Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

AGREEMENT dated as of this 23rd day of November, 2011, by and between Minntech
Corporation, a Minnesota corporation (“Minntech” or the “Company”) and Roy K.
Malkin (the “Employee”).

 

Introduction

 

Employee and the Company are parties to a Severance Agreement effective as of
January 1, 2010 (the “Severance Agreement”) and desire to terminate the
Severance Agreement and enter into a new employment agreement on the terms and
conditions set forth herein.  The Company is a wholly-owned subsidiary of Cantel
Medical Corp., a Delaware corporation (“Cantel”).

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained, it is
hereby agreed by and between the Company and Employee as follows:

 

1.             Engagement and Term.  The Company hereby employs Employee and
Employee hereby accepts such employment by the Company on the terms and
conditions set forth herein, for the period commencing on December 1, 2011 (the
“Effective Date”) and ending, unless sooner terminated in accordance with the
provisions of Section 4 hereof, on January 5, 2014 (the “Employment Period”).

 

2.             Scope of Duties.  Employee will be employed by the Company as a
Senior Advisor.  Employee’s responsibilities will be comprised of providing
advice to and working on special projects assigned by senior executives of the
Company as well as the President and CEO of Cantel.  Employee agrees to perform
the duties associated with his employment to the best of his abilities, and
shall faithfully devote his business time (subject to the limitations described
herein) and efforts so as to advance the best interests of the Company. 
Employee may serve on the board of directors of other companies and provide part
time services to other companies so long as they are not competitors of the
Company or otherwise violate the Amended and Restated Confidentiality and
Non-Competition Agreement of even date herewith (the “Confidentiality
Agreement”) and such activities do not materially interfere with Employee’s
duties hereunder.  There is no restriction on where Employee may reside.  In no
event will Employee be obligated to provide services to the Company hereunder
for more than (i) 30 hours a week during the period commencing on the Effective
Date and ending December 31, 2012 (the “Initial Year”) or (ii) 10 hours a week
during the period commencing January 1, 2013 and ending January 5, 2014 (the
“Second Year”).

 

3.             Compensation.

 

3.1.          Base Salary.  In respect of services to be performed by Employee
during the Employment Period, the Company agrees to pay Employee a base salary
(“Base Salary”) at the rate of $430,000 per year during the Initial Year and at
the rate of $100,000 per year during the Second Year.  The Base Salary shall be
payable at such regular times and intervals as the Company customarily pays its
employees from time to time, but in no event less frequently than

 

Execution Copy

 

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every second week.  Employee acknowledges that he will not be participating in
the Company’s MICP, Cantel’s Annual Incentive Compensation or in any other
compensation plan of the Company or Cantel.  For so long as Employee is
qualified to receive benefits under the Company’s disability insurance program,
amounts paid to Employee will be offset against Base Salary payments payable
under this Section 3.1.  The Company will have no right whatsoever to withhold
payments of Base Salary other than in connection with a termination of this
Agreement by the Company for cause under Section 4.2.

 

3.2.          Equity Compensation.

 

3.2.1.       Employee acknowledges that he will not be considered for any new
stock options, restricted stock awards or any other equity awards under Cantel’s
2006 Equity Incentive Plan (the “2006 Plan”) or under any other benefit plan of
Cantel or the Company.  All stock options and restricted stock currently held by
Employee under the 2006 Plan will continue to vest in accordance with their
respective terms; provided, however, that if Employee retires prior to the end
of the Employment Period, the vesting of the stock options will accelerate in
full.  In all events, the expiration date of the stock options shall remain the
original term thereof.

