Exhibit 10.2


 


EXECUTIVE SEVERANCE AGREEMENT


 


This Executive Severance Agreement (“Agreement”) is
entered into, effective as of January 1, 2010, by and between Seth R.
Segel (“Executive”) and Cantel Medical Corp. (“Company”).


 


Background


 


A.            The Company considers the establishment and
maintenance of a sound and vital management to be essential to protecting and
enhancing the best interests of the Company and its shareholders.  The Company believes that, to attract and retain
experienced and valuable key executive employees, it is important and prudent
to provide such executives with fair compensation should their employment be
terminated under certain circumstances, including but not limited to change in
control situations.


 


B.            The Company wishes to encourage the Executive to
devote his full time and attention to the performance of his management
responsibilities and to assist the Board of Directors and other management
employees in evaluating business options and pursuing the best interests of the
Company’s shareholders without being influenced by the uncertainty of his own
employment situation.


 


In consideration of the
premises, the Executive’s employment by the Company on an at-will basis, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Executive and the Company agree as follows:


 


Agreement


 


1.             Defined
Terms.  Throughout this Agreement,
when the first letter of a word (or the first letter of each word in a phrase)
is capitalized, the word or phrase shall have the meaning specified in Appendix
A (beginning on page 13)


 


2.             Term.  This initial term of this
Agreement shall commence as of January 1, 2010, and shall continue through
July 31, 2011; provided, however, that beginning on August 1, 2010,
and on the first day of each following August, the term of this Agreement shall
automatically be extended by one year, unless either the Company or the
Executive shall have provided notice to the other at least six (6) months
before such date that the term shall not be extended.  Notwithstanding the preceding provisions of
this Section, (i) if a Change in Control occurs during the term of this
Agreement, such term (other than with respect to the provisions of Section 4)
shall not end before the second anniversary of the Change in Control; provided,
however, this sentence shall apply only to the first Change of Control while
this Agreement is in effect; and (ii) termination of this Agreement shall
not affect the obligations of the Company hereunder on account of the Executive’s
Termination of Employment during the Term.


 


3.             Termination
of Employment; Resignation of Officer and Director Positions.  The Executive is an at-will employee.  The Company may Terminate the Executive’s
Employment at any time, for any reason whatsoever or for no reason, subject to
its payment obligations under this Section and, if applicable, Section 4
or 5.  The Executive may voluntarily
Terminate his Employment at any time by providing at least twenty (20) days’
prior notice to the 


 

















 


Company.  Regardless of whether
the Executive’s Termination of Employment is voluntary or involuntary, the
Executive shall resign from any and all of his director positions and offices
with the Company and each Related Employer, effective as of his Termination
Date.  Upon Termination of Employment,
the Executive shall be entitled to the following, in addition to any benefits
payable under Section 4 or 5:


 


(a)           Any earned but unpaid base
salary through his Termination Date, plus any accrued and unused paid time off
(PTO) due to the Executive under the Company’s PTO program through his
Termination Date, which amounts shall be paid to the Executive not later than
the payment date for the payroll period next following his Termination Date.


 


(b)           Provided that the Executive
applies for reimbursement in accordance with the Company’s established
reimbursement procedures (within the period required by such procedures but
under no circumstances later than ninety (90) days after his Termination Date),
the Company shall pay the Executive any reimbursements to which he is entitled
under such procedures not later than the payment date for the payroll period
next following the date on which the Executive applies for reimbursement.


 


(c)           Any benefits (other than
severance) payable to the Executive under any of the Company’s cash or equity
incentive compensation plans and employee benefit plans or programs
(collectively, “Benefit Plans”), to the extent not provided for herein, shall
be payable in accordance with the provisions of those plans or programs. To the
extent that the terms herein conflict with the terms of the Benefit Plans, the
terms herein shall be deemed to supersede those of the Benefit Plans.


 


4.             Non-Change
of Control Severance and Other Benefits.


 


(a)           Subject to (i) the
Executive’s timely filing of a duly executed Release in accordance with Section 18,
(ii) such Release becoming effective and irrevocable in accordance with
its terms not later than sixty (60) days after the Executive’s Termination of
Employment, (iii) the provisions of this Section 4, and (iv) the
limitations provided in Section 9, the Company shall provide the Executive
with the payments and benefits set forth in this Section, if at any time during
the Term other than during a Change in Control Coverage Period either (i) the
Company Terminates the Executive’s Employment (other than a termination for
Cause, Unacceptable Performance, Disability, or death pursuant to Section 7),
or (ii) the Executive voluntarily Terminates his Employment for Adequate
Reason pursuant to Section 8. 
Notwithstanding the preceding provisions of this Subsection, the
Executive shall not be entitled to benefits pursuant to this Section 4, if
he is entitled to benefits pursuant to Section 5.


