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. )
Filed by registrant |X|
Filed by a party other than the registrant |_|
Check the appropriate box:
|X| Preliminary proxy statement
|_| Definitive proxy statement
|_| Definitive additional materials
|_| Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Cantel Industries, Inc.
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(Name of Registrant as Specified in its Charter)
Cantel Industries, Inc.
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(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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
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4) Proposed maximum aggregate value of transaction:
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|_| 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:
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2) Form, schedule or registration statement No.:
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3) Filing party:
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4) Date filed:
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CANTEL INDUSTRIES, INC.
1135 Broad Street
Clifton, New Jersey 07013
NOTICE OF 1998 ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of CANTEL INDUSTRIES, INC. (the "Company"), will be held at The
Harmonie Club, 4 East 60th Street, New York, New York on Tuesday, April 27, 1999
at 10:00 a.m., for the following purposes:
1. To elect three (3) directors to serve a term of three (3) years.
(Proposal 1)
2. To approve and adopt a new stock option plan to be designated the
1998 Directors' Stock Option Plan. (Proposal 2)
3. To amend the Company's 1997 Employee Stock Option Plan to
increase the number of shares reserved for issuance and available for grant
thereunder from 200,000 to 400,000. (Proposal 3)
4. To approve and ratify three stock options, each to purchase
50,000 shares of the Company's Common Stock, granted to the Company's Chairman
of the Board during the period October 1996 through October 1998. (Proposal 4)
5. To amend the Certificate of Incorporation of the Company to
increase the authorized number of shares of Common Stock from 7.5 million to 12
million shares. (Proposal 5)
6. To consider the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending July 31, 1999. (Proposal 6)
7. To transact such other business as may properly be brought before
the Meeting.
Only stockholders of record at the close of business on March 29,
1999 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, 1998 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
<PAGE>
CANTEL INDUSTRIES, INC.
1135 Broad Street
Clifton, New Jersey 07013
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 April 27, 1999 at 10:00 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 April 1, 1999.
As of March 29, 1999, the record date fixed for the determination of
stockholders entitled to notice of and to vote at the Meeting, there were
4,382,268 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 March 29,
1999 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, 3
and 6. The affirmative vote of a majority of the total votes cast in person or
by proxy is necessary for the approval of Proposal 4. The affirmative vote of a
majority of all the outstanding shares of Common Stock
entitled to vote is necessary for the approval of Proposal 5. Votes at the
Annual Meeting will
<PAGE>
be tabulated by an independent inspector of election appointed by the Company or
the Company's transfer agent.
As the affirmative vote of a plurality of votes cast is required for
the election of directors, abstentions and "broker non-votes" will have no
effect on the outcome of such election. As the affirmative vote of a majority of
shares of Common Stock present in person or represented by proxy is necessary
for the approval of Proposals 2, 3 and 6, an abstention will have the same
effect as a negative vote, but "broker non-votes" will have no effect on the
outcome of the vote. As the affirmative vote of a majority of the total votes
cast in person or by proxy is necessary for the approval of Proposal 4, an
abstention and "broker non-votes" will have no effect on the outcome of the
vote. As the affirmative vote of a majority of all of the issued and outstanding
shares of Common Stock is required for the approval of Proposal 5, abstentions
and "broker non-votes" will have the same effect as negative votes.
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 2001 Annual Meeting of
Stockholders and until their respective successors have been duly elected and
qualified. Management has nominated Charles M. Diker, Alan J. Hirschfield and
Bruce Slovin for election as directors. 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 2001 Director
Annual Meeting of Stockholders Age Since
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Charles M. Diker
Chairman of the Board of the Company and Non-
Managing Principal of Weiss, Peck & Greer ................ 64 1985
Alan J. Hirschfield
Vice Chairman of the Board of the Company and Co-
Chairman and Co-Chief Executive Officer of Data
Broadcasting Corp. ....................................... 63 1986
Bruce Slovin
President of McAndrews & Forbes Holdings
Inc. and President of Revlon Group, Inc. ................. 63 1986
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DIRECTORS WHOSE TERMS OF OFFICE CONTINUE
Terms Expiring at 1999 Director
Annual Meeting of Stockholders Age Since
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James P. Reilly
President and Chief Executive Officer of 58 1989
the Company................................................
Robert L. Barbanell
President of Robert L. Barbanell Associates, Inc........... 68 1994
Terms Expiring at 2000
Annual Meeting of Stockholders
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Darwin C. Dornbush, Esq.
Partner in the law firm of Dornbush Mensch
Mandelstam & Schaeffer, LLP............................... 69 1963
Morris W. Offit
Chief Executive Officer of OFFITBANK....................... 62 1986
John W. Rowe, M.D.
President and Chief Executive Officer of Mount
Sinai-NYU Medical Center and Health System................. 54 1998
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 AMF
Bowling, Inc. (NYSE), an owner and operator of bowling centers and a
manufacturer of bowling equipment, 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. Mr. Hirschfield is also a director of Chyron
Corporation (NYSE), a supplier of graphics for the television industry.
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 the
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<PAGE>
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. 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, 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. 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. Mr. Offit is a Trustee of Johns Hopkins University
where he served as Chairman of the Board of Trustees 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. Reilly has served as President and Chief Executive Officer of
the Company since June 1989. Mr. Reilly is a certified public accountant.
Dr. Rowe has served as President and Chief Executive Officer of
Mount Sinai-NYU Medical Center and Health System since July 1998, President of
the Mount Sinai Hospital from July 1988 to July 1998, and President of the Mount
Sinai School of Medicine since July 1988, where he also serves as a Professor of
Medicine and Geriatrics. Prior to July 1988, Dr. Rowe was a Professor of
Medicine and the founding Director of the Division on Aging at Harvard Medical
School and Chief of Gerontology at Boston's Beth Israel Hospital. Dr. Rowe is
also Director of the MacArthur Foundation Research Network on Successful Aging
and a director of Global Pharmaceutical Corp. (NASDAQ), a manufacturer and
marketer of generic prescription pharmaceuticals.
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 Koala Healthcare, Inc.
