtain the lowest available tax rate on capital gain. If
the Optionee sells the shares within such two-year period or one-year period
(other than by transfer to his estate, executor, administrator or heir by reason
of his death), the Optionee will generally recognize ordinary income to the
extent that his
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<PAGE>
tax basis in the shares is exceeded by the lesser of (i) the fair market value
of the shares on the date the option was exercised, and (ii) the amount realized
on the disposition of the shares.
If the Optionee pays the option exercise price by transferring to the
Company shares of its stock, the Optionee will generally not recognize any gain
or loss with respect to the transfer of such shares, and the Optionee will have
a tax basis in the shares acquired equal to the amount of cash plus the adjusted
tax basis of any shares transferred by such Optionee to the Company. (But see
the discussion above relating to the alternative minimum tax.) However, if the
transferred shares were themselves acquired by the Optionee upon the exercise of
an ISO and the transfer of such shares to the Company occurs within the two-year
period or the one-year period referred to above, the Optionee will generally
recognize gain in connection with such transfer to the extent the fair market
value of the transferred shares exceeds the tax basis with respect to such
shares.
In general, the federal income tax consequences to the Company of the
grant and exercise of ISOs under the Plan and the resale of shares purchased on
the exercise of ISO's are as follows: The grant of an ISO results in no federal
income tax consequences to the Company. In any year in which the Optionee
recognizes ordinary income (as a result of a sale or other transfer of the
shares within the two-year period or one-year period referred to above), the
Company is entitled to a corresponding tax deduction assuming such compensation
to the Optionee is reasonable in amount.
Optionees should consult their personal tax advisors with respect to
the specific federal tax effects on them of option grants, exercises and stock
dispositions.
STATE AND LOCAL TAX CONSEQUENCES
State and local income tax consequences may, depending on the
jurisdiction, differ from the federal income tax consequences of the granting
and exercise of an option and any later sale by the Optionee of his option
stock. There may also be, again depending on the jurisdiction, transfer or
other taxes imposed in connection with a disposition, by sale, bequest or
otherwise, of options and option stock. Optionees should consult their personal
tax advisors with respect to the specific state, local and other tax effects on
them of option grants, exercises and stock dispositions.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors is of the opinion that adoption of the 1997
Employee Plan is in the best interests of the Company in that it will aid the
Company in securing and retaining competent management personnel and other
employees by making it possible to offer them an opportunity to acquire stock of
the Company and thereby increase their proprietary interest in the Company's
success. The Company is also of the opinion that affording to the Board of
Directors the right to determine the employees to be granted options and the
number of shares as to which options will be granted, will permit the Board of
Directors to weigh the advantages and disadvantages at any particular time and
take into account special circumstances with respect to attracting or retaining
particular persons.
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<PAGE>
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The firm of Ernst & Young LLP has audited the financial statements of
the Company for more than the past five fiscal years. The Board of Directors
desires to continue the services of Ernst & Young LLP for the current fiscal
year ending July 31, l998. Accordingly, the Board of Directors will recommend
to the Meeting that the stockholders ratify the appointment by the Board of
Directors of the firm of Ernst & Young LLP to audit the financial statements of
the Company for the current fiscal year. Representatives of that firm are
expected to be present at the Meeting, will have the opportunity to make a
statement if they desire to do so and are expected to be available to respond to
appropriate questions.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board recommends that Stockholders vote in favor of the
appointment of Ernst & Young LLP.
-8-
<PAGE>
OWNERSHIP OF SECURITIES
The following table sets forth stock ownership information as of
October 8, 1997 concerning (i) each director and persons nominated to become
directors of Cantel, (ii) each person (including any "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934) who is known by Cantel
to beneficially own more than five (5%) percent of the outstanding shares of
Cantel's Common Stock, (iii) the Chief Executive Officer and the other executive
officers named in the Summary Compensation Table below, and (iv) Cantel's
executive officers and directors as a group:
<TABLE>
<CAPTION>
Amount and
Nature of
Name and Address Beneficial Percentage
of Beneficial Owners Position with Company Ownership (1) of Class
- -------------------- --------------------- ------------- ----------
<S> <C> <C> <C>
Charles M. Diker Chairman of the Board 799,667 (2) 19.0
One New York Plaza and Director
New York, New York
Alan J. Hirschfield Vice Chairman of the Board 219,333 (3) 5.2
P.O. Box 7443 and Director
Jackson, Wyoming
Richard L. Bloch Director 363,500 (4) 8.7
16003 Via de Santa Fe
Rancho Santa Fe, California
James P. Reilly President (CEO) and 220,648 (5) 5.1
1135 Broad Street Director
Clifton, New Jersey
Bruce Slovin Director 157,500 (6) 3.8
Morris W. Offit Director 52,000 (7) 1.2
Darwin C. Dornbush Secretary and Director 18,180 (8) .4
Robert L. Barbanell Director 59,000 (9) 1.4
Edward E. Meltz Vice President of the 45,070 (10) 1.1
Company and CEO and
CFO of Carsen Group Inc.