 


(b)           As soon as administratively
feasible (and not more than ten (10) days) after the Company’s receipt of
the duly executed Release, and the Release becoming effective and irrevocable,
the Company shall pay to the Executive a single lump sum payment equal to the
product of (i) the Executive’s Monthly Base Salary Rate as of his
Termination Date multiplied by (ii) 12. 
For purposes of determining the Executive’s Monthly Base Salary Rate
pursuant to the preceding sentence, any reduction to the Executive’s salary
during the six-month period preceding his Termination of Employment shall be
disregarded.


 


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(c)           If the Termination Date of
an Executive occurs subsequent to the last day of a Fiscal Year for which the
Executive has not been paid his Bonus, then the Executive shall be entitled to
his full Bonus for such Fiscal Year to the extent otherwise earned under the
terms of the Bonus Plan for such Fiscal Year (as if the Executive’s employment
had not been Terminated). Such amount shall be paid to the Executive not later
than seventy five (75) days following the close of such Fiscal Year.  Amounts payable under this Subparagraph (c) will
be deemed payments attributable to Executive’s employment prior to or on the
Termination Date and not as severance.


 


(d)           The Company shall pay to the
Executive a pro-rata Bonus for the Fiscal Year in which the Termination Date
occurs, determined by multiplying (i) the amount of the Executive’s full
Bonus for such Fiscal Year to the extent otherwise earned under the terms of
the Bonus Plan for such Fiscal Year as in effect immediately prior to the
Termination Date by (ii) a fraction, (A) the numerator of which is
the number of full or partial months since the end of the prior Fiscal Year in
which the Executive has been employed by the Company, and (B) the
denominator of which is 12.  Such amount
shall be paid to the Executive not later than seventy five (75) days following
the close of such Fiscal Year. 
Notwithstanding the forgoing, if no Bonus Plan has been finalized (i.e.,
approved by the Compensation Committee and disseminated to the Executive) for
such Fiscal Year either prior to the commencement of such Fiscal Year or within
three months following the commencement of such Fiscal Year, then the Bonus for
such Fiscal Year payable under this Subparagraph (d) will be determined in
accordance with the first sentence of Section 5(b)(2) (as if the pro
rata Bonus payment under that Section was required). Amounts payable under
this Subparagraph (d) will be deemed payments attributable to Executive’s
employment prior to or on the Termination Date and not as severance.


 


(e)           In
the event such termination occurs
prior to the full vesting of stock options
and restricted stock held by the participant (i.e., the options becoming exercisable
in their entirety and the restricted stock ceasing to have any risks of
forfeiture), then, effective as of the Termination Date, the vesting of the
annual installment of such options and restricted stock that would be
due to vest on the first vesting date following the Termination Date shall
accelerate on a pro rata basis based on the number of days elapsed from the
prior vesting date of such options and restricted stock to and including the
Termination Date.


 


(f)            If the Executive 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
Company’s medical plan, the Company shall pay the premiums for such coverage
(or reimburse the Participant for such premiums) for the twelve (12) month
period following the Executive’s Termination of Employment (or such shorter
period during which such person is eligible for Continuation Coverage).  Such payments or reimbursements shall
constitute taxable income of the Executive to the extent required by law.


 


(g)           The Company shall pay the
cost of outplacement services incurred by the Executive during the twelve (12)
month period following his Termination of Employment and provided by a firm of
the Executives’ choice, up to a total of Twenty Thousand Dollars
($20,000).  Payment for outplacement
expenses shall be made by the Company promptly following the Company’s receipt
of appropriate invoices documenting such expenses.