(NASDAQ), a health care services company, 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 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 recommend the appointment of the Company's
independent auditors and, in conjunction with the independent auditors, to
review the overall scope of the audit and the Company's financial statements.
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 1998 at which all members of the committee were
present.
The Company has a Compensation Committee of the Board of Directors
consisting of Messrs. Dornbush and Hirschfield. The primary functions of the
Compensation Committee are the establishment of compensation policies and to
consider and make recommendations to the Board concerning compensation
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<PAGE>
and bonuses to the Company's senior management. Although the Compensation
Committee did not hold any formal meetings during fiscal 1998, 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 four meetings during the
fiscal year ended July 31, 1998. Except for Messrs. Hirschfield and Offit, both
of whom did not attend two of the 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
During fiscal 1998, Directors who were not officers of the Company
were paid $500 per meeting attended, plus expenses. Commencing on August 1,
1998, non-officer Directors were paid an annual directors' fee of $5,000 and
$1,000 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.
THE BOARD RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED HEREIN.
PROPOSAL 2
APPROVAL OF THE 1998 DIRECTORS' STOCK OPTION PLAN
The Board of Directors has adopted, subject to stockholder approval,
and recommends the adoption of the proposed 1998 Directors' Stock Option Plan
("Directors' Plan"), under which options may be granted for an aggregate of
200,000 shares of Common Stock on or prior to December 1, 2008. All of the
Company's directors are eligible to participate in the Directors' Plan.
The following description of the Directors' 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. No options have been granted to date under the Directors' Plan.
The Directors' Plan provides for the issuance of up to 200,000
shares of Common Stock to directors of the Company upon the exercise of options
granted thereunder. Options granted under the
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<PAGE>
Directors' Plan are not intended to be incentive stock options ("ISOs") within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (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, commencing with the fiscal year
ending July 31, 2000. In addition, an option to purchase 500 shares of Common
Stock will be granted automatically on the last business day of each fiscal
quarter, commencing with the quarter ending October 31, 1999, to each director
(exclusive of the Chairman of the Board and President of the Company, and any
director who is a full-time employee of the Company), provided that the director
attended any regularly scheduled meeting of the Board, if any, which was held
during such quarter. Each such option grant will be at an exercise price equal
to the fair market value of the Common Stock on the date of grant and have a
ten-year term (subject to termination three months following the optionee's
ceasing to serve as a director of the Company). The fiscal year options will be
exercisable in two equal annual installments commencing on the first anniversary
of the grant thereof and the quarterly options will be exercisable in full
immediately. The number of shares is subject to adjustment on account of stock
splits, stock dividends and other dilutive changes in the Common Stock. Shares
of Common Stock covered by unexercised stock options that expire, terminate, or
are cancelled are available for option grant under the Directors' Plan.
For Federal income tax purposes, directors will realize ordinary
income upon exercise of options granted under the Directors' Plan measured by
the excess of the fair market value of the shares at the time of exercise over
the option price (even though the optionee will have received no cash), and the
Company will be entitled to a deduction in the same amount. Any difference
between the greater of such market value or option price and the price at which
the optionee may subsequently sell the shares will be treated as gain or loss
from the sale or disposition of a capital asset.
The Board of Directors is of the opinion that adoption of the
proposed Directors' Plan is in the best interests of the Company in that it will
aid the Company in securing and retaining the services of persons having the
breadth of professional and business experience who, through their efforts and
expertise, can make a significant contribution to the success of the Company's
business by serving as members of the Company's Board of Directors. The Board
believes that the Directors' Plan will provide an additional incentive for such
directors 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 BOARD RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE 1998
DIRECTORS' STOCK OPTION PLAN.
PROPOSAL 3
APPROVAL OF AMENDMENT TO THE
1997 EMPLOYEE STOCK OPTION PLAN
In October 1997, the Company adopted the 1997 Employee Stock Option
Plan (the "Employee Plan") under which the Company may, from time to time, issue
options exercisable for shares of Common Stock. At the time of adoption, 200,000
shares of Common Stock were reserved for issuance under the Employee Plan. The
Board of Directors has adopted an amendment to the Employee Plan to increase the
number of shares of Common Stock reserved for issuance by 200,000 shares, to
400,000 shares. Adoption
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<PAGE>
of such amendment requires stockholder approval. A copy of the Employee Plan, as
currently in effect, is attached hereto as Exhibit B.
Plan Description
Options granted under the Employee Plan are intended to qualify as
ISOs within the meaning of Section 422 of the Code. The 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 Employee Plan,
all employees of the Company or subsidiaries of the Company are eligible for
option grants. Options under the Employee Plan are granted to reward past
performance by employees, as an incentive for future performance, and to recruit
and retain qualified personnel.
The option exercise price of options granted under the 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 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 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.
As of March 29, 1999, options to purchase 194,500 shares were
outstanding under the Employee Plan. No shares were issued pursuant to the
exercise of options granted the Employee Plan. With the adoption of the proposed
amendment, 205,500 shares would be available for future grants. The number of
shares is subject to adjustment on account of stock splits, stock dividends and
other dilutive changes in the Common Stock. Shares of Common Stock covered by
unexercised stock options that expire, terminate, or are cancelled are available
for option grant under the Employee Plan.
The principal United States federal income tax consequences of the
issuance and exercise of options, and subsequent stock dispositions, are as
follows:
Although an individual can receive an unlimited number of ISOs
during any calendar year, the aggregate fair market value (determined at the
time of option grant) of the stock with respect to which ISO's first become
exercisable during 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. For purposes of computing an optionee's
regular tax liability, an optionee will not realize taxable income for federal
income tax purposes upon the grant or exercise of an ISO and the Company will
not be entitled to a deduction in connection with the grant or the exercise of
the option. 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
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<PAGE>
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.
Provided that the optionee does not dispose of the shares acquired
upon the exercise of an ISO within two years from the date of grant or within
one year from the date of exercise, the net gain realized on the sale or other
taxable disposition of the shares is subject to tax at capital gains tax rates.