William J. Vella President and COO of 30,135 (11) .7
Carsen Group Inc.
All officers and directors 1,980,033 (12) 43.4
as a group of 11 persons
</TABLE>
_________________________________________
(1) Unless otherwise noted, Cantel believes that all persons named in the
table have sole voting and investment power with respect to all shares of
Common Stock beneficially owned by them.
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<PAGE>
A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from October 8, 1997 upon the
exercise of options. Each beneficial owner's percentage ownership is
determined by assuming that options that are held by such person (but not
those held by any other person) and which are exercisable within 60 days
from October 8, 1997 have been exercised.
(2) Includes 40,834 shares which Mr. Diker may acquire pursuant to stock
options. Does not include an aggregate of 478,715 shares owned by (i)
Mr. Diker's wife, (ii) certain trusts for the benefit of Mr. Diker's
children, (iii) certain accounts with Weiss, Peck and Greer, an
investment firm of which Mr. Diker is a non-managing principal, over
which accounts Mr. Diker exercises investment discretion, (iv) the
DicoGroup, Inc., a corporation of which Mr. Diker serves as Chairman of
the Board, and (v) a non-profit corporation of which Mr. Diker and his
wife are the principal officers and directors. Mr. Diker disclaims
beneficial ownership as to all of the foregoing shares.
(3) Includes 23,000 shares which Mr. Hirschfield may acquire pursuant to
stock options.
(4) Includes 20,000 shares which Mr. Bloch may acquire pursuant to stock
options.
(5) Includes 194,315 shares which Mr. Reilly may acquire pursuant to stock
options.
(6) Includes 22,500 shares which Mr. Slovin may acquire pursuant to stock
options. Does not include an aggregate of 9,000 shares owned by (i)
certain trusts for the benefit of Mr. Slovin's children and (ii) a
charitable foundation established by Mr. Slovin. Mr Slovin disclaims
beneficial ownership as to all of the foregoing shares.
(7) Includes 20,000 shares which Mr. Offit may acquire pursuant to stock
options.
(8) Includes 9,500 shares which Mr. Dornbush may acquire pursuant to stock
options.
(9) Includes 34,000 shares which Mr. Barbanell may acquire pursuant to stock
options. Does not include 2,500 shares owned by Mr. Barbanell's wife as
to which Mr. Barbanell disclaims beneficial ownership.
(10) Includes 4,375 shares which Mr. Meltz may acquire pursuant to stock
options.
(11) Includes 16,750 shares which Mr. Vella may acquire pursuant to stock
options.
(12) Includes 400,274 shares which may be acquired pursuant to stock options.
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<PAGE>
EXECUTIVE COMPENSATION AND RELATED INFORMATION
REPORT ON EXECUTIVE COMPENSATION BY THE COMPENSATION COMMITTEE OF THE BOARD OF
DIRECTORS AND THE STOCK OPTION COMMITTEE
The Compensation Committee of the Company's Board of Directors (the
"Committee") is responsible for setting and administering the policies which
govern annual executive compensation. The Committee is currently comprised of
three members, all of whom are non-employee directors.
Executive compensation for the fiscal year ended July 31, 1997
consisted of base salary plus an incentive bonus when earned. The policy of the
Committee, in consultation with the Chief Executive Officer, is to provide
compensation to the Chief Executive Officer and the Company's other executive
officers reflecting the contribution of such executives to the Company's growth
in sales and earnings, the implementation of strategic plans consistent with the
Company's long-term objectives, and the enhancement of shareholder value.
Mr. Reilly, the President and Chief Executive Officer of the Company,
served the Company pursuant to a written employment agreement from June 1989
through July 1992 and was compensated pursuant to the express terms of such
agreement. Although the agreement expired in accordance with its terms, the
Compensation Committee has agreed to compensate Mr. Reilly at the same base
salary and bonus formula as was in effect during the last year of the agreement.
