EXHIBIT 10(t)

SALES-BASED
RESTRICTED STOCK AGREEMENT

CANTEL MEDICAL CORP. 

2016 EQUITY INCENTIVE PLAN

 

 

THIS RESTRICTED STOCK AGREEMENT (the “Agreement”) is made effective as of this
____ day of                        , ______, (the “Grant Date”) by and between
Cantel Medical Corp., a Delaware corporation (the “Company”), and
_________________________ (the “Participant”).

 

W I T N E S S E T H:

 

WHEREAS, the Company wishes to grant a Restricted Stock Award to the Participant
for Shares of the Company’s common stock pursuant to Section 8 of the Company’s
2016 Equity Incentive Plan (the “Plan”); and

 

WHEREAS, the Committee under the Plan has authorized the grant of a Restricted
Stock Award to the Participant under the conditions specified herein;

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the parties hereto agree as follows:

 

1.Grant of Restricted Stock Award.   The Company hereby grants to the
Participant on the Grant Date set forth above a Restricted Stock Award (the
“Award”) for up to ____________ (              ) Shares of common stock of the
Company, par value $.10 per Share, on the terms and conditions set forth herein,
which Shares are subject to adjustment pursuant to Section 4(g) of the
Plan.  The Shares will be issued to the Participant for no cash
consideration.  The Company will cause the Shares to be issued in “book form”
with its transfer agent until such time as the risk of forfeiture and other
transfer restrictions set forth in this Agreement have lapsed with respect to
such Shares, at which time the Company will cause the Shares to be delivered to
the Participant.  In the alternative, in the Company’s sole discretion, the
Company will cause to be issued one or more stock certificates representing such
Shares in the Participant’s name, and will hold each such certificate (together
with a stock power duly executed in blank by the Participant) represented by the
certificate.  The Company will place a legend on such certificates describing
the risk of forfeiture and other transfer restrictions set forth in this
Agreement providing for the cancellation of such certificates if the Shares are
forfeited as provided in Section 2 below.  Until such risk of forfeiture has
lapsed or the Shares subject to this Award have been forfeited pursuant to
Section 2 below, the Participant is entitled to vote the Shares and to receive
all dividends or other distributions attributable to such Shares, but the
Participant will not have any other rights as a stockholder with respect to such
Shares.

 

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2.Vesting of Restricted Stock.

(a)Shares subject to this Award will remain forfeitable until the risk of
forfeiture lapses solely to the extent that the criteria in both parts (1) and
(2) below have been satisfied.  Any portion of the Award for which both parts
(1) and (2) below are satisfied are referred to in this Agreement as “vested.”

(1)Time-Vesting:  The Award will become vested as to one-third of the number of
Shares determined under part (2) below on each of the first through third
anniversaries of the Grant Date (each a “Vesting Date”), provided the
Participant continues in employment by or service with the Company or a
Subsidiary on each such Vesting Date.  If the percentages applicable to the
first and second Vesting Dates result in a fractional number of Shares, such
number will be rounded down to the nearest whole number.  The percentage
applicable to the third Vesting Date will be interpreted, if appropriate, as
denoting all remaining unvested Shares subject to this part (1).     

(2)Performance Vesting:  Dependent upon the level of the Company’s achievement
of its Sales Target for the Company’s fiscal year ending July 31, [2017], as
specified below, and (subject to a minimum 1-year gross margin percentage
threshold described below), a percentage of the number of Shares subject to this
Award will become eligible for time-vesting under part (1) above.  If the
percentages applicable to any threshold below result in a fractional number of
Shares, such number will be rounded to the nearest whole number.

For purposes of the schedule below, the Sales Target for the Company’s fiscal
year ending July 31, [2017] will be $______________, and the minimum 1-year
gross margin percentage threshold will be ______________.

