Exhibit 10(b)

 

1998 DIRECTORS’ STOCK OPTION PLAN

OF

CANTEL MEDICAL CORP.

 

(As amended through March 18, 2010)

 

1.             The Plan.  The 1998 Directors’ Stock Option Plan (the “Plan”) is
intended to strengthen the ability of Cantel Medical Corp. (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 450,000.  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.

 

 

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(b)           Subject to Section 12, an Option to purchase 15,000 shares of
Stock shall be automatically granted to each person who is appointed or elected
for the first time to be a director of the Corporation.  Each Option granted
under this subsection (b) shall be exercisable in three equal annual
installments commencing on the date of the grant.  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.

 

(c)           Subject to Section 12, an Option to purchase 1,500 shares of Stock
shall be automatically 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, 2005, to each member of the Corporation’s Board serving as such on said
date.  Each Option granted under this subsection (c) 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 (c) shall be the
fair market value (as hereinafter defined) of Stock covered thereby on the date
the Option is granted.

 

(d)           Subject to Section 12, an Option to purchase 750 shares of Stock
shall be automatically granted on the last business day of each fiscal quarter,
commencing with the quarter ending April 30, 2005, 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 (d).  Each Option
granted under this subsection (d) 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”).

 

(e)           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

 

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(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; provided, however
that:

 

(v)           with respect to shares of Stock delivered to pay the Exercise
Price of an Option under Section 7(a) or the settlement of all or part of an
Option under Section 7(b), the fair market value shall be the most recent
closing price of the Stock on the largest principal securities exchange listing
the Stock immediately prior to the exercise of the Option.

 

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.

 

(a)           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 or as otherwise
approved by the Committee and (c) unless the Optionee shall have a director of
the Corporation from the date of the granting of the Option to the date of its
exercise, except as provided in Paragraph 10.  The exercise price of an Option
shall be paid in full at the time of the exercise of the Option (i) in cash (by
wire transfer or personal, certified or bank check) or (ii) by the transfer to
the Corporation of whole shares of its Stock that are already owned by the
Optionee with a fair market value determined under Section 4(e)(v) equal to the
purchase price of the Stock issuable upon exercise of such Option (or partly in
cash and partly in such Stock); provided, however, that the Corporation shall
not be required to deliver (or make available) shares of Stock with respect to
which an Option is exercised until the Corporation has confirmed the receipt of
good and available funds in payment of the Exercise Price thereof as well as any
required tax withholding obligation.  In addition to the foregoing, payment of
the Exercise Price may be made by delivery to the Corporation by the Optionee of
an executed exercise form, together with irrevocable instructions to a
broker-dealer to sell or margin a sufficient portion of the shares of Stock
covered

 

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by the Option and deliver the sale or margin loan proceeds directly to the
Company (sufficient to pay the Exercise Price and tax withholding obligation).  
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 (or an appropriate book entry
registration or electronic issuance has been made by the transfer agent) after
the exercise of the Option.

 

(b)           At or after the time of grant of an Option, the Board or the
Committee may agree (regardless of the terms set forth in the agreement
reflecting such Option grant) to authorize the settlement of all or part of any
Option by delivering to the Optionee shares of Stock having a fair market value
(determined under Section 4(e)(v)) equal to the product of the excess of the
fair market value of one share of Stock (determined under Section 4(e)(v)), over
the Option exercise price, multiplied by the number of shares of Stock with
respect to which the Optionee proposes to exercise 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

 

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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 And Stock Exchange Approval.  This Plan is subject to,
and no Options shall be exercisable hereunder until after (i) 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, and (ii) the approval by the New
York Stock Exchange, Inc. of a listing application covering the shares of Stock
covered by this Plan.

 

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) materially increase the benefits accruing to participants under the Plan,
(v) modify the requirements as to eligibility for participation in the Plan, or
(vi) make any other change to the terms of the plan which would require approval
by the stockholders pursuant to the rules and regulations of the Securities and
Exchange Commission or the listing standards and rules of the securities
exchange on which the Stock is listed.  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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