 

3.2.2.       Subject to (i) Employee’s timely filing of a duly executed “Release
of All Claims” substantially in the form attached hereto as Exhibit A (the
“Release”) in accordance with Section 6 below, (ii) such Release becoming
effective and irrevocable in accordance with its terms not later than sixty (60)
days after Employee’s termination of employment, any and all shares of
restricted stock held by Employee on January 5, 2014 will automatically vest
(shares will no longer be subject to risk of forfeiture) on January 5, 2014 or,
in the event Employee’s employment is terminated prior to January 5, 2014 by the
Company without cause (i.e., for no reason or for a reason outside the scope of
Section 4.1 and 4.2), on the termination date.  If Employee’s employment is
terminated for cause or if Employee retires prior to January 5, 2014 or if the
conditions under clauses (i) and (ii) have not been satisfied as required, then
on the date of termination he shall immediately forfeit all restricted stock
that has not yet vested and for which the risk of forfeiture has not lapsed.

 

3.2.3.       In the event of a termination of Employee’s employment hereunder
due to Employee’s death prior to the full vesting of stock options and
restricted stock then held by Employee, all of Employee’s stock options and
restricted stock awards will automatically vest as of the date of such
termination.

 

3.3.          Other Benefits.

 

3.3.1.       During the Employment Period, Employee shall be entitled to
participate in all health, insurance and other benefit plans applicable
generally to employees of the Company on the same basis as such employees
provided he is eligible under the terms of such plans to remain a participant
thereof. If Employee becomes ineligible under the terms of a Company medical or
dental plan to continue participating in such plan during the Employment Period,
then if Employee is eligible for and properly elects Continuation Coverage for
himself and/or one or more qualified beneficiaries (as defined in ERISA
Section 607(3)) under the

 

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Company’s medical plan, the Company shall pay 80% of the premiums for such
Continuation Coverage during the balance of the Employment Period (or such
shorter period during which Employee is eligible for Continuation Coverage).  
In the event that during the Employment Period Employee becomes ineligible for
such Continuation Coverage, the Company agrees to reimburse Employee (or pay the
premiums) for alternate medical and/or dental insurance coverage obtained by
Employee up to a maximum of $1,100 per month through the end of the Employment
Period.  At all times during the Employment Period, Employee will have the
right, upon not less than 30 days’ notice given to the Company, to elect to
withdraw from the Company’s medical and dental plans (whether or not receiving
benefits under Continuation Coverage).  If Employee makes such election and
secures alternative medical and/or dental insurance coverage, then the Company
agrees, to reimburse Employee for the cost of such insurance up to a maximum
aggregate amount of $1,100 per month through the end of the Employment Period.
Employee acknowledges that all payments or reimbursements made by the Company
hereunder will be subject to receipt of appropriate invoices, receipts or other
documentation from Employee reasonably requested by the Company and will
constitute taxable income of Employee to the extent required by law.  Upon
expiration of the Employment Period, the Company will have no obligation to pay
any portion of Employee’s health or dental benefits, whether through
Continuation Coverage or otherwise.

 

3.3.2.       During the Employment Period, Employee shall be entitled to
participate in all life insurance plans applicable generally to employees of the
Company on the same basis as such employees. If Employee becomes ineligible
under the terms of a Company life insurance plan to continue participating in
such plan during the Initial Year, then if Employee is eligible for and properly
elects Continuation Coverage for himself under the Company’s life insurance
plan, the Company shall pay 100% of the premiums for such Continuation Coverage
during the balance of the Employment Period (or such shorter period during which
Employee is eligible for Continuation Coverage.  Employee acknowledges that all
payments by the Company hereunder will constitute taxable income of Employee to
the extent required by law. Upon expiration of the Employment Period, the
Company will have no obligation to pay any portion of Employee’s life insurance
benefits, whether through Continuation Coverage or otherwise.

 

3.3.3.       During the Employment Period, Employee will be entitled to five
(5) weeks’ paid PTO consistent with the Company’s PTO policy.  All vacations
shall be scheduled at the mutual convenience of the Company and Employee.

 

3.3.4.       The Company will reimburse Employee for reasonable out-of-pocket
expenses incurred in furtherance of the business of the Company (consistent with
the Company’s expense reimbursement policy in effect from time to time) upon the
presentation of appropriate receipts or vouchers therefor.  Such expenses shall
include cell phone service (comparable to the benefit provided by Employee prior
to the date hereof).