Long-term incentive compensation policy consists exclusively of the
award of stock options under the Company's 1991 Employee Stock Option Plan and,
in the case of officers who serve as directors of the Company, non-discretionary
annual option grants of 1,000 shares under the Company's 1991 Directors' Stock
Option Plan.
The Stock Option Committee under the 1991 Employee Stock Option Plan
is responsible for the award of stock options. Two non-employee directors,
Richard L. Bloch and Alan J. Hirschfield, currently serve on the Stock Option
Committee, which administers the granting of options under the 1991 Employee
Stock Option Plan.
COMPENSATION COMMITTEE:
Richard L. Bloch
Darwin C. Dornbush
Alan J. Hirschfield
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
No officer of the Company served on the Company's Compensation
Committee during its last fiscal year. James P. Reilly, the President and Chief
Executive Officer of the Company, however, participated in deliberations
concerning executive compensation, except with respect to the compensation of
the Chairman of the Board and himself.
-11-
<PAGE>
STOCK PERFORMANCE GRAPH
The graph below compares the cumulative total shareholder return on
the Company's Common Stock for the last five fiscal years with the cumulative
total return on the Nasdaq Stock Market/U.S. Index and the Nasdaq Non-Financial
Index over the same period (assuming the investment of $100 in the Company's
Common Stock, the Nasdaq Stock Market/U.S. and the Nasdaq Non-Financial Index on
July 31, 1992, and the reinvestment of all dividends).
Cumulative Total Return
-----------------------------------------
7/92 7/93 7/94 7/95 7/96 7/97
CANTEL INDS INC CNTL 100 150 238 288 341 275
NASDAQ STOCK MARKET (U.S.) INAS 100 122 125 176 191 283
NASDAQ NON-FINANCIAL INNF 100 120 121 174 185 268
-12-
<PAGE>
SUMMARY OF CASH AND CERTAIN
OTHER COMPENSATION
The following table sets forth, for the fiscal years ended July 31,
1997, 1996, and 1995, compensation, including salary, bonuses, stock options and
certain other compensation, paid by the Company to the Chief Executive Officer
and to the other executive officers of the Company who received more than
$100,000 in salary and bonus during fiscal year 1997:
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation (1) Awards (2)
----------------------- ------------
Name and Salary Bonus Options
Principal Position Year ($) ($) (#)
------------------ ---- ------- ----- -------
Charles M. Diker 1997 100,000 0 51,000
Chairman of the Company 1996 83,333 0 1,000
1995 75,000 0 1,000
James P. Reilly 1997 250,000 12,600 1,000
President and Chief 1996 250,000 0 1,000
Executive Officer of 1995 250,000 0 1,000
the Company
Edward E. Meltz(3) 1997 149,230 12,200 3,000
Vice President of the 1996 155,914 0 2,000
Company and CEO and 1995 157,242 0 2,000
CFO of Carsen Group Inc.
William J. Vella(3) 1997 122,060 10,150 6,000
President and COO of 1996 118,438 7,360 15,000
Carsen Group Inc. 1995 110,670 0 2,000
_________________________________________
(1) The Company did not pay or provide other forms of annual compensation
(such as perquisites and other personal benefits) to the above-named
executive officers having a value exceeding the lesser of $50,000 or 10%
of the total annual salary and bonus reported for such officers.
(2) The Company has no long-term incentive compensation plan other than its
1991 Employee Stock Option Plan, the MediVators 1991 Stock Option Plan,
and the 1991 Directors' Stock Option Plan described herein and various
individually granted options. The Company does not award stock
appreciation rights, restricted stock awards or long-term incentive plan
pay-outs.
(3) Messrs. Meltz and Vella were paid their salary and bonus in Canadian
dollars. The dollar amounts above have been translated from Canadian
dollars to U.S. dollars based upon an average exchange rate during the
fiscal year.