If Common Stock acquired pursuant to the exercise of an ISO is disposed of
within the two year or one year periods mentioned above, any gain realized by
the optionee generally will be taxable at the time of such disposition as (i)
ordinary income to the extent of the difference between the exercise price and
the lesser of (a) the fair market value of the Common Stock on the date the ISO
is exercised, or (b) the amount realized on such disposition, and (ii)
short-term or long-term capital gain to the extent of any excess of the amount
realized on the disposition over the fair market value of the Common Stock on
the date the ISO is exercised. The Company will be entitled to a deduction equal
to the amount of ordinary income recognized by the optionee at the time such
income is recognized. The Company will be required to satisfy any applicable
withholding requirements in order to be entitled to a tax deduction.
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.
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.
The Board of Directors is of the opinion that adoption of the
amendment to the 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 BOARD RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE AMENDMENT TO
THE EMPLOYEE PLAN.
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PROPOSAL 4
APPROVAL OF OPTION GRANTS
TO CHAIRMAN OF THE BOARD
The Company has granted to Charles M. Diker, Chairman of the Board
and a Director of the Company, non-plan options, each to purchase 50,000 shares
of Common Stock (an aggregate of 150,000 shares), on October 15, 1996 (the "1996
Option"), October 15, 1997 (the "1997 Option") and October 30, 1998 (the "1998
Option"). Each of the options (collectively, the "Diker Options") was granted
pursuant to an Option Agreement between the Company and Mr. Diker in the form
annexed hereto as Exhibit C. The Diker Options each has a ten-year term and is
exercisable in three equal annual installments beginning on the date of grant.
The exercise prices of the 1996 Option, 1997 Option and 1998 Option are $7.375
per share, $7.00 per share, and $7.75 per share, respectively, each being the
fair market value of the shares of Common Stock on the date of grant. The Diker
Options, which do not qualify as ISOs, may be exercised by the payment in full
in cash or by the tendering or cashless exchange of shares of Common Stock
having a fair market value equal to the option exercise price.
The Diker Options were recommended by the Company's Compensation
Committee and approved by the Board of Directors based upon the significant
services provided by Mr. Diker to the Company. Approval of the Diker Options by
the stockholders of the Company is required pursuant to Nasdaq Rule
4310(c)(25)(H)(i), which Rule requires (among other things) stockholder approval
of non-plan options to purchase 25,000 or more shares granted to officers or
directors of companies with securities listed on NASDAQ. Therefore, the Company
proposes that the stockholders approve and ratify the Diker Option.
THE BOARD RECOMMENDS A VOTE "FOR" THE PROPOSAL TO APPROVE AND RATIFY
THE DIKER OPTIONS.
PROPOSAL 5
AMENDMENT OF CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
The stockholders are asked to consider and approve a proposed
amendment to the Company's Certificate of Incorporation to increase the
authorized Common Stock of the Company from 7,500,000 shares to 12,000,000
shares. A copy of the resolution to be presented for adoption by the
stockholders is annexed hereto as Exhibit D.
The Company's Certificate of Incorporation, as amended, authorizes
the Company to issue up to 7,500,000 shares of Common Stock and 1,000,000 shares
of Preferred Stock. As of March 29, 1999, 4,382,268 shares of Common Stock were
issued and outstanding. Additionally, as of that date an aggregate of 868,964
shares of Common Stock were reserved for issuance upon the exercise of options
granted or available for grant under the Company's various stock option plans or
under stock options individually granted by the Board of Directors.
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If the proposal to increase the authorized number of shares of
Common Stock is approved by the stockholders, the additional shares may be
issued at such time and on such terms and conditions as the Board of Directors
may determine without further approval by the stockholders, subject to
applicable provisions of law and the rules of any securities exchange on which
shares of the Common Stock are listed for trading.
To accomplish the proposed increase in the Company's authorized
capital stock, Article FOURTH of the Company's Certificate of Incorporation must
be amended as set forth in Exhibit D to this Proxy Statement.
The Board of Directors considers it desirable to have available for
issuance sufficient authorized shares of Common Stock to enable the Company to
act without delay if favorable opportunities arise to raise additional equity
capital or to acquire companies or products by the issuance of shares of Common
Stock and otherwise to be in a position to take various steps requiring the
issuance of additional shares of Common Stock (including stock splits or stock
dividends) that in the judgment of the Board of Directors are in the best
interests of the Company. The Company has no current plans, arrangements or
understandings regarding the issuance of any of the additional shares of Common
Stock for which authorization is sought and there are no negotiations pending
with respect to the issuance thereof for any purpose.
THE BOARD RECOMMENDS A VOTE "FOR" THE PROPOSED AMENDMENT TO THE
COMPANY'S CERTIFICATE OF INCORPORATION.
PROPOSAL 6
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, l999. 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.
THE BOARD RECOMMENDS A VOTE "FOR" THE APPOINTMENT OF ERNST & YOUNG
LLP.
-10-
<PAGE>
OWNERSHIP OF SECURITIES
The following table sets forth stock ownership information as of
March 29, 1999 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 and 879,134 (2) 19.6
One New York Plaza Director
New York, New York
Alan J. Hirschfield Vice Chairman of the Board 222,333 (3) 5.0
P.O. Box 7443 and Director
Jackson, Wyoming
Robert L. Barbanell Director 63,000 (4) 1.4
Darwin C. Dornbush Secretary and Director 23,180 (5) .5
Morris W. Offit Director 55,000 (6) 1.2
James P. Reilly President and CEO and 237,334 (7) 5.2
1135 Broad Street Director
Clifton, New Jersey
John W. Rowe, M.D. Director 7,668 (8) .2
Bruce Slovin Director 161,500 (9) 3.7
Richard M. Rumble President and CEO of 8,334(10) .2
MediVators, Inc.
Craig A. Sheldon Vice President and Controller 22,500(11) .5
William J. Vella President and COO of Carsen 36,453(12) .8
Group Inc.
All officers and directors as
a group of 11 persons 1,715,750(13) 35.1
</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.
-11-
<PAGE>
A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from March 29, 1999 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 March 29, 1999 have been exercised.
(2) Includes 108,501 shares which Mr. Diker may acquire pursuant to stock
options. Does not include an aggregate of 519,515 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 26,000 shares which Mr. Hirschfield may acquire pursuant to stock
options.
(4) Includes 38,000 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.