Level of achievement of Company’s Sales Target for Company’s fiscal year ending
July 31, 2017

Percentage of Shares Eligible for Vesting under Part (1) Above

Less than 95% of Sales Target or failure to achieve minimum 1-year gross margin
percentage threshold

0 Shares

At least 95%, but less than 100%, of Sales Target

Between 50% and 99%, ratably, of Shares

100%, of Sales Target

100% of Shares

More than 100%, but less than 105%, of Sales Target

Between 100% and 199%, ratably, of Shares

105% or more of Sales Target

200% of Shares

Based on the percentile achievement of Sales Target and achievement of the
minimum 1-year gross margin percentage threshold, the final number of Shares
earned under the Award will be determined and adjusted as follows:  If the final
number of Shares subject to the Award is lower than the number of Shares issued
on the Grant Date, the excess number of Shares will be forfeited (which would be
all of the Shares if 95% of the Sales Target or the minimum gross margin

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percentage threshold is not achieved).  However, if such final number of Shares
is higher than the number of Shares issued on the Grant Date, then additional
Shares will be added to the Award as necessary to satisfy the full Award earned
in accordance with the above chart.

(b)Subject to the provisions of paragraphs (e) and (f) below, if the
Participant’s employment by or service with the Company and its Subsidiaries
terminates, other than by reason of the Participant’s death or Disability, so
that the Participant is no longer providing services to the Company or any of
its Subsidiaries at any time prior to a Vesting Date, the Participant will
immediately forfeit all Shares subject to this Award which have not yet vested
and for which the risk of forfeiture has not lapsed.

(c)If the Participant’s employment by or service with the Company and its
Subsidiaries terminates as a result of the Participant death after the end of
the 1-year performance period, the number of Shares subject to this Award will
initially be determined under paragraph (a)(2) above as of the end of the 1-year
performance period and the unvested portion (as of the date of the Participant
termination of service) of such Shares immediately will become vested and no
longer subject to any risk of forfeiture.  If the Participant’s employment by or
service with the Company and its Subsidiaries terminates as a result of the
Participant death before the end of the 1-year performance period, the number of
Shares subject to this Award will be determined under paragraph (a)(2) above as
if the Sales Target and the minimum 1-year gross margin percentage threshold had
been achieved, and such Shares immediately will become vested and no longer
subject to any risk of forfeiture. 

(d)If the Participant’s employment by or service with the Company and its
Subsidiaries terminates as a result of the Participant Disability, the number of
Shares subject to this Award will initially be determined under paragraph (a)(2)
above as of the end of the 1-year performance period and any previously unvested
portion of such Shares that would have vested during the 12-month period
following the date of the Participant termination of service but for the
cessation of the Participant’s employment by or service with the Company or a
Subsidiary immediately will become vested and no longer subject to any risk of
forfeiture.  If the Participant’s employment by or service with the Company and
its Subsidiaries terminates as a result of the Participant’s Disability before
the end of the 1-year performance period, the number of Shares subject to this
Award will be determined under paragraph (a)(2) above as if the Sales Target and
the minimum 1-year gross margin percentage threshold had been achieved, and the
portion of such Shares that would have vested during the 12-month period
following the date of the Participant’s termination of service but for the
cessation of the Participant’s service with the Company or a Subsidiary
immediately will become vested and no longer subject to any risk of
forfeiture.  In either instance, such additional vesting will occur only if the
Participant continues to comply with any restrictive covenants applicable to the
Participant by Company policy or by specific agreement.

           (e)         (1)       If a Change in Control occurs during the first
half of the 1-year performance period, the Shares determined under paragraph
(a)(2)

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will be 100% of the Shares as if the Sales Target and the minimum 1-year gross
margin percentage threshold were achieved. 

(2)       If a Change in Control occurs during the second half of the 1-year
performance period, the Shares determined under paragraph (a)(2) will be based
upon actual results for completed quarters on or before the Change in Control,
compared to the prorated Sales Target, and further assuming that the minimum
1-year gross margin percentage threshold was achieved.  

(3)       Notwithstanding the preceding, the Shares determined under paragraphs
(e)(1) or (e)(2), as the case may be, will become fully vested if:  (i) the
continuing entity fails to assume the Award; (ii) the Participant’s employment
or service is terminated for any reason other than Cause (as defined in the
Participant’s employment agreement or applicable severance agreement or policy)
within 12 months following the Change in Control; or (iii) the Participant is
permitted under the Participant’s employment agreement or an applicable
severance policy to terminate the Participant’s employment for good reason and
does so within 12 months following the Change in Control. 