 


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(h)           Notwithstanding the
preceding provisions or any other provisions herein to the contrary, if the
Executive’s Employment is Terminated during a Change in Control Coverage
Period, either by the Executive for Adequate Reason or Good Reason or by the
Company for any reason other than for Cause or death, then the Executive shall
be entitled to the payments and benefits that would have been provided to him
pursuant to Section 5 if the Company had Terminated his Employment without
Cause during a Change in Control Coverage Period (reduced by any payments or
benefits provided to him pursuant to this Section 4).  In such a case, the Executive shall not be
required to execute an additional Release, and any Release requirement
specified in Section 5 shall be deemed satisfied on the Change in Control
Date.


 


(i)            Notwithstanding the
preceding provisions of this Section, if the Executive is a “specified employee”
within the meaning of Code Section 409A(a)(2)(B)(i) the Company shall
promptly deliver written notice to the Executive advising him of the
application of such Code Section and, to the extent required by such Code
Section, payments otherwise required by this Section shall be delayed to
the earliest date on which such payments are permitted.  Interest shall accrue on unpaid amounts
delayed under this subparagraph at the prime rate from time to time in effect
at the JP Morgan Chase Bank of New York or any successor bank commencing from
the date that such amounts would otherwise have been due under the applicable provision.


 


5.             Change of
Control Severance and Other Benefits.


 


(a)           Subject to (i) the
Executive’s timely filing of a duly executed Release in accordance with Section 18,
(ii) such Release becoming effective and irrevocable in accordance with
its terms not later than sixty (60) days after the Executive’s Termination of
Employment, (iii) the provisions of this Section 5, and (iv) the
limitations provided in Section 9, the Company shall provide the Executive
with the payments and benefits set forth in this Section, if during a Change in
Control Coverage Period, (A) the Company Terminates the Executive’s
Employment (other than a termination for Cause or death pursuant to Section 7),
or (B) the Executive voluntarily Terminates his Employment for Adequate
Reason or Good Reason pursuant to Section 8.  Amounts payable pursuant to this Section shall
be subject to the limitations and reimbursement expressly provided in this
Agreement.


 


(b)           As soon as administratively
feasible (and not more than five (5) business days) after the Company’s
receipt of the duly executed Release, and the Release becoming effective and
irrevocable in accordance with its terms, the Company shall pay to the
Executive a single lump sum payment in an amount equal to the sum of the
following:


 


(1)           the product of (i) two (2) times
(ii) the sum of (A) the Executive’s Annual Base Salary, at the
greater of the rate in effect on the Change in Control Date or the Termination
Date (disregarding any reduction in the rate of the Executive’s salary during
the six-month period immediately preceding his Termination of Employment), plus
(B) the greater of (I) 50% of the amount determined under clause (A) or
(II) the average of the annual Bonuses paid to the Executive for the two
Fiscal Years preceding the year in which the Executive’s Employment is
Terminated.  Amounts payable under this
Subparagraph (b)(1) will deemed severance.


 


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(2)           a pro-rata Bonus amount,
determined by multiplying (i) the greater of (A) 50% of the amount
determined under clause (A) of the preceding Subparagraph (b)(1) or (B) the
average of the annual Bonuses paid to the Executive for the two years Fiscal
Years preceding the year in which the Executive’s Employment is Terminated, by (ii) a
fraction, (A) the numerator of which is the number of full or partial
months since the end of the prior Fiscal Year in which the Executive has been
employed by the Company, and (B) the denominator of which is 12.  However, if the Executive did not receive his
annual Bonus under a Bonus Plan for such prior Fiscal Year, then the numerator
shall be the number of full or partial months since the beginning of the prior
Fiscal Year in which the Executive has been employed by the Company. Amounts
payable under this Subparagraph (b)(2) will be deemed payments
attributable to Executive’s employment prior to or on the Termination Date and
not as severance.


 


(c)           If the Executive 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
Company’s medical plan, the Company shall pay the premiums for such coverage
(or reimburse the Participant for such premiums) for the twenty-four (24) month
period following the Executive’s Termination of Employment (or such shorter
period during which such person is eligible for Continuation Coverage).  Such payments or reimbursements shall
constitute taxable income of the Participant to the extent required by law.


 


(d)           For the twenty-four (24)
month period following the Executive’s Termination of Employment, the Company
shall continue to provide term life insurance coverage substantially the same
as that provided for the Executive immediately before his Termination Date (if
any).


 


(e)           The Company shall pay the
cost of outplacement services incurred by the Executive during the twelve (12)
month period following his Termination of Employment and provided by a firm of
the Executives’ choice, up to a total of Twenty Thousand Dollars
($20,000).  Payment for outplacement
expenses shall be paid directly by the Company promptly following the Company’s
receipt of appropriate invoices documenting such expenses.