(5) Includes 13,500 shares which Mr. Dornbush may acquire pursuant to stock
options.
(6) Includes 23,000 shares which Mr. Offit may acquire pursuant to stock
options.
(7) Includes 211,001 shares which Mr. Reilly may acquire pursuant to stock
options.
(8) Includes 7,668 shares which Dr. Rowe may acquire pursuant to stock
options.
(9) Includes 26,500 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.
(10) Includes 8,334 shares which Mr. Rumble may acquire pursuant to stock
options.
(11) Includes 22,500 shares which Mr. Sheldon may acquire pursuant to stock
options.
(12) Includes 18,750 shares which Mr. Vella may acquire pursuant to stock
options.
(13) Includes 503,754 shares which may be acquired pursuant to stock options.
-12-
<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 executive compensation. The Committee is currently comprised of two
members, both of whom are non-employee directors.
Executive compensation for the fiscal year ended July 31, 1998
consisted of base salary plus an incentive bonus when earned. The policy of the
Committee, in consultation with the Chairman and 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.
In March 1999, the Board of Directors approved a new Employment Agreement
between the Company and Mr. Reilly. See "Employment Agreement" below.
Long-term incentive compensation policy consists exclusively of the
award of stock options under the Company's 1997 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 1997 Employee Stock Option Plan
is responsible for the award of stock options. Two non-employee directors,
Darwin C. Dornbush and Alan J. Hirschfield, currently serve on the Stock Option
Committee, which administers the granting of options under said Plans.
Compensation Committee:
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. Charles M. Diker, Chairman of the
Company, and James P. Reilly, President and Chief Executive
-13-
<PAGE>
Officer of the Company, however, participated in deliberations concerning
executive compensation, except with respect to the compensation of the Chairman
and the President.
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, 1993, and the reinvestment of all dividends).
-14-
<PAGE>
Summary of Cash and Certain
Other Compensation
The following table sets forth, for the fiscal years ended July
31, 1998, 1997, and 1996, 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 $100,000 in salary and bonus during the fiscal year ended July 31, 1998:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation(1) Awards(2)
---------------------- ---------
Name and Salary Bonus Options
Principal Position Year ($) ($) (#)
------------------ ---- ------- ------ -------
<S> <C> <C> <C> <C>
Charles M. Diker 1998 125,000 0 51,000
Chairman of the Company 1997 100,000 0 51,000
1996 83,333 0 1,000
James P. Reilly 1998 250,000 39,225 1,000
President and Chief Executive 1997 250,000 12,600 1,000
Officer of the Company 1996 250,000 0 1,000
Richard M. Rumble(3) 1998 125,000 25,000 25,000
President and Chief Executive
Officer of MediVators, Inc.
Craig A. Sheldon 1998 97,500 15,000 5,000
Vice President and Controller 1997 88,125 10,000 5,000
of the Company 1996 80,625 9,000 5,000
William J. Vella(4) 1998 133,447 19,000 10,000
President and COO of 1997 122,060 10,150 6,000
Carsen Group Inc. 1996 118,438 7,360 15,000
</TABLE>
- ----------
(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 1997 Employee Stock Option Plan, the
MediVators 1991 Stock Option Plan, the 1991 Directors' Stock Option Plan
and the 1997 Directors' Stock Option Plan described herein and
-15-
<PAGE>
various individually granted options. The Company does not award stock
appreciation rights, restricted stock awards or long-term incentive plan
pay-outs.
(3) Mr. Rumble was employed by MediVators commencing in fiscal 1998.
MediVators entered into a an employment agreement with Mr. Rumble that
took effect on August 1, 1997 and, as amended, expires on July 31, 2001.
Mr. Rumble's employment provides for (i) a base salary of $125,000,
subject to annual increases of no less than 5%, (ii) a discretionary bonus
based upon factors including the performance of MediVators, with a
guaranteed minimum bonus of $25,000 during the initial contract year;
(iii) use of a Company owned or leased automobile; (iv) MediVators to
maintain a life insurance policy on the life of Mr. Rumble in the face
amount of $250,000, payable to his designated beneficiary; (v) the Company
to grant Mr. Rumble an option to purchase 25,000 shares of Common Stock
under the 1991 Employee Stock Option Plan; and (vi) Mr. Rumble to
participate in all benefit plans applicable generally to executive
officers of the Company.
(4) Mr. Vella was paid his 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.
Employment Agreement
In March 1999, the Company entered into a four year employment agreement
with James P. Reilly (the "Employment Agreement") that is effective as of August
1, 1998. The Employment Agreement provides for (i) an annual base salary of
$275,000, subject to annual increases equal to the greater of 5% or a cost of
living formula, (ii) annual incentive compensation equal to 6% of the increase
in the current fiscal year's pre-tax income over the highest pre-tax income of
any prior fiscal year commencing July 31, 1998, subject to adjustment or
recalculation on a formula basis if an acquisition of another company occurs
during the employment term, (iii) a bonus of $65,000 payable upon the execution
of the Employment Agreement, August 1, 1999 and August 1, 2000 (subject to his
continued employment on such dates), (iv) participation in employee health,
insurance and other benefit plans, (v) maintenance by the Company of a life
insurance policy on the life of Mr. Reilly in the face amount of $500,000
payable to his designated beneficiary, and (vi) an automobile allowance of $700
a month. In addition, Mr. Reilly was granted a stock option under the Company's
1997 Employee Stock Option Plan to purchase 100,000 shares of Common Stock at an
exercise price equal to $___ (the fair market value of the shares on the date of
grant) and having a ten year term. The Employment Agreement provided that if Mr.
Reilly's employment is terminated for any reason, including voluntary
termination, death, disability or cause, prior to August 1, 1999, he will be
entitled to a severance payment of $130,000; if his employment is terminated on
or after August 1, 1999 and prior to August 1, 2000, he will be entitled to a
severance payment of $65,000. If the Employment Agreement expires and Mr.