 

3.3.5.       During the Employment Period, Employee will be entitled to retain
and use the laptop computer currently used by him and the Company shall provide
IT support for such computer.  Following the Employment Period, Employee may
retain the

 

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computer without charge (subject to the Company’s right to remove its
confidential information).

 

3.5.6.       During the Initial Year, the Company will provide Employee with
office space as mutually agreed.  Employee acknowledges that after January 1,
2012 he will no longer have use of his current office.

 

4.             Termination of Employment.  The provisions of Section 1 of this
Agreement notwithstanding, this Agreement and Employee’s employment hereunder
may be terminated in the manner and for the causes hereinafter set forth, in
which event the Company shall be under no further obligation to Employee under
this Agreement other than as specifically provided herein.

 

4.1.          In the event of the death of Employee, this Agreement shall
immediately terminate. In such event, the Company shall pay to Employee’s legal
representative, either in a lump sum or on the same basis as paid prior to
Employee’s death (at the Company’s option), the Base Salary that otherwise would
have been payable to Employee had he remained an employee of the Company during
the three-month period following Employee’s death.  Except for such Base Salary,
the acceleration of stock options and restricted shares under Section 3.2.3, and
any other than payments and benefits accrued and due and payable to Employee
prior to his death, the Company shall have no further obligation pursuant to
this Section.

 

4.2.          If Employee (a) willfully discloses in a manner inconsistent with
his duties hereunder material trade secrets or other material confidential
information related to the business of the Company or otherwise willfully
violates a covenant set forth in the Confidentiality Agreement; (b) willfully
fails or refuses to carry out the business of the Company as lawfully directed
or to substantially perform his duties with the Company after written demand for
substantial performance is delivered to Employee by the CEO of Cantel, which
demand specifically identifies the manner in which such officer believes that
Employee has refused to carry out the Company’s business or not substantially
performed his duties and which performance is not substantially corrected by
Employee within thirty (30) days of receipt of such demand; (c) is convicted of,
or shall have plead guilty or nolo contendere to, a felony or commits an act of
dishonesty or moral turpitude, in the reasonable judgment of the Board of
Directors of the Company; or (d) abuses alcohol, prescription drugs or
controlled substances in a manner interfering with the performance of Employee’s
duties hereunder, after receipt from the Company of written notice of such
abuse, then the Company may, in addition to other rights and remedies available
at law or equity, immediately terminate this Agreement upon written notice to
Employee, with the “termination date” being the later of (i) the date of any
such Company notice; or (ii) the expiration date of any relevant cure period. 
Termination of Employee’s employment pursuant to the terms of this Section 4.2
shall be deemed for “cause.”

 

4.3.          In the event Employee’s employment shall be terminated for cause,
then in such event, the Company shall have no further obligation under this
Agreement to make any payments to Employee or to bestow any benefits on Employee
after the termination date, other than payments and benefits accrued and due and
payable to Employee prior to the termination date.

 

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4.4.          In the event Employee’s employment hereunder is terminated by the
Company without cause (i.e., for a reason outside the scope of Section 4.1 and
4.2), then, in addition to payments and benefits accrued and due and payable to
Employee prior to the termination date, the Company shall continue payments to
Employee of his Base Salary through January 5, 2014.  Except for the
acceleration of stock options and restricted shares under Section 3.2.2, the
foregoing shall be Employee’s exclusive right and remedy against the Company for
compensation or severance under this Agreement in the event of such termination.

 

5.             Disclosure of Confidential Information, Assignment of Inventions,
and Covenants Not to Compete. The Confidentiality Agreement, as amended, remains
in full force and effect.

 

6.             Release.  In consideration of the Company’s promises and
covenants and the performance thereof, Employee agrees that the accelerated
vesting of the restricted stock under Section 3.2.2 above shall be conditioned
on Employee’s release of the Company and all other persons named in the Release
from any and all causes of causes of action that Employee has or may have
against the Company or any such person before the effective date of the Release,
other than a cause based on a breach hereof.  The Release shall be substantially
in the form attached hereto as Exhibit A.  For the Release to be effective,
Employee (or his representative or agent) must have provided a signed version of
the Release to the Company and such Release shall have become effective and
irrevocable by its terms within sixty (60) days after the termination date of
Employment.