 


(f)            To the extent that coverage
or benefits under Subsection (c), (d), or (e) result in taxable income to
the Executive, the Company shall reimburse the Executive for any taxes payable
on account of such coverage, so that the Executive is in the same after-tax
position in which he would have been had such reimbursements not been taxable.  The Company shall pay the reimbursement
required by the preceding sentence as soon as administratively practicable
after the Executive demonstrates payment of the related taxes and not later
than the last day of the calendar year following the calendar year in which
such taxes are paid.


 


(g)           Notwithstanding the
preceding provisions of this Section, if the Executive is a “specified employee”
within the meaning of Code Section 409A(a)(2)(B)(i), the Company shall
promptly deliver written notice to the Executive advising him of the
application of such Code Section and to the extent required by such Code
Section, payments otherwise required by this Section shall be delayed to
the earliest date on which such payments are permitted. Interest shall accrue
on unpaid amounts delayed under this subparagraph at the prime rate from time
to 


 


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time in effect at the JP Morgan Chase Bank of New York or any successor
bank commencing from the date that such amounts would otherwise have been due
under the applicable provision.


 


6.             Provisions
Relating to Parachute Payments.  If payments and
benefits to or for the benefit of the Executive, whether pursuant to this
Agreement or otherwise, would result in total Parachute Payments to the Executive
with a value equal to or greater than one hundred percent (100%) of the
Parachute Payment Limit, the Executive may, in his sole discretion, elect to
reduce the amount payable pursuant to Section 5(b) so that the value
of all Parachute Payments to the Executive, whether or not made pursuant to
this Agreement, is equal to the Parachute Payment Limit minus One Dollar
($1.00).


 


7.             Termination
of Employment by the Company for Cause, Unacceptable Performance, Disability,
or Death.


 


(a)           The Company may cause a
Termination of the Executive’s Employment for Disability at any time.  To do so, the Board must provide the
Executive with a notice of termination specifying the Termination Date and the
circumstances constituting Disability.


 


(b)           Company may cause a Termination
of the Executive’s Employment for Unacceptable Performance at any time during
the Term other than during a Change in Control Coverage Period. To do so, the
Board must provide the Executive with a notice of termination specifying the
Termination Date and the specific act(s) or failure(s) constituting
Unacceptable Performance.  If the Board’s
notice identifies an act or failure constituting Unacceptable Performance, it
shall be accompanied by a resolution duly adopted by not less than two-thirds
(2/3) of the entire membership of the Board and, if the act of failure  is subject to correction under the definition
of Unacceptable Performance and related definitions in this Agreement, the
notice shall also specify the period during which the act or failure must be
corrected, which in no event shall be less than thirty (30) days.  If the Board reasonably determines that the
Executive has not corrected the act or failure in all material respects within
the required correction period, the Board must then provide a second notice of
termination stating the reasons for the termination and the Termination Date,
and the Executive’s Employment shall terminate on such date.


 


(c)             The Company may cause a
Termination of the Executive’s Employment for Cause at any time.  To do so, the Board must provide the Executive
with a notice of termination specifying the Termination Date and the specific
act(s) or failure(s) constituting Cause.  If the Board’s notice identifies an act or
failure constituting Cause, it shall be accompanied by a resolution duly
adopted by not less than three-quarters (3⁄4) of the entire membership of the
Board (after reasonable notice to the Executive and an opportunity for the
Executive, together with legal counsel, to be heard by the Board), finding, in
the reasonable opinion of the Board, that one or more of the events of Cause
has occurred and specifying the details thereof.  If the act or failure constituting Cause is
subject to correction under the definition of Cause and related definitions in
this Agreement, the notice shall also specify the period during which the act
or failure must be corrected, which in no event shall be less than thirty (30)
days.  If the Board acting in good faith
determines that the Executive has not corrected the act or failure in all
material respects within the required correction period, the Board must then
provide a 


 


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second notice of termination stating the reasons for the termination
and the Termination Date, and the Executive’s Employment shall terminate on
such date.


 


(d)             If the Executive dies before
Termination of Employment, his Employment shall terminate automatically on the
date of his death.