(4)       This paragraph (e) applies only if the Participant was employed by the
Company or one of its Subsidiaries at the time of the Change in Control.

(f)The foregoing provisions (c)-(e) are subject to the terms of the Plan and any
other Benefit Plan that covers the Participant to the extent such Benefit Plan
provides for accelerated vesting of Restricted Stock.

(g)The Committee, in its discretion, may accelerate vesting of all or any
portion of the Shares subject to this Award except to the extent such
acceleration would adversely affect the deductibility of the Award under Section
162(m) of the Internal Revenue Code of 1986 (as amended) (the “Code”).

3.          General Provisions.

(a)        Employment or other Relationship.  This Agreement does not confer on
the Participant any right with respect to the continuance of employment or any
other relationship with the Company or any Subsidiary, nor will it interfere in
any way with the right of the Company or such Subsidiary to terminate such
employment or other relationship.  

(b)        Tax Withholding.  To permit the Company to comply with applicable
federal and state tax laws or regulations, the Company may take such action as
it deems appropriate to ensure that all federal and state payroll, income or
other taxes required to be withheld by the Company with respect to the Award
made hereunder (the “Required Withholdings”) are so withheld.  If the Company is
unable to withhold the same, the Participant agrees:  (i) to pay the Required
Withholdings to the Company promptly upon demand therefor, and (ii) that if the
Participant fails to do so, the Company, in its sole discretion, may either
unilaterally transfer into

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its own name from any certificates representing vested Shares subject to the
Award being held by the Company, the least number of Shares having a Fair Market
Value not less than the amount of the Required Withholdings, unilaterally reduce
any other compensation due to the Participant in the amount of the Required
Withholdings or any combination of the preceding such that the Required
Withholdings are satisfied.

(c)        2016 Equity Incentive Plan.  The Award evidenced by this Agreement is
granted pursuant to the Plan, a copy of which Plan has been made available to
the Participant and is hereby incorporated into this Agreement.  This Agreement
is subject to and in all respects limited and conditioned as provided in the
Plan including, but not limited to, any provisions relating to the retroactive
amendment of Award Agreements and the “clawback” or repayment of amounts already
received in the event of a financial restatement affecting the Company.  All
defined terms of the Plan have the same meaning when used in this
Agreement.  The Plan governs this Award and, subject only to clause (d) below
(Construction), in the event of any questions as to the construction of this
Agreement or in the event of a conflict between the Plan and this Agreement, the
Plan governs, except as the Plan otherwise provides.

(d)        Construction.  Except as otherwise expressly set forth herein, the
terms used in this Agreement that are defined in the Plan have the same meanings
as in the Plan.  If the Award was granted to the Participant under the Company’s
Long Term Incentive Plan, another Benefit Plan of the Company or is otherwise
expressly subject to a Benefit Plan of the Company which covers the Participant,
such as an employment or severance agreement, the Award also will be subject to
the terms of such Benefit Plan.  This Agreement, the Plan and the Benefit Plans
will be construed in a consistent manner.  In the event of conflict between the
terms and conditions of this Agreement, the Plan and any of the Benefit Plans,
the order of precedence will be as follows:  (i) any Benefit Plan that
constitutes an employment or severance agreement; (ii) any Benefit Plan that
constitutes a long term incentive plan or other plan which covers equity awards
issued under the Plan; (iii) the Plan; and (iv) this Agreement.

(e)        Non-Assignability of Shares.  Except as may be permitted under
Section 16(a) of the Plan, the Participant may not give, grant, sell, exchange,
transfer legal title, pledge, assign or otherwise encumber or dispose of the
Shares, other than by will or the laws of descent and distribution, prior to
vesting of the Shares in accordance with the terms of this Agreement.