 

7.             Miscellaneous Provisions.

 

7.1.          The Severance Agreement is hereby terminated and null and void
without any further effect whatsoever.  Notwithstanding anything to the contrary
contained therein, no provisions of the Severance Agreement shall survive such
termination.

 

7.2.          Section headings are for convenience only and shall not be deemed
to govern, limit, modify or supersede the provisions of this Agreement.

 

7.3.          This Agreement is entered into in the State of Minnesota and shall
be governed pursuant to the law of the State of Minnesota.  If any provision of
this Agreement shall be held by a court of competent jurisdiction to be invalid,
illegal or unenforceable, the remaining provisions hereof shall continue to be
fully effective.

 

7.4.          In any judicial or other proceedings in which Employee’s right to,
or the amount of, benefits hereunder is disputed, the ultimate burden of proof
shall be on the Company.

 

7.5.          Any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration in Minneapolis,
Minnesota by three arbitrators, one of whom shall be appointed by the Company,
one of whom shall be appointed by Employee, and the third of whom shall be
appointed by the first two arbitrators.  If either the

 

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Company or Employee fails to appoint an arbitrator within 20 days of a request
in writing by the other to do so, or if the first two arbitrators cannot agree
on the appointment of a third arbitrator within 20 days after the second
arbitrator is designated, then such arbitrator shall be appointed by the Chief
Judge of the United States District Court located in the city of Minneapolis,
Minnesota, or upon his failure to act, by the American Arbitration Association
so as to enable the arbitrators to render an award within 90 days after the
three arbitrators have been appointed.  Following the selection of arbitrators
as set forth above, the arbitration shall be conducted promptly and
expeditiously and in accordance with the rules of the American Arbitration
Association.  Judgment may be entered on the arbitrator’s award in any court
having jurisdiction; provided, however, that Employee shall be entitled to seek
specific performance of his right to be paid during the pendency of any dispute
or controversy arising under or in connection with this Agreement.

 

7.6.          The Company shall pay all reasonable out-of-pocket expenses,
including reasonable legal fees and legal expenses, incurred by Employee in
connection with any judicial or other proceeding, including any arbitration
proceeding, to enforce this Agreement or to construe, determine, or defend the
validity of this Agreement.  The Company shall pay (or reimburse Employee) for
any such expense as soon as administratively practicable after Employee
demonstrates evidence that such expense have been incurred and not later than
thirty (30) days following Employee’s submission of such expenses to the Company
with a request for reimbursement.

 

7.7.          This Agreement contains the entire agreement of the parties
regarding this subject matter.  There are no contemporaneous oral agreements,
and all prior understandings, agreements, negotiations and representations are
merged herein.

 

7.8.          This Agreement may be modified only by means of a writing signed
by the party to be charged with such modification.  Notwithstanding anything in
this Agreement to the contrary, the Company expressly reserves the right to
amend this Agreement, with Employee’s consent, to the extent necessary to comply
with Code Section 409A, as it may be amended from time to time, and the
regulations, notices and other guidance of general applicability issued
thereunder.

 

7.9.          Notices or other communications required or permitted to be given
hereunder shall be in writing and shall be deemed duly given upon receipt by the
party to whom sent at the respective addresses set forth below or to such other
address as any party shall hereafter designate to the other in writing delivered
in accordance herewith:

 

If to the Company:

 

Minntech Corporation

c/o Cantel Medical Corp.

150 Clove Road

Little Falls, NJ  07424

United States

Attention: General Counsel

 

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If to Employee:

 

Roy K. Malkin

4450 Weston Lane N

Plymouth, MN  55446

 

7.10.        This Agreement shall inure to the benefit of, and shall be binding
upon, the Company, its successors and assigns, including, without limitation,
any entity that may acquire all or substantially all of the Company’s assets and
business or into which the Company may be consolidated or merged.  This
Agreement may not be assigned by Employee.