 


(e)             In the case of a Termination
of Employment for Cause or Unacceptable Performance pursuant to this Section,
the Executive shall not be entitled to benefits or payments pursuant to Section 4
or 5; provided, however, if the Company causes a Termination of the Executive’s
Employment for Unacceptable Performance and the Termination Date of such
termination occurs during a Change in Control Coverage Period, then such
termination shall be deemed a Termination of the Executive’s Employment “other
than a termination for Cause” under Section 5(a) and thereby obligate
the Company to provide the Executive with the payments and benefits set forth
in Section 5.


 


(f)              In the case of a Termination
of Employment due to Disability or death pursuant to this Section, the Company
shall continue to pay to the Executive, if living, or other person or persons
as the Executive may from time to time designate in writing as the beneficiary
of such payments, the Base Salary in effect at the time which such Disability
or death occurred, during the three-month period following such Disability or
death.  Except for such Base Salary, the
Company shall have no further obligation pursuant to this Section.


 


8.             Resignation
by Executive for Adequate Reason or Good Reason.  If an event of Adequate Reason or Good Reason
occurs during the Term, the Executive may, at any time within the ninety (90)
day period following such event, provide the Company with a notice of
termination specifying the event of Adequate Reason or Good Reason and
notifying the Company of his intention to Terminate Employment upon the Company’s
failure to correct the event of Adequate Reason or Good Reason within thirty
(30) days following receipt of the Executive’s notice of termination.  If the Company fails to correct the event of
Adequate Reason or Good Reason and provide the Executive with notice of such
correction within such thirty (30) day period, the Executive’s Employment shall
terminate as of the end of such period, and the Executive shall be entitled to
benefits as provided in Section 3 and Section 4 or 5, as applicable.


 


9.             Limitation
on Payments and Benefits.  Notwithstanding
any other provision of this Agreement, payments pursuant to this Agreement
shall be subject to the following limitations:


 


(a)           No payment (other than a
payment pursuant to Section 3) shall be made pursuant to this Agreement
until the Release has become effective according to its terms.


 


(b)           If the Executive
intentionally and materially breaches any provision of the Confidentiality and
Non-Competition Agreement, and fails to cure such breach (if curable) within
thirty (30) days, he shall promptly repay to the Company any and all severance
amounts previously paid to him pursuant to Section 4 and/or 5, and he
shall have no further rights pursuant to this Agreement.


 


(c)           Payments hereunder shall be
limited to the extent provided in Section 6.


 


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10.           No
Obligation to Mitigate.  The Executive
shall not be required to mitigate the amount of any payment or benefits
provided for under Section 4 or 5 by seeking other employment or
otherwise, and the amount of any payment or benefits provided for under Section 4
or 5 shall not be reduced by any payments or benefits received by the Executive
as the result of employment by another employer after the Termination Date, or
otherwise; provided, however, that the amount payable under Section 4 or 5
shall be reduced by the amount of any severance, termination, or notice pay (or
any other similar amounts) required by law to be paid to the Executive by the
Company or its subsidiaries and by any salary or other amounts paid to the
Executive during any notice period that the Company or its subsidiaries is
required by law to provide.


 


11.           Withholding
and Taxes.  The Company may
withhold from any payment made hereunder (i) any taxes that the Company
reasonably determines are required to be withheld under federal, state, or
local tax laws or regulations, and (ii) any other amounts that the Company
is authorized to withhold.  Except for
employment taxes that are the obligation of the Company, the Executive shall
pay all federal, state, local, and other taxes (including, without limitation,
interest, fines, and penalties) imposed on him under applicable law by virtue
of or relating to the payments and/or benefits contemplated by this Agreement,
subject to any reimbursement provisions of this Agreement.


 


12.           Indemnification.  The Executive shall continue
to be entitled to any rights to insurance and indemnification under the Company’s
or a Related Employer’s directors and officers liability insurance (“D&O
Insurance”), Certificate of Incorporation, and Bylaws, as in effect before the
earlier of the Executive’s Termination of Employment or a Change in Control (or
rights to insurance and indemnification that are substantially the same
thereto), with respect to any claims relating to the period before his
Termination Date.  Additionally, any and
all D&O Insurance policies obtained by the Company or a Related Employer
following the Termination Date that are “claims made” polices shall cover the
Executive to the same extent as other former officers of the Company.