Reilly's employment is terminated thereafter for any reason, Mr. Reilly will be
entitled to a severance payment equal to one year's base salary plus the amount
of his bonus for the most recently completed fiscal year (the "Severance
Amount"). In the event of a "Change In Control" (as defined in the Employment
Agreement), Mr. Reilly has a nine month option to terminate his employment and
receive a severance payment on a formula basis based on his average compensation
over the previous three years. If such termination is prior to August 1, 1999,
severance is 2.5 times such average compensation. After August 1, 1999 such
amount is reduced by 2.5% per month, but not below the Severance Amount
described above. The Employment Agreement contains a non-competition provision
applicable for two years following termination of Mr. Reilly's employment. The
Company has the right to terminate the Agreement for death, disability and
-16-
<PAGE>
"cause" (as defined in the Employment Agreement") and Mr. Reilly has the right
to terminate the Employment Agreement upon three months' notice.
Stock Options
The following stock option information is furnished for the
fiscal year ended July 31, 1998 with respect to the Company's Chief Executive
Officer and the other executive officers of the Company named in the
Compensation Table above. Stock options were granted without tandem stock
appreciation rights.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
% of Total
Number of Options Potential Realizable
Shares Granted to Value at Assumed
Underlying Employees Exercise Annual Rates of Stock
Options During the Price Per Expiration Price Appreciation
Name Granted Fiscal Year Share($) Date for Option Term($)(1)
---- --------- ----------- -------- ------ ---------------------
5% 10%
------- -----
<S> <C> <C> <C> <C> <C> <C>
Charles M. Diker 50,000 (2) 38.3 7.00 10/15/07 570,113 907,810
1,000 (3) 0.8 8.75 07/30/08 14,253 22,695
James P. Reilly 1,000 (3) 0.8 8.75 07/30/08 14,253 22,695
Richard M. Rumble 25,000 (4) 19.2 5.50 07/31/02 175,489 221,445
Craig A. Sheldon 5,000 (6) 3.8 6.50 02/17/03 41,479 52,342
William J. Vella 6,000 (5) 4.6 5.50 07/31/02 42,117 53,147
4,000 (6) 3.1 6.50 02/17/03 33,183 41,873
</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) This option is a non-plan option and vests in three equal annual
installments, the first on the date of grant. The exercise price per share
of this option is the market value per share on the date of grant.
(3) These 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) This option was granted under the Company's 1991 Employee Stock Option
Plan. The exercise price per share of the option is the market value per
share on the date of grant. The option is subject to
-17-
<PAGE>
vesting as follows: 33.3% of the total shares covered by the option vest
on each of the first three anniversaries of the date of grant.
(5) This option was granted under the Company's 1991 Employee Stock Option
Plan. The exercise price per share of the option is the market value per
share on the date of grant. The option is subject to vesting as follows:
25% of the total shares covered by the option vest on each of the first
four anniversaries of the date of the grant.
Option Exercise and Holdings
The following information is furnished for the fiscal year ended July
31, 1998 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 7/31/98 Options at 7/31/98 ($)
Acquired On Value ------------------------------- ---------------------------------
Name Exercise(#) Realized($) Exercisable Non-Exercisable Exercisable Non-Exercisable
---- ----------- ----------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Charles M. Diker 0 0 58,501 51,499 116,321 82,866
James P. Reilly 0 0 195,315 1,500 1,345,018 1,625
Richard M. Rumble 0 0 8,334 16,666 27,089 54,161
Craig A. Sheldon 0 0 15,000 15,000 52,344 33,281
William J. Vella 2,500 11,875 17,000 21,000 35,563 32,063
</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 ISOs within the meaning of Section 422 of 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
-18-
<PAGE>
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, 1998 have a term of five years. At July 31, 1998,
options to purchase 170,000 shares of Common Stock at prices between $4.25 and
$8.75 per share were outstanding under the 1991 Employee Plan. No additional
options will be granted under the 1991 Employee Plan.
An aggregate of 200,000 shares of Common Stock is currently reserved
for issuance or available for grant under the Company's 1997 Employee Stock
Option Plan (the "1997 Employee Plan"). Stockholders at the Meeting are being
asked to approve an amendment to the 1997 Employee Plan that would increase the
number of shares of Common Stock reserved for issuance or available for grant by
200,000 shares, to a total of 400,000 shares. See "Proposal 3 - Approval of
Amendment to the 1997 Employee Stock Option Plan." Options granted under the
1997 Employee Plan are intended to qualify as ISOs within the meaning of Section
422 of 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 option at the time of grant, except
that in the case of 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 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. All options outstanding at
July 31, 1998, have a term of five years. At July 31, 1998, options to purchase
32,500 shares of Common Stock at prices between $6.50 and $8.75 per share were
outstanding under the 1997 Employee Plan, and 167,500 shares were available for
grant under the 1997 Employee Plan.
-19-
<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 "1991 Directors' Plan"). Options granted under the 1991 Directors'
Plan do not qualify as incentive stock options within the meaning of Section 422
of the Code. The 1991 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 (subject to
termination three months following the optionee's ceasing to serve as a director
of the Company). 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 on the last
business day of each fiscal quarter provided that Mr. Dornbush attended any
regularly scheduled meeting of the Board, if any, held during such quarter. The
fiscal year options are exercisable in two equal annual installments commencing
on the first anniversary of the grant thereof and the quarterly options,
including the non-plan options issued to Mr. Dornbush, are exercisable in full
immediately. At July 31, 1998, options to purchase 141,000 shares of Common
Stock at prices between $2.00 and $10.25 per share were outstanding under the
1991 Directors' Plan, and 9,000 shares were available for grant under the 1991
Directors' Plan. Subject to approval of the 1998 Directors' Stock Option Plan,
no additional options will be granted under the 1991 Directors' Plan after July
31, 1999. In addition, at July 31, 1998, Mr. Dornbush had non-plan options to
purchase an aggregate of 4,000 shares of Common Stock at prices between $5.50
and $8.75 per share.
An aggregate of 200,000 shares of Common Stock is reserved for
issuance or available for grant under the Company's 1998 Directors' Stock Option
Plan. See "Proposal 2 - Approval of the Directors' Stock Option Plan" above for
a description of the 1998 Directors' Stock Option Plan, which is subject to
shareholder approval.
The Company also has outstanding options granted by MediVators prior
to the MediVators merger under the MediVators 1991 Stock Option Plan (the
"MediVators Plan") which became fully exercisable as a result of the MediVators
merger. At July 31, 1998, options to purchase 32,848 shares of Common Stock at
prices between $6.08 and $8.27 per share were outstanding under the MediVators
Plan. No additional 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. See "Employment
Agreement" above for description of an option granted to Mr. Reilly in March
1999 under the Company's 1997 Employee Stock Option Plan.
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
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<PAGE>
installments beginning October 1996. 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. In October 1998, Mr. Diker was
granted a ten-year non-plan option to purchase 50,000 shares of Common Stock at
an exercise price of $7.75 per share. This option is exercisable in three equal
annual installments beginning October 1998. All three of the option grants to
Mr. Diker are subject to shareholder approval at this meeting. See "Proposal 4 -
Approval of Option Grants to Chairman of the Board."
In October 1998, Dr. Rowe was granted a ten-year non-plan option to
purchase 10,000 shares of Common Stock at an exercise price of $8.00 per share.
This option is exercisable in three equal annual installments beginning October
1998. In March 1998 Dr. Rowe was granted a ten-year non-plan option to purchase
10,000 shares of Common Stock at an exercise price of $6.375 per share. This
option is exercisable in three equal annual installments beginning March 1999.
SHAREHOLDER PROPOSALS FOR 1998 PROXY STATEMENT
Shareholder proposals that are intended to be presented at the
Company's 1999 annual meeting of stockholders must be received by the Company no
later than December 28, 1999 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, 1998, INCLUDING THE FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE,
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
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<PAGE>
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
April 1, 1999
Exhibit A
1998 DIRECTORS' STOCK OPTION PLAN
OF
CANTEL INDUSTRIES, INC.
(As adopted by the Board of Directors as of December 2, 1998)
1. The Plan. The 1998 Directors' Stock Option Plan (the "Plan") is
intended to strengthen the ability of Cantel Industries, Inc. (the
"Corporation") to attract and retain the services of persons having the breadth
of professional and business experience who, through their efforts and
expertise, can make a significant contribution to the success of the
Corporation's business by serving as members of the Corporation's Board of
Directors and to provide additional incentive for such directors to continue to
work for the best interests of the Corporation and its stockholders through
ownership of its Common Stock, par value $.10 per share (the "Stock").
Accordingly, the Company will grant to each director (the "Optionee") an option
(the "Option") to purchase shares of Stock on the terms and conditions
hereinafter set forth.
2. Stock Subject to the Plan. Subject to the provisions of Paragraph 11
hereof, the total number of shares of Stock which may be issued pursuant to
Options granted under the Plan 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
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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. The Committee 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; provided, however,
that the grant of Options under the Plan, the exercise price of such Options and
the timing and manner in which such Options become exercisable shall not be
subject to discretion by the Board but shall be governed by the terms of the
Plan. 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.
4. Directors Eligible for Options; Grant of Options.
1. Each director of the Corporation, whether or not an employee,
shall be eligible for Options under this Plan.
2. Subject to Section 12, an Option to purchase 1,000 shares of
Stock shall automatically be granted under the Plan each year
on the last business day of the Corporation's fiscal year,
commencing with the fiscal year ending July 31, 2000, to each
member of the Corporation's Board serving as such on said
date. Each Option granted under this subsection B shall be
exercisable as to 50% of the number of shares of Stock covered
thereby on the first anniversary of the grant of such Option
and shall become exercisable for the balance of shares of
Stock covered thereby on the second anniversary of the grant
of such Option. The exercise price of each Option granted
under this subsection B shall be the fair market value (as
hereinafter defined) of Stock covered thereby on the date the
Option is granted.
3. Subject to Section 12, an Option to purchase 500 shares of
Stock shall be automatically be granted on the last business
day of each fiscal quarter, commencing with the quarter ending
October 31, 1999, to each member of the Corporation's Board
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serving as such on said date provided that the member attended
any regularly scheduled meeting of the Board, if any, which
was held during such quarter (whether in person or by
telephonic means). Notwithstanding the foregoing to the
contrary, neither Messrs. Diker nor Reilly, nor any member of
the Board who is an employee of the Corporation, shall be
entitled to receive any quarterly Option grants in accordance
with this subsection C. Each Option granted under this
subsection C shall be exercisable immediately and the exercise
price of each such Option shall be the fair market value (as
hereinafter defined) of the Stock covered thereby on the date
the Option is granted (the "Determination Date").
4. For purposes of this Plan, the fair market value shall be:
(1) if the Stock is listed on a national stock exchange, the
closing price of the Stock on the largest principal securities exchange on the
Determination Date, or, if there shall have been no sales on any such exchange
on such Determination Date, such closing price on the first date prior to the
Determination Date that there was a sale on the exchange; or
(2) if the Stock is not listed on a national stock exchange,
the closing price of the Stock on the National Market System of the National
Association of Securities Dealers, Inc., Automated Quotation System ("NASDAQ"),
or, if there shall have been no sales on such Determination Date on the NASDAQ
National Market System, such closing price on the first date prior to the
Determination Date that there was a sale on the NASDAQ Market system; or
(3) if the Common Stock is not listed on a securities exchange
or the NASDAQ National Market System, the mean of the highest bid and lowest
asked prices of the Stock on the Determination Date as quoted in the NASDAQ
System; or
(4) if the Common Stock is not quoted in the NASDAQ System,
the mean of the highest bid and lowest asked prices of the Stock on the
Determination Date in the over-the-counter market as reported by the National
Quotation Bureau, Incorporated, or any similar successor organization.
5. Term of Plan. The Plan shall terminate on, and no Options shall be
granted after, December 1, 2008, provided that the Board may at any time
terminate the Plan prior thereto.
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6. Term of Options. The term of each Option granted under this Plan shall
be for a period of ten years from the date of granting thereof.
7. 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 as to less than 100
shares at any one time (or for the remaining shares then purchasable under the
Option, if less than 100 shares). The purchase price of the Stock issuable upon
exercise of an Option shall be paid in full at the time of the exercise thereof
(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 Board) 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.
8. Non-transferability of Options. 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 Optionee only by the Optionee.
9. Form of Option. Each Option granted pursuant to the Plan shall be
evidenced by an agreement (the "Option Agreement") which shall be in such form
as the Board shall from time to time approve. The Option Agreement shall comply
in all respects with the terms and conditions of the Plan.
10. Termination of Board Membership. In the event that an Optionee shall
cease to be a member of the Board (whether by resignation, death or disability
or otherwise), the Options of the Optionee granted pursuant to this Plan shall
be exercisable (to the extent that such Options were exercisable at the time of
termination of Board membership) at any time prior to the expiration of a period
of time not exceeding three months after such termination by the Optionee (or,
in the event such termination resulted from the Optionee's death, by the legal
representative of the Optionee) and the balance of such Option, if any, shall be
cancelled.
11. Adjustments Upon Changes in Capitalization. In the event of changes in
the outstanding Stock of the Corporation by reason of stock dividends,
split-ups, recapitalizations, mergers, consolidations, combinations or exchanges
of shares, separations, reorganizations or liquidations, the number and class of
shares available under the Plan, the number and class of shares or the amount of
cash or other assets or securities available upon the
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exercise of any Option granted hereunder and the number of shares as to which
Options are to be granted to an Optionee 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 the Plan to refer to such other class of
shares or securities issuable upon the exercise of Options granted pursuant
hereof.
12. Stockholder Approval. This Plan is subject to, and no Options shall be
exercisable hereunder, until the approval of this Plan by the Corporation's
stockholders at the next annual meeting of stockholders.
13. 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
the 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 maximum number of shares which in the aggregate are subject to
Options under the Plan (except as provided by Paragraph 11, (ii) extend the term
of the Plan or the period during which Options may be granted or exercised,
(iii) reduce the Option exercise price below 100% 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) modify the requirements as to eligibility for participation in the Plan. 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.
14. 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 Optionee upon any disposition of Stock acquired
pursuant to the exercise of Options granted hereunder.
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Exhibit B
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.
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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.
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
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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. The
Committee shall have discretionary authority to grant Options which will be
transferable to members of an Optionee's immediate family, including trusts for
the benefit of such family members and partnerships in which such family members
are the only partners. 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 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.
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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.
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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
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.
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Exhibit C
STOCK OPTION AGREEMENT made as of the __th day of October 199_, by and
between CANTEL INDUSTRIES, INC., a Delaware corporation with principal offices
located at 1135 Broad Street, Clifton, New Jersey, 07013 (the "Company"), and
CHARLES M. DIKER, One New York Plaza, New York, New York 10004 (the "Optionee").
The Optionee is presently a director and employee of the Company and is
hereby granted an option to purchase shares of the Company's Common Stock, par
value $.10 per share ("Common Stock"), on the terms and conditions set forth
below.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, receipt of which is hereby acknowledged, the Company
hereby grants the Optionee the option to acquire shares of the Common Stock of
the Company upon the following terms and conditions:
1. GRANT OF OPTION.
(a) The Company hereby grants to the Optionee the right and option
(the "Option") to purchase up to 50,000 shares of Common Stock (the "Shares"),
to be issued upon the exercise hereof, fully paid and non-assessable, during the
following periods:
(i) 16,667 Shares may be purchased commencing October __,
199_ (date of grant);
(ii) an additional 16,667 Shares may be purchased commencing
October __, 199_ (first anniversary of date of grant);
(iii) and an additional 16,666 Shares may be purchased
commencing October __, 199_ (second anniversary of date
of grant).
(b) The Option granted hereby shall expire and terminate at 5:00
p.m. local time in New York, New York on October__, 200_ (tenth anniversary of
date of grant) (the "Expiration Date") at which time the Optionee shall have no
further right to purchase any Shares not then purchased.
2. EXERCISE PRICE. The exercise price of the Option shall be $___ per
Share (fair market value on date of grant), and shall be payable in cash or by
certified check; provided, however, that in lieu of payment in full in cash or
by such check, the exercise price (or balance thereof) may be paid in full or in
part by the delivery and transfer to the Company of Common Stock already owned
by the Optionee and having a fair
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market value (as determined by the Board of Directors in its absolute
discretion) equal to the cash exercise price (or balance thereof) for the number
of Shares as to which the Option is being exercised. The Company shall pay all
original issue or transfer taxes on the exercise of the Option.
3. EXERCISE OF OPTION. The Optionee shall notify the Company by registered
or certified mail, return receipt requested, addressed to its principal office,
as to the number of Shares which he desires to purchase under the Option, which
notice shall be accompanied by payment of the Option exercise price therefor as
specified in Paragraph 2 above. As soon as practicable after the receipt of such
notice, the Company shall, at its principal office or another mutually
convenient location, tender to the Optionee certificates issued in the
Optionee's name evidencing the Shares purchased by the Optionee hereunder.
4. CONDITIONS OF EXERCISE. The Optionee (or his legal representative
following the death of the Optionee) shall have the right to exercise the Option
only while the Optionee is a director or employee of the Company; provided,
however, the Option may be exercised at any time within three (3) months after
the date the Optionee ceases to be a director or employee, but only to the
extent that it was exercisable upon such date of termination and in no event
after the Expiration Date.
5. NON-ASSIGNABILITY OF OPTION. The Optionee may not give, grant, sell,
exchange, transfer legal title, pledge, assign or otherwise encumber or dispose
of the Option herein granted or any interest therein, otherwise than by will or
the laws of descent and distribution and, except as provided in Paragraph 4
hereof, the Option shall be exercisable only by the Optionee.
6. THE SHARES AS INVESTMENT. By accepting the Option, the Optionee agrees
for himself, his heirs and legatees that any and all Shares purchased upon the
exercise thereof shall be acquired for investment and not for distribution, and
upon the issuance of any or all of the Shares subject to the Option, the
Optionee, or his heirs or legatees receiving such Shares, shall deliver to the
Company a representation in writing that such Shares are being acquired in good
faith for investment and not for distribution. The Company may place a "stop
transfer" order with respect to such Shares with its transfer agent and may
place an appropriate restrictive legend on the certificate(s) evidencing such
Shares.
