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Exhibit 10(gg)
1998 DIRECTORS' STOCK OPTION PLAN
OF
CANTEL INDUSTRIES, INC.
(As amended)
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 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.
(a) Each director of the Corporation, whether or not an
employee, shall be eligible for Options under this Plan.
(b) 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, 1999, 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
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fair market value (as hereinafter defined) of Stock covered thereby on the date
the Option is granted.
(c) 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 July 31, 1999, to each member
of the Corporation's Board 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").
(d) For purposes of this Plan, the fair market value
shall be:
(i) if the Stock is listed on a securities
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, the mean of the highest bid and lowest
asked prices on such securities exchange on such Determination Date; or
(ii) if the Stock is not listed on a securities
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
(iii) 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
(iv) 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.
6. TERM OF OPTIONS. The term of each Option granted under this
Plan before July 31, 2000 shall be for a period of ten years from the date of
granting thereof and the term of each Option granted under this Plan on or after
July 31, 2000 shall be for a period of five 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
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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 him.
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 of 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 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
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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.