 


13.           Default in
Payment.  Any payment not made within
ten (10) days after it is due in accordance with this Agreement shall
thereafter bear interest, compounded quarterly, at 5% above the prime rate from
time to time in effect at the JP Morgan Chase Bank of New York or any successor
bank.


 


14.           Effect on
Other Plans, Agreements, and Benefits.  Except to the
extent expressly set forth herein, any benefit or compensation to which the
Executive is entitled under any agreement between the Executive and the Company
or any of its subsidiaries or under any plan maintained by the Company or any
of its subsidiaries in which the Executive participates or participated shall
not be modified or lessened in any way, but shall be payable according to the
terms of the applicable plan or agreement. The terms of this Agreement shall
supersede and terminate any prior change in control and/or severance agreement,
and the provisions of any other agreement providing benefits following a change
in control or termination of employment, entered into between the Executive and
the Company or any subsidiary thereof. 
Notwithstanding the above, any severance benefits received by the
Executive pursuant to this Agreement shall be in lieu of any severance benefits
to which the Executive would otherwise be entitled under any general severance
policy maintained by the Company or the relevant subsidiary for its 


 


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management personnel or under any employment contract between the
Executive and the Company or any subsidiary thereof.  Any and all employment agreements between the
Company and the Executive, inclusive of provisions that in accordance with the
terms of such agreements survive termination, are hereby terminated and void.


 


15.           Unsecured
Obligation.  All rights of
the Executive or any beneficiary of the Executive who succeeds to the Executive’s
rights to payments or benefits under this Agreement shall at all times be
entirely unfunded and no provision shall at any time be made with respect to
segregating any assets of the Company or payment of any amounts due
hereunder.  Neither the Executive nor any
such beneficiary shall have any interest in or rights against any specific
assets of the Company or any of its subsidiaries, and the Executive and any
such beneficiary shall have only the rights of a general unsecured creditor of
the Company.


 


16.           Prohibition
Against Assignment.  The Executive
may not assign, pledge, anticipate, or transfer any benefit or amount payable
hereunder (other than benefits payable upon or following his death), and any
attempt to assign, pledge, anticipate, or transfer such and benefit or amount
hereunder, whether voluntary or involuntary, shall be null and void.


 


17.           Successors.


 


(a)           The Company shall require
any successor (whether direct or indirect, by purchase, merger, consolidation,
or otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance satisfactory to the Executive, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.  Failure of
the Company to obtain such agreement before the effectiveness of any such
succession shall be a material breach of this Agreement.  As used in this Agreement, “Company” shall
mean the Company as hereinbefore defined, and any successor to its business
and/or assets as aforesaid that executes and delivers the agreement provided
for in this Subsection or otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.


 


(b)           This Agreement shall inure
to the benefit of and be enforceable by the Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, and legatees.  If the Executive
should die while any amounts would still be payable to him hereunder if he had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Executive’s devisee,
legatee, or other designee or, if there be no such designee, to the Executive’s
estate.


 


18.           Release.  In consideration of the
Company’s promises and covenants and the performance thereof, the Executive
agrees that the Company’s payment obligations under Sections 4 and 5 shall be
conditioned on the Executive’s release of the Company and all other persons
named in the Release from any and all causes of causes of action that the
Executive 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 I.  For the Release to be effective, the
Executive (or his representative or agent) must have provided a signed version
of the Release to the Company and such Release 


 


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shall have become effective and irrevocable by its terms within sixty
(60) days after the Executive’s Termination of Employment.


 


19.           Disputes.


 


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


 


(b)           Any dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration in Little Falls, New Jersey by three arbitrators, one of whom
shall be appointed by the Company, one of whom shall be appointed by the
Executive, and the third of whom shall be appointed by the first two
arbitrators.  If either the Company or
the Executive 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 Newark, New
Jersey, 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 the Executive
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.


 


(c)           The Company shall pay all
reasonable out-of-pocket expenses, including reasonable legal fees and legal
expenses, incurred by the Executive 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 the
Executive) for any such expense as soon as administratively practicable after
the Executive demonstrates evidence that such expense have been incurred and
not later than thirty (30) days following the Executive’s submission of such
expenses to the Company with a request for reimbursement.


