Exhibit 10.(e)

 

1998 DIRECTORS’ STOCK OPTION PLAN

OF

CANTEL MEDICAL CORP.

 

(as amended through March 24, 2005)

 

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 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.

 

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 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

 

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(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 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,

 

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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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