-13-
<PAGE>
STOCK OPTIONS
The following stock option information is furnished for the fiscal
year ended July 31, 1997 with respect to the Company's Chief Executive Officer
and the other executive officers of the Company named in the Compensation Table
above. Stock options were granted without tandem stock appreciation rights.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
% of Total
Number of Options Potential Realizable
Shares Granted to Value at Assumed
Underlying Employees Exercise Annual Rates of Stock
Options During the Price Per Expiration Price Appreciation
Name Granted Fiscal Year Share($) Date for Option Term($)(1)
---- ---------- ----------- --------- ---------- ---------------------
5% 10%
------- -------
<S> <C> <C> <C> <C> <C> <C>
Charles M. Diker 50,000 (2) 40.7 7.375 10/16/06 600,655 956,443
1,000 (3) 0.8 5.50 07/30/07 8,959 14,266
James P. Reilly 1,000 (3) 0.8 5.50 07/30/07 8,959 14,266
Edward E. Meltz 3,000 (4) 2.4 7.375 10/16/01 28,238 35,633
William J. Vella 6,000 (4) 4.9 7.375 10/16/01 56,475 71,265
</TABLE>
_________________________________________
(1) Represents the potential value of the options granted at assumed 5% and
10% rates of compounded annual stock price appreciation from the date of
grant of such options.
(2) These options are non-plan options and vest in three equal annual
installments, the first on the date of grant. The exercise price per
share of these options is the market value per share on the date of
grant.
(3) The options were granted under the Company's 1991 Directors' Stock Option
Plan. The exercise price per share of the options is the market value
per share on the date of grant. The options are subject to vesting as
follows: 50% of the total shares covered by the options vest on the first
anniversary of the date of grant and the remaining 50% vest on the second
anniversary of such date of grant.
(4) The options were granted under the Company's 1991 Employee Stock Option
Plan. The exercise price per share of the options is the market value
per share on the date of grant. The options are subject to vesting as
follows: 25% of the total shares covered by the options vest on each of
the first four anniversaries of the date of the grant.
-14-
<PAGE>
OPTION EXERCISE AND HOLDINGS
The following information is furnished for the fiscal year ended July
31, 1997 with respect to the Company's Chief Executive Officer and the other
executive officers of the Company named in the Compensation Table above, for
stock option exercises during such fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Shares Value of
Underlying Unexercised Unexercised in-the-Money
Shares Options at 7/31/97 Options at 7/31/97 ($)
Acquired On Value ----------------------------- -----------------------------
Name Exercise(#) Realized($) Exercisable Non-Exercisable Exercisable Non-Exercisable
---- ----------- ----------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Charles M. Diker 0 0 24,167 34,833 15,000 0
James P. Reilly 0 0 194,315 1,500 711,556 0
Edward E. Meltz 0 0 2,625 6,125 3,325 1,950
William J. Vella 5,000 18,750 11,000 19,500 10,469 2,656
</TABLE>
STOCK OPTIONS
An aggregate of 250,000 shares of Common Stock is reserved for
issuance or available for grant under the Company's 1991 Employee Stock Option
Plan (the "1991 Employee Plan"). Options granted under the 1991 Employee Plan
are intended to qualify as incentive stock options within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"). The 1991
Employee Plan is administered in all respects by a committee composed of at
least two non-employee members of the Company's Board of Directors who are
designated by the Board (the "Stock Option Committee"). The Stock Option
Committee may determine the employees to whom options are to be granted and the
number of shares subject to each option. Under the terms of the 1991 Employee
Plan, all employees of the Company or subsidiaries of the Company are eligible
for option grants. The option exercise price of options granted under the 1991
Employee Plan is fixed by the Stock Option Committee but must be no less than
100% of the fair market value of the shares of Common Stock subject to the
option at the time of grant, except that in the case of an employee who
possesses more than 10% of the total combined voting power of all classes of
stock of the Company (a "10% Holder"), the exercise price must be no less than
110% of said fair market value. Options may be exercised by the payment in full
in cash or by the tendering or cashless exchange of shares of Common Stock or of
options to acquire shares of Common Stock having a fair market value, as
determined by the Stock Option Committee, equal to the option exercise price.
Options granted under the 1991 Employee Plan may not be exercised more than ten
years after the date of grant, five years in the case of an incentive stock
option granted to a 10% Holder. All options outstanding at July 31, 1997 have a
term of five years. At July 31, 1997, options to purchase 139,750 shares of
Common Stock at prices between $3.50 and $8.75 per share were outstanding under
the 1991 Employee Plan, and 70,625 shares were available for grant under the
1991 Employee Plan.
-15-
<PAGE>
An aggregate of 200,000 shares of Common Stock is reserved for
issuance or available for grant under the Company's 1991 Directors' Stock Option
Plan (the "Directors' Plan"). Options granted under the Directors' Plan do not
qualify as incentive stock options within the meaning of Section 422 of the
Code. The Directors' Plan provides for the automatic grant to each of the
Company's directors of options to purchase 1,000 shares of Common Stock on the
last business day of the Company's fiscal year. In addition, an option to
purchase 500 shares of Common Stock is granted automatically on the last
business day of each fiscal quarter to each director (exclusive of Messrs.