 


20.           Miscellaneous
Provisions.


 


(a)           Entire
Agreement. 
This Agreement contains the entire agreement and understanding of the
parties regarding the transactions contemplated herein and supersedes all prior
agreements, arrangements, or understandings, whether written or oral, relating
to the subject matter hereof, including, without limitation, any letters,
agreements, or understandings between the Executive and the Company or any
subsidiary thereof before the date hereof. 
By entering into this Severance Agreement, the Executive waives any
right that he may otherwise have to participate in any generally applicable
severance plan of the Company or any Related Employer.


 


(b)           Amendment.  No provision of this
Agreement may be amended or waived, except by written agreement signed by both
the Company and the Executive.


 


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(c)           Governing
Law.  This Agreement is intended
to comply with the requirements of Code Section 409A, and it shall be
construed in accordance with such intent. 
Subject to the preceding sentence, this Agreement shall be construed in
accordance with, and governed by, the internal laws of the State of New Jersey
without regard to principles of conflict of laws.


 


(d)           Headings.  The headings in this Agreement have been
inserted solely for ease of reference and shall not be considered in the
interpretation or enforcement of this Agreement.


 


(e)           Severability.  If any provision of the
Agreement is held to be invalid, illegal, or unenforceable, the remainder of
this Agreement shall not be affected thereby. 
If any provision of this Agreement is held by a court of competent
jurisdiction to conflict with any federal, state, or local law, such provision
is hereby declared to be of such force and effect as is permissible in such
jurisdiction.


 


(f)            Rights and
Waivers.  All rights
and remedies of the parties hereto are separate and cumulative, and no one of
them, whether exercised or not, shall be deemed to exclude, limit, or prejudice
any other right or remedy that either of the parties hereto may have.  No party to this Agreement shall be deemed to
waive any right or remedy under this Agreement, unless such waiver is in
writing and signed by such party.  No
delay or omission on the part of either party in exercising any right or remedy
shall operate as a waiver of such right or remedy or any other right or
remedy.  A waiver on any one occasion
shall not be construed as a bar to or a waiver of any right or remedy on any
future occasion.


 


(g)           Notices.  All notices hereunder shall
be in writing.  A notice by the Company
shall be deemed to have been given only when delivered in person to the
Executive or mailed by first class United States Mail, Return Receipt
Requested, or sent by overnight delivery (or the fastest delivery available, if
overnight delivery is not available) by means of an internationally recognized
delivery service, to the Executive at his most recent address on the records of
the Company.  A notice by the Executive
to the Company shall be deemed to have been given only when delivered in person
to the Company’s General Counsel or mailed by first class United States Mail,
Return Receipt Requested, or sent by overnight delivery (or the fastest
delivery available, if overnight delivery is not available) by means of an
internationally recognized delivery service, to the Company’s General Counsel
at the Company’s headquarters.


 


(h)           Counterparts.  This Agreement may be
executed in one or more counterparts, each of which shall be deemed to be an
original, but all of which together will constitute one and the same
instrument, and may be delivered by facsimile or pdf.


 


21.           No Reliance.  The Executive represents and acknowledges
that in executing this Agreement, the Executive does not rely and has not
relied upon any representation or statement by the Company or its agents, other
than statements contained in this Agreement.


 


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  CANTEL MEDICAL CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
  Seth R. Segel

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  
					



 


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APPENDIX A

DEFINED TERMS


 


For purposes of this
Agreement, the following terms shall have the meanings specified below:


 


“Adequate Reason” means any of the following without
the express written consent of the Executive:


 


(1)           a material reduction in the
Executive’s authority, duties, or responsibilities or the assignment to Executive
of duties of a substantial nature and on a continuous or regular basis that are
materially inconsistent with, the duties of the Executive;


 


(2)           a reduction in the Executive’s base compensation or
failure to include the Executive with other similarly situated employees in any
incentive, bonus, or benefit plans as may be offered by the Company from time
to time;


 


(3)           a change in the primary location at which the
Executive is required perform the duties of his employment to a location that
is more than thirty (30) miles from the location at which his office is located
on the effective date of this Agreement; or


 


(4)           the Company’s material breach of this Agreement.


 


“Annual Base Salary” means
the annual base cash compensation payable to the Executive at the rate in
effect as of the applicable date (excluding bonuses, incentive compensation,
taxable fringe benefits, and any other type of special pay), before any
reduction on account of salary reduction contributions pursuant to Code Section 125
or 401(k) or pursuant to a nonqualified deferred compensation plan.