(f)        Securities Laws.  The Participant agrees for the Participant, the
Participant’s heirs and the Participant’s legatees not to sell or otherwise
transfer any and all Shares subject hereto except in compliance with the
applicable provisions of the Securities Act of 1933, as amended from time to
time (the “Act”) and any other applicable legal requirements.  Further, the
Participant agrees that if the Participant’s sale of the Shares is at any time
not covered by an effective registration statement under the Act (it being
agreed that the Company will use its commercially reasonable best efforts to
cause a registration statement (so long as such registration statement may be
filed on Form S-8 or any substantially similar successor form) to be in effect
during any period in which the same may be required in order to permit the
Participant to sell the Shares in the public market), the Company may require
the Participant to make such representations and agreements and furnish such
information, and the Company may take such additional actions, in each case, as
the Company may in its reasonable discretion deem

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necessary or desirable to assure compliance by the Company, on terms acceptable
to the Company, with the provisions of the Act and any other applicable legal
requirements including, but not limited to, the placing of a “stop transfer”
order with respect to such Shares with its transfer agent or the placing of an
appropriate restrictive legend on the certificate(s) evidencing such Shares in
substantially the following form:

“The sale of the securities represented by this certificate has not been
registered under the Securities Act of 1933, and may not be sold or transferred
in the absence of an effective Registration Statement covering such sale or
transfer 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.”

 

(g)        Binding Effect.  This Agreement, the Plan and, to the extent
applicable, a Benefit Plan, constitute the entire understanding between the
Participant and the Company regarding this Award.  Any prior agreements,
commitments or negotiations concerning this Award are superseded.  This
Agreement will bind and inure to the benefit of the parties and their permitted
successors and assigns.  By signing this Agreement, the Participant agrees to
all of the terms and conditions described in this Agreement and in the Plan. 

(h)        Data Privacy.    In order to administer the Plan, the Company may
process personal data about the Participant.  Such data includes but is not
limited to the information provided in this Agreement and any changes thereto,
other appropriate personal and financial data about the Participant such as home
address and business addresses and other contact information, payroll
information and any other information that might be deemed appropriate by the
Company to facilitate the administration of the Plan.  By accepting this
Restricted Stock Award, the Participant gives explicit consent to the Company to
process any such personal data and also gives explicit consent to the Company to
transfer any such personal data to transferees and other persons designated by
the Company to assist in administering the Plan.

(i)         Code Section 162(m).  If the Participant is a “covered employee” as
defined under Code Section 162(m), the Award under this Agreement is intended to
meet the requirements of Code Section 162(m) and will be interpreted and
administered accordingly.

(j)         Clawback.  The Award under this Agreement is subject to the
Company’s Executive Compensation Clawback Policy as it may be amended or
supplemented from time to time, as well as to Section 954 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act (regarding recovery of erroneously
awarded compensation) and any implementing rules and regulations thereunder and
to similar rules and regulations under the laws of any other jurisdiction, all
to the extent determined by the Committee in its discretion to be applicable to
the Participant.

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(k)        Governing Law.  This Agreement will 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.  Use of the
masculine or feminine genders includes, as applicable, the neuter gender.

(l)         Counterparts.  This Agreement may be executed in duplicate
counterparts, each of which when so executed will be deemed to be an original
and both of which when taken together will constitute one and the same
instrument.  Either party may execute this Agreement by facsimile or electronic
signature.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

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ACCORDINGLY, the parties hereto have caused this Agreement to be executed
effective as of the day and year first above written.

 

 

 

 

 

 

 

CANTEL MEDICAL CORP.

 

 

 

 

 

 

By:

 

 

 

Its:

 

 

 

You are required to sign this Agreement at the space provided below and return
the signed Agreement to [_________] at the Company by [____________].  Failure
to sign and return this Agreement to [_________] by such date may, in the sole
discretion of the Company and without notice to you, cause the Restricted Stock
Award to become null and void.  By signing this Agreement, you agree to all of
the terms and conditions described above and in the Plan.

 

ACKNOWLEDGED AND ACCEPTED

 

 

___________________________________

Participant

 

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