7. RESTRICTION OF ISSUANCE OF SHARES. The Optionee shall, if so requested
by the Company, represent and agree, in writing and in such form as the Company
shall determine, that any securities purchased by the Optionee upon the exercise
of this Option are being purchased for investment and not with a view to
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the distribution thereof, and shall make such other or additional
representations and agreements and furnish such information as the Company may
in its reasonable discretion deem necessary or desirable to assure compliance by
the Company, on terms acceptable to the Company, with provisions of the
Securities Act of 1933 and any other applicable legal requirements. If at any
time the Company shall reasonably determine that the listing, registration or
qualification of the Shares subject to this Option upon any securities exchange
or under any state or federal law, or the consent or approval of any
governmental regulatory body, are necessary or desirable in connection with the
issuance or purchase of the Shares subject thereto, this Option may not be
exercised in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Company. The Optionee shall have no rights against the
Company if this Option is not exercisable by virtue of the foregoing provision.
The certificate representing any securities issued pursuant to the exercise of
this Option may, at the discretion of the Company, bear a legend in
substantially the following form:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933. The securities have been acquired for
investment and may not be pledged or hypothecated and may not be sold or
transferred in the absence of an effective Registration Statement for the
securities under the Securities Act of 1933 or an opinion of counsel to
the Company that registration is not required under said Act. In the event
that a Registration Statement becomes effective covering the securities or
counsel to the Company delivers a written opinion that registration is not
required under said Act, this certificate may be exchanged for a
certificate free from this legend."
8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
(a) In the event of changes in the outstanding Shares by reason of
stock dividends, split-ups, recapitalizations, mergers, consolidations,
combination, exchanges of shares, separations, reorganizations, liquidations and
the like, the number and class of Shares or the amount of cash or other assets
or securities available upon the exercise of the Option and the exercise price
thereof shall be correspondingly adjusted by the Company, to the end that the
Optionee's proportionate interest in the Company, any successor thereto or in
the cash, assets or other securities into which shares are converted or
exchanged shall be maintained to the same
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extent, as near as may be practicable, as immediately before the occurrence of
any such event.
(b) Any adjustment in the number of Shares shall apply
proportionately to only the then unexercised portion of the Option. If
fractional Shares would result from any such adjustment, the adjustment shall be
revised to the next higher whole number.
(c) In case the Company is merged or consolidated with another
corporation, or the property or shares of the Company are acquired by another
corporation, or the Optionee is discharged other than for cause, the exercise
schedule set forth in paragraph 1 above shall be waived and all options for the
entire 50,000 shares of the Company's Common Stock shall be immediately
exercisable by the Optionee pursuant to paragraph 3 above.
For purposes of this paragraph (c), merger or consolidation with another
corporation or acquisition by another corporation shall be defined as the
acquisition by another corporation of more than forty percent (40%) of any of
the then outstanding stock, voting power, or assets of the Company.
9. NO RIGHTS AS SHAREHOLDERS. The Optionee shall have no rights as a
shareholder in respect of the Shares as to which the Option shall not have been
exercised and payment made as herein provided.
10. BINDING EFFECT. Except as herein otherwise expressly provided, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto, their legal representatives and assigns.
11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey applicable to agreements
made and to be performed wholly within the State of New Jersey.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
CANTEL INDUSTRIES, INC.
By:
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Charles M. Diker James P. Reilly, President
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Exhibit D
RESOLVED, that the first paragraph of Article FOURTH of the
Company's Certificate of Incorporation be amended to read as follows:
"FOURTH: The total number of shares of all classes of stock
that the Corporation shall have authority to issue is Thirteen
Million (13,000,000), of which Twelve Million (12,000,000) shall be
shares of Common Stock, par value $.10 per share, and One Million
(1,000,000) shall be shares of Preferred Stock, par value $1.00 per
share, and the voting powers, designations, preferences and
relative, participating, optional or other special qualifications,
limitations or restrictions thereof are as follows:"
-1-
<PAGE>
CANTEL INDUSTRIES, INC.
PROXY - For the Annual Meeting of Stockholders - April 27, 1999
The undersigned stockholder of CANTEL INDUSTRIES, INC., revoking any previous
proxy for such stock, hereby appoints James P. Reilly and Darwin C. Dornbush, or
either of them, the attorneys and proxies of the undersigned, with full power of
substitution, and hereby authorizes them to vote all shares of Common Stock of
CANTEL INDUSTRIES, INC. which the undersigned is entitled to vote at the Annual
Meeting of Stockholders to be held on April 27, 1999 at 10:00 a.m. at The
Harmonie Club, 4 East 60th Street, New York, New York, and any adjournments
thereof on all matters coming before said meeting, or at any adjournments
thereof:
(1) ELECTION OF DIRECTORS
NOMINEES FOR TERMS EXPIRING AT 2001 ANNUAL MEETING OF STOCKHOLDERS:
Charles M. Diker, Alan J. Hirschfield and Bruce Slovin
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 THE 1998 DIRECTORS' STOCK OPTION PLAN.
FOR _____ AGAINST _____ ABSTAIN _____
(3) TO AMEND THE COMPANY'S 1997 EMPLOYEE STOCK OPTION PLAN TO INCREASE THE
NUMBER OF SHARES RESERVED FOR ISSUANCE AND AVAILABLE FOR GRANT THEREUNDER.
FOR ______ AGAINST _____ ABSTAIN _____
(4) TO APPROVE AND RATIFY THREE STOCK OPTIONS GRANTED TO THE COMPANY'S CHAIRMAN
OF THE BOARD.
FOR _______ AGAINST _____ ABSTAIN _____
(5) TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION TO AUTHORIZE ADDITIONAL
SHARES OF THE COMPANY'S COMMON STOCK
FOR _______ AGAINST _____ ABSTAIN _____
(6) TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT
AUDITORS FOR THE CURRENT FISCAL YEAR ENDING JULY 31, 1999.
<PAGE>
FOR _____ AGAINST _____ ABSTAIN _____
(7) IN THEIR DISCRETION WITH RESPECT TO ANY OTHER MATTERS THAT MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
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, 3, 4, 5 and 6; 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