Diker, Reilly and Dornbush and any other director who serves as an officer or
employee of the Company) provided that the director attended any regularly
scheduled meeting of the Board, if any, held during such quarter. Each such
option grant is at an exercise price equal to the fair market value of the
Common Stock on the date of grant and has a ten year term (but in no event more
than three months following the optionee's ceasing to serve as a director of the
Company). The fiscal year options are exercisable in two equal annual
installments commencing on the first anniversary of the grant thereof and the
quarterly options are exercisable in full immediately. At July 31, 1997,
options to purchase 126,000 shares of Common Stock at prices between $2.00 and
$10.25 per share were outstanding under the Directors' Plan, and 24,000 shares
were available for grant under the Directors' Plan.
An aggregate of 200,000 shares of Common Stock is reserved for
issuance or available for grant under the Company's 1997 Employee Plan. See
"Proposal 2 - Approval of the Employee Stock Option Plan" above for a
description of the 1997 Employee Plan, which is subject to shareholder approval.
The Company also has outstanding options granted by MediVators prior
to the Merger under the MediVators 1991 Stock Option Plan (the "MediVators
Plan") which became fully exercisable as a result of the Merger. At July 31,
1997, options to purchase 61,131 shares of Common Stock at prices between $6.08
and $8.27 per share were outstanding under the MediVators Plan. No future
options will be granted under the MediVators Plan.
In June 1990, Mr. Reilly was granted a ten year non-plan option to
purchase 139,815 shares of Common Stock at an exercise price of $1.75 per share.
This option is exercisable in full. In addition, in July 1990, Mr. Reilly was
granted a ten year non-plan option to purchase 50,000 shares at an exercise
price of $1.875 per share. This option is exercisable in full.
In December 1994, Mr. Barbanell was granted a five year non-plan
option to purchase 25,000 shares of Common Stock at an exercise price of $3.75
per share. This option is currently exercisable in full and expires in December
1999.
In October 1996, Mr. Diker was granted a ten year non-plan option to
purchase 50,000 shares of Common Stock at an exercise price of $7.375 per share.
This option is exercisable in three equal annual installments beginning October
1996. In addition, in October 1997, Mr. Diker was granted a ten year non-plan
option to purchase 50,000 shares of Common Stock at an exercise price of $7.00
per share. This option is exercisable in three equal annual installments
beginning October 1997.
-16-
<PAGE>
SHAREHOLDER PROPOSALS FOR 1998 PROXY STATEMENT
Shareholder proposals that are intended to be presented at the
Company's annual meeting of stockholders to be held in 1998 must be received by
the Company no later than June 30, 1998 in order to be included in the proxy
statement and related materials.
FORM 10-K
UPON THE WRITTEN REQUEST OF A RECORD HOLDER OR BENEFICIAL OWNER OF
COMMON STOCK ENTITLED TO VOTE AT THE MEETING, THE COMPANY WILL PROVIDE WITHOUT
CHARGE A COPY OF ITS ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JULY
31, 1997, INCLUDING THE FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES,
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. REQUESTS SHOULD BE MAILED TO
MS. JOANNA Z. ALBRECHT, CANTEL INDUSTRIES, INC., 1135 BROAD STREET, SUITE 203,
CLIFTON, NEW JERSEY 07013-3346.
SOLICITATION OF PROXIES
The cost of solicitation of proxies in the accompanying form has been
or will be borne by the Company. In addition to solicitation by mail,
arrangements may be made with brokerage houses and other custodians, nominees
and fiduciaries to send proxy material to beneficial owners, and the Company
will, upon request, reimburse them for any attendant expenses.
In order to ensure the presence of a quorum at the Meeting, all
stockholders are requested to sign and return promptly the enclosed proxy in the
postage paid envelope provided for that purpose. The signing of the proxy will
not prevent your attending the meeting and voting in person if you wish to do
so.
OTHER MATTERS
The Board knows of no other matters to be presented for stockholder
action at the Annual Meeting. However, if other matters do properly come before
the Annual Meeting or any adjournments or postponements thereof, the Board
intends that the persons named in the proxies will vote upon such matters in
accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
Darwin C. Dornbush
Secretary
December 30, 1997
-17-
<PAGE>
Exhibit A
1997 EMPLOYEE STOCK OPTION PLAN
OF
CANTEL INDUSTRIES, INC.