 


“Board” means the Company’s
Board of Directors.


 


“Bonus” means an annual
cash bonus payable under any Bonus Plan.


 


“Bonus Plan” means any
bonus plan, short term incentive compensation plan or other like benefit plan
in which the Executive participates, whether or not awards thereunder are
discretionary.


 


“Cause”
means the Executive’s:


 


(1)           act of fraud, embezzlement,
theft, or other intentional material violation of the law in connection with or
in the course of his employment,


 


(2)           willful gross misconduct
that is likely to materially injure the reputation, business, or a business
relationship of the Company; or


 


(3)           willful material violation
of the Confidentiality and Non-Competition Agreement.


 


For purposes of the definition of “Cause”,
the following shall apply:


 


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·                  no act, or failure to act,
on the part of the Executive shall be deemed “willful,” if it was done or
omitted by the Executive in good faith or with a reasonable belief that the act
or omission was not opposed to the best interests of the Company; and


 


·                  the Executive’s employment
shall not be deemed to have been terminated for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire membership
of the Board at a meeting of the Board called and held for that purpose (after
reasonable notice to the Executive and an opportunity for the Executive,
together with his counsel, to be heard by the Board), finding that in the Board’s
good faith opinion, the Executive was guilty of conduct constituting Cause and
describing the specific acts or omissions constituting such conduct.


 


“Change
in Control” means the first to occur of the following during the Term:


 


(1)           any one person, or more than
one person acting as a group (as determined by Treas. Reg.
§ 1.409A-3(i)(5)(B)), acquires ownership of stock of the Company that,
together with stock held by such person or group, constitutes more than 50% of
the total fair market value or total voting power of the stock of the Company;
or


 


(2)           a majority of the members of
the Company’s board of directors is replaced during any 12-month period by
directors whose appointment or election is not endorsed by a majority of the
members of the Company’s board of directors before the date of the appointment
or election.


 


Notwithstanding the preceding provisions, a Change of
Control will be deemed to occur only to the extent that the event or events
described above constitute a “change in the ownership or effective control of
the corporation, or in the ownership of a substantial portion of the assets of
the corporation” within the meaning of Code Section 409A(a)(2)(A)(v) and
the regulations thereunder.


 


“Change in Control Date”
means the effective date of an event constituting a Change in Control.


 


“Change in Control Period”
means the period beginning on the date of a Change in Control and ending two
years thereafter.


 


“Change in Control
Coverage Period” means the period (A) commencing on the earlier to occur
of (i) the first day of a Potential Change Period or (ii) the first
day of the six (6) month period ending on the Change in Control Date and (B) ending
on the last day of a Change in Control Period.


 


“Code” means the Internal
Revenue Code of 1986, as amended from time to time.


 


“Company” means Cantel
Medical Corp. and any successor, to the extent provided in Section 17.


 


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“Continuation Coverage”
means continuation coverage within the meaning of ERISA Sections 601 through 607.


 


“Confidentiality and
Non-Competition Agreement” means the confidentiality and non-competition
agreement between the Company and the Executive, as in effect from time to
time.


 


“Disability” means an
illness or injury that qualifies the Executive for disability benefits under a
long-term disability plan of the Company or a Related Employer in which the
Executive is a participant; provided, however, that a Disability shall not be
deemed to have occurred hereunder unless the Executive is absent from work or
otherwise substantially unable to assume his normal duties for a period of
ninety (90) successive days or an aggregate of one hundred twenty (120) days
during any consecutive twelve-month period during the Term.


 


“ERISA” means the Employee
Retirement Income Security Act of 1974, as amended from time to time.


 


“Exchange Act” means the
Securities Exchange Act of 1934, as in effect on the date of this Agreement.


 


“Fiscal Year” means the
fiscal year of the Company.


 


“Good Reason” means any of
the following without the Executive’s express written consent:


 


(1)           a material reduction in the
Executive’s base compensation or failure to include the Executive with other
similarly situated employees in any incentive, bonus, or benefit plans as may
be offered by the Company from time to time;


 


(2)           a material reduction in the
Executive’s authority, duties, or responsibilities or the assignment to
Executive of duties of a substantial nature and on a continuous or regular
basis that are materially inconsistent with, the duties of the Executive;


 


(3)           a material reduction in the
authority, duties, or responsibilities of the