 

7.11.        This Agreement may be executed in separate counterparts, including
via facsimile, each of which shall constitute the original hereof.

 

7.12.        The execution and delivery of this Agreement by the Company has
been authorized and approved by all requisite corporate action.

 

7.13.        Employee acknowledges and agrees that, other than this Agreement,
any and all employment agreements, consulting agreements, severance agreements,
change of control agreements, or similar agreements under which he (or any
entity in which he controls or is a beneficial owner) and the Company are
parties, are hereby terminated effective immediately and null and void without
any further obligation or liability by or to either party.

 

IN WITNESS WHEREOF, the parties have set their hands as of the date first above
written.

 

 

MINNTECH CORPORATION

 

 

 

 

 

By:

/s/ Andrew A. Krakauer

 

 

Name: Andrew A. Krakauer

 

 

Title: Acting President

 

 

 

 

 

/s/ Roy K. Malkin

 

Roy K. Malkin

 

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EXHIBIT A
RELEASE OF ALL CLAIMS

 

This Release of All Claims (“Release”) has been signed by Roy K. Malkin
(“Executive”) on the date indicated below.

 

Background

 

A.            Employee and Minntech Corporation (“Company”), a wholly-owned
subsidiary of Cantel Medical Corp. (“Cantel”) previously entered into an
Employment Agreement, dated as of November 23, 2011 (“Agreement”), which
provides for the payment of benefits to Employee under certain circumstances
following his Termination of Employment.

 

B.            Employee’s Employment with the Company terminated/will terminate
on               , under circumstances that entitle him to payments under the
Agreement, subject to the terms thereof.

 

C.            The Company’s obligations under the Agreement are contingent on
Employee signing and providing this Release to the Company within 21 days after
receiving it and allowing this Release to become effective as provided herein.

 

D.            As a condition of receiving benefits under the Agreement, Employee
wishes to sign this Release.

 

In consideration of the premises and for other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Employee agrees as
follows:

 

Release

 

1.             If Employee (i) signs and dates this Release and submits it to
the Company not later than 21 days after it is provided to Employee,
(ii) complies with the other requirements of this Release and the Agreement, and
(iii) and does not provide written revocation of this Agreement to the Company
within the seven-day revocation period referred to in Paragraph 8, the Company
shall make the payments and pay the benefits required by the Agreement.

 

2.             In consideration of the Company’s payment obligations under this
Agreement, Employee releases and discharges the Company and Cantel, all of their
respective past and/or present divisions, affiliates, officers, directors,
shareholders, partners, trustees, employees, agents, representatives,
administrators, attorneys, insurers, fiduciaries, successors, and assigns, in
their individual and/or representative capacities (hereinafter collectively
referred to as “Released Persons”), from any and all causes of action, suits,
agreements, promises, damages, disputes, controversies, contentions,
differences, judgments, claims, and demands of any kind whatsoever (“Claims”)
that Employee and/or his heirs, executors, administrators, successors, and
assigns ever had, now have, or may have against any Released Person by reason of
his employment and/or cessation of employment with the Company or a Related
Employer, or otherwise involving facts that occurred on or before the date on
which Employee signed this Release, other than (i) a Claim that the Company has
failed to pay Employee a payment described in or contemplated by the Agreement
or has otherwise breached the terms of the Agreement, or (ii) a Claim that the
Company has failed to pay Employee any vested benefits to which he is entitled
under a plan or program of the Company or a Related Employer (collectively,
“Excluded Claims”).  Claims, other than Excluded Claims, are hereafter referred
to a “Released Claims.”  Employee gives this Release regardless of whether the
Released Claims are known or unknown.  Such Released Claims include, without
limitation, any and all Claims under Title VII of the Civil Rights Act of 1964,
the Age Discrimination in Employment Act of 1967, the Civil Rights Act of 1871,
the Civil Rights Act of 1991, the Fair Labor Standards Act, the Employee
Retirement Income Security Act of 1974, the Americans with Disabilities Act, the
Family and Medical Leave Act of 1993, and any and all other federal, state or
local laws, statutes, rules, and regulations pertaining to employment, as well
as any and all claims under state contract or tort law including, but not
limited, to those based on allegations of wrongful discharge, breach of
contract, promissory estoppel, defamation, and infliction of emotional distress.