(As adopted by the Board of Directors as of October 16, 1997)
1. THE PLAN. This 1997 Employee Stock Option Plan (the "Plan")
is intended to encourage ownership of stock of Cantel Industries, Inc. (the
"Corporation") by specified employees of the Corporation and its subsidiaries
and to provide additional incentive for them to promote the success of the
business of the Corporation.
2. STOCK SUBJECT TO THE PLAN. Subject to the provisions of
Paragraph 14 hereof, the total number of shares of Common Stock, par value $.10
per share, of the Corporation (the "Stock") which may be issued pursuant to
Incentive Stock Options, as defined by Section 422 of the Internal Revenue Code
("ISOs"), under the Plan (the "Options") shall be 200,000. Such shares of Stock
may be in whole or in part, either authorized and unissued shares or treasury
shares as the Board of Directors of the Corporation (the "Board") shall from
time to time determine. If an Option shall expire or terminate for any reason
without having been exercised in full, the unpurchased shares covered thereby
shall (unless the Plan shall have been terminated) again be available for
Options under the Plan.
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered
by a committee (the "Committee") composed of two or more non-employee members of
the Board which shall have plenary authority, in its discretion, to determine
the employees of the Corporation and its subsidiaries to whom Options shall be
granted ("Optionees"), the number of shares to be subject to each Option
(subject to the provisions of Paragraph 2), the option exercise price (the
"Exercise Price") (subject to the provisions of Paragraph 7), the vesting
schedule of each option and the other terms of each Option. The Board shall
have plenary authority, subject to the express provisions of the Plan, to
interpret the Plan, to prescribe, amend and rescind any rules and regulations
relating to the Plan and to take such other action in connection with the Plan
as it deems necessary or advisable. The interpretation and construction by the
Board of any provisions of the Plan or of any Option granted thereunder shall be
final and no member of the Board shall be liable for any action or determination
made in good faith with respect to the Plan or any Option granted thereunder by
the Committee.
4. EMPLOYEES ELIGIBLE FOR OPTIONS. All employees of the
Corporation or its subsidiaries shall be eligible for Options. In making the
determination as to employees to whom Options shall be granted and as to the
number of shares to be covered by such Options, the Committee shall take into
account the duties of the respective employees, their present and potential
contributions to the success of the Corporation and such other factors as it
shall deem relevant in connection with accomplishing the purpose of the Plan.
A-1
<PAGE>
5. TERM OF PLAN. The Plan shall terminate on, and no Options
shall be granted after October 15, 2007 provided that the Committee may at any
time terminate the Plan prior thereto.
6. MAXIMUM OPTION GRANT. With respect to an Option granted
to an individual that is intended to qualify as an ISO, the aggregate fair
market value (determined as of the time the Option is granted) of the Stock with
respect to which such Option and all other ISOs granted to the individual
(whether under this Plan or under any other stock option plan of the Corporation
or any of its subsidiaries) are exercisable for the first time during a calendar
year may not exceed $100,000.
7. EXERCISE PRICE. Each Option shall state the Exercise
Price, which shall be, in the case of ISOs, not less than 100% of the fair
market value of the Stock on the date of the granting of the Option, nor less
than 110% in the case of an ISO granted to an individual who, at the time the
Option is granted, is a 10% Holder (as hereinafter defined). The fair market
value of shares of Stock shall be determined by the Board and shall be (i) the
closing price of the Stock on the date of the granting of the Option as reported
by NASDAQ or any quotation reporting organizations, or (ii) if the Stock did not
trade on such date, the mean between the high bid and low asked prices.
8. TERM OF OPTIONS. The term of each Option granted under
this Plan shall be for a maximum of ten years from the date of granting thereof,
and a maximum of five years in the case of an ISO granted to a 10% Holder, but
may be for a lesser period or be subject to earlier termination as hereinafter
provided.
9. EXERCISE OF OPTIONS. An Option may be exercised from
time to time as to any part or all of the Stock to which the Optionee shall then
be entitled, provided, however, that an Option may not be exercised (a) as to
less than 100 shares at any time (or for the remaining shares then purchasable
under the Option, if less than 100 shares), (b) prior to the expiration of at
least six months from the date of grant except in case of the death or
disability of the Optionee and (c) unless the Optionee shall have been in the
continuous employ of the Corporation or its subsidiaries from the date of the
granting of the Option to the date of its exercise, except as provided in
Paragraphs 12 and 13. The Exercise Price shall be paid in full at the time of
the exercise of an Option (i) in cash or (ii) by the transfer to the Corporation
of shares of its Stock with a fair market value (as determined by the Committee)
equal to the purchase price of the Stock issuable upon exercise of such Option.
The holder of an Option shall not have any rights as a stockholder with respect
to the Stock issuable upon exercise of an Option until certificates for such
Stock shall have been delivered to him after the exercise of the Option.
10. NON-TRANSFERABILITY OF OPTIONS. Except as provided in the
following sentence, an Option shall not be transferable otherwise than by will
or the laws of descent and distribution and is exercisable during the lifetime
of the employee only by him or his guardian or legal representative. A
transferred Option would be subject to all of the same terms and conditions as
if such Option had not been transferred.
11. FORM OF OPTION. Each Option granted pursuant to the Plan
shall be evidenced by an agreement (the "Option Agreement") which shall clearly
identify the status of the Options granted thereunder (i.e., an ISO ) and which
shall be in such form as the Committee shall from time to time approve. The
Option Agreement shall comply in all respects with the terms and conditions
A-2
<PAGE>
of the Plan and may contain such additional provisions, including, without
limitation, restrictions upon the exercise of the Option, as the Committee shall
deem advisable.
12. TERMINATION OF EMPLOYMENT. In the event that the
employment of an Optionee shall be terminated (otherwise by reason of death),
such Option shall be exercisable (to the extent that such Option was exercisable
at the time of termination of his employment) at any time prior to the
expiration of a period of time not exceeding three months after such
termination, but not more than ten years (five years in the case of an ISO
granted to a 10% Holder) after the date on which such Option shall have been
granted. Nothing in the Plan or in the Option Agreement shall confer upon an
Optionee any right to be continued in the employee of the Corporation or its
subsidiaries or interfere in any way with the right of the Corporation or any
subsidiary to terminate or otherwise modify the terms of an Optionee's
employment, provided, however, that a change in an Optionee's duties or position
shall not affect such Optionee's Option so long as such Optionee is still an
employee of the Corporation or one of its subsidiaries.
13. DEATH OF OPTIONEE. In the event of the death of an
Optionee, any unexercised portion of such Optionee's Option shall be exercisable
(to the extent that such Option was exercisable at the time of his death) at any
time prior to the expiration of a period not exceeding three months after his
death but not more than ten years (five years in the case of an ISO granted to a
10% Holder) after the date on which such Option shall have been granted and only
by such person or persons to whom such deceased Optionee's rights shall pass
under such Optionee's will or by the laws of descent and distribution.
14. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of
changes in the outstanding Stock of the Corporation by reason of stock
dividends, splitups, recapitalizations, mergers, consolidations, combinations or
exchanges of shares, separations, reorganizations or liquidations, the number
and class of shares or the amount of cash or other assets or securities
available upon the exercise of any Option granted hereunder and the maximum
number of shares as to which Options may be granted to an employee shall be
correspondingly adjusted, to the end that the Optionee's proportionate interest
in the Corporation, any successor thereto or in the cash, assets or other
securities into which shares are converted or exchanged shall be maintained to
the same extent, as near as may be practicable, as immediately before the
occurrence of any such event. All references in this Plan to "Stock" from and
after the occurrence of such event shall be deemed for all purposes of this Plan
to refer to such other class of shares or securities issuable upon the exercise
of Options granted pursuant hereto.
15. SHAREHOLDER AND STOCK EXCHANGE APPROVAL. This Plan is
subject to and no Options shall be exercisable hereunder until after the
approval by the holders of a majority of the Stock of the Corporation voting at
a duly held meeting of the stockholders of the Corporation within twelve months
after the date of the adoption of the Plan by the Board.