 

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3.             Employee hereby covenants not to sue or commence or maintain any
action or proceeding against any Released Person, none of whom admit any
liability, as to any Released Claim.  Employee hereby agrees that if he
hereafter institutes or maintains an action against any Released Person with
respect to a Released Claim, and it is determined in such action that a claim or
claims brought by Employee in such action is barred by this Release, he will pay
the Released Person for all costs and expenses, including attorneys’ fees,
incurred in defending against such claims.  Employee understands that this
Release is final and binding, except as expressly provided herein.  Nothing
herein shall (i) prevent Employee from filing a charge or complaint, including a
challenge to the validity of this Agreement, with the Equal Employment
Opportunity Commission (“EEOC”), (ii) prevent Employee from participating in any
investigation or proceeding conducted by the EEOC, or (iii) establish a
condition precedent or other barrier to exercising the aforesaid rights.  While
Employee has a right to participate in any such investigation, he understands
that he is waiving his right to any monetary recovery arising from any
investigation or pursuit of a claim on his behalf.  Employee acknowledges that
he has the right to file a charge alleging a violation of the ADEA with any
administrative agency and/or to challenge the validity of the waiver and release
of any claim that he may have under the ADEA without either (i) repaying the
Company the amounts paid to him as a result of this Release or (ii) paying the
Company any other monetary amounts (such as attorneys’ fees and damages).

 

4.             Employee agrees that if this Release is ever held to be invalid
or unenforceable (in whole or in part) as to any particular type of claim or as
to any particular circumstance, it shall remain fully valid and enforceable as
to all other claims and circumstances.

 

5.             Except as permitted by paragraph 3, Employee represents that he
has not filed, and will not hereafter file, any lawsuit against any Released
Person relating to his employment and/or cessation of employment with the
Company or any Related Employer, or otherwise involving facts that occurred on
or before the date on which he signed this Release, other than with respect to
any Excluded Claim.  Employee further understands and agrees that, other than as
provided under paragraph 3, if he commences, continues, joins in, or in any
other manner attempts to assert any lawsuit released herein against a Released
Person with regard to a Released Claim, or otherwise violates the terms of this
Release, he shall be required to return all severance payments paid to him by
the Company pursuant to Employee Severance Agreement (together with interest
thereon), and he agrees to reimburse the Released Person for all attorneys’ fees
and expenses incurred by it in defending against such a lawsuit, provided that
the right to receive such payments is without prejudice to the Released Person’s
other rights hereunder.

 

6.             Employee understands and agrees that the Company’s payments to
him and the signing of this Release do not in any way indicate that he has any
viable Claims against the a Released Person or that any Released Person admits
any liability to him whatsoever.

 

7.             Employee has read this Release carefully, has been given at least
21 days to consider all of its terms, has been advised to consult with an
attorney and any other advisors of his choice, and fully understands that by
signing below he is giving up any right that he may have to sue or bring any
Claims (other than the Excluded Claims) against a Released Person.  Employee has
not been forced or pressured in any manner whatsoever to sign this Release, and
he agrees to all of its terms voluntarily.

 

8.             Employee understands that he has seven days from the date on
which he signed this Release below to revoke this Release by notifying the
Company of his revocation, that this Release will not become effective until the
eighth day following the date on which he has signed this Release, and that if
he revokes this Release within such period, Employee Severance Agreement shall
be void.

 

9.             Employee understands and agrees that this Release will be
governed by the internal laws of the State of Minnesota, without regard to
conflict of law principles, to the extent not preempted by federal law.

 

 

 

 

Date

 

(Signature)

 

 

 

 

 

 

 

 

Roy K. Malkin

 

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