16. AMENDMENT OF THE PLAN. The Board shall have complete power
and authority to modify or amend the Plan (including the form of Option
Agreement) from time to time in such respects as it shall deem advisable;
provided, however, that the Board shall not, without the approval of the votes
represented by a majority of the outstanding Stock of the Corporation present or
represented at a meeting duly held in accordance with the applicable laws of the
Corporation's jurisdiction of incorporation and entitled to vote at a meeting of
stockholders or by the written consent of stockholders owning stock representing
a majority of the votes of the corporation's outstanding stock, (i) increase the
A-3
<PAGE>
maximum number of shares which in the aggregate are subject to Options under the
Plan (except as provided by Paragraph 14), (ii) extend the term of the Plan or
the period during which Options may be granted or exercised, (iii) reduce the
Exercise Price, in the case of ISOs below 100% (110% in the case of an ISO
granted to a 10% Holder) of the fair market value of the Stock issuable upon
exercise of Options at the time of the granting thereof, other than to change
the manner of determining the fair market value thereof, (iv) increase the
maximum number of shares of Stock for which any employee may be granted Options
under the Plan pursuant to Paragraph 6, (v) modify the requirements as to
eligibility for participation in the Plan, or (vi) amend the plan in any respect
which would cause such options to no longer qualify for ISO treatment pursuant
to the Internal Revenue Code. No termination or amendment of the Plan shall,
without the consent of the individual Optionee, adversely affect the rights of
such Optionee under an Option theretofore granted to him or under such
Optionee's Option Agreement.
17. TAXES. The Corporation may make such provisions as it may
deem appropriate for the withholding of any taxes which it determines is
required in connection with any Options granted under the Plan. The Corporation
may further require notification from the Optionees upon any disposition of
Stock acquired pursuant to the exercise of Options granted hereunder.
18. CODE REFERENCES AND DEFINITIONS. Whenever reference is made
in this Plan to a section of the Internal Revenue Code, the reference shall be
to said section as it is now in force or as it may hereafter be amended by any
amendment which is applicable to this Plan. The term "subsidiary" shall have
the meaning given to the term "subsidiary corporation" by Section 425(f) of the
Internal Revenue Code. The term "10% Holder" shall mean any person who, for
purposes of Section 422 of the Internal Revenue Code owns more than 10% of the
total combined voting power of all classes of stock of the employer corporation
or of any subsidiary corporation.
A-4
<PAGE>
CANTEL INDUSTRIES, INC.
PROXY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned stockholder of
CANTEL INDUSTRIES, INC. (the "Company") hereby appoints Charles M. Diker and
James P. Reilly, and each them, as proxies, with full power of substitution, to
vote, as designated below, on behalf of the undersigned the number of votes to
which the undersigned is entitled, at the Annual Meeting of Stockholders of
CANTEL INDUSTRIES, INC., to be held on Thursday, January 22, 1998 at 9:30 a.m.
at The Harmonie Club, 4 East 60th Street, New York, New York, or at any
adjournments thereof:
(1) ELECTION OF DIRECTORS
NOMINEES FOR TERMS EXPIRING AT 2000 ANNUAL MEETING OF STOCKHOLDERS:
RICHARD L. BLOCH, DARWIN C. DORNBUSH and MORRIS OFFIT
NOMINEES FOR TERMS EXPIRING AT 1999 ANNUAL MEETING OF STOCKHOLDERS:
JAMES P. REILLY and ROBERT L. BARBANELL
FOR ALL NOMINEES WITHHOLD AUTHORITY
_____________ _____________
To withhold authority to vote for any individual nominee, write the nominee's
name in the space provided below.
______________________________
(2) TO APPROVE A NEW STOCK OPTION PLAN OF THE COMPANY TO BE DESIGNATED THE
1997 EMPLOYEE STOCK OPTION PLAN.
FOR _____ AGAINST _____ ABSTAIN _____
(3) TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE CURRENT FISCAL YEAR ENDING JULY 31, 1998.
FOR _____ AGAINST _____ ABSTAIN _____
(4) IN THEIR DISCRETION WITH RESPECT TO ANY OTHER MATTERS THAT MAY
PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
<PAGE>
Unless a contrary direction is indicated, the shares represented by
this proxy will be voted for all nominees for directors named in the proxy
statement enclosed herewith and for Proposals 2 and 3; if specific instructions
are indicated, this proxy will be voted in accordance with such instructions.
PLEASE VOTE, DATE AND SIGN THIS PROXY AND RETURN IT AT ONCE, WHETHER
OR NOT YOU EXPECT TO ATTEND THE MEETING. YOU MAY VOTE IN PERSON IF YOU DO
ATTEND.
Dated:
---------------------------------
----------------------------------------
----------------------------------------
Signature(s)
NOTE: If signing for estates, trusts
or corporations, title or
capacity should be stated. If
shares are held jointly, each
holder should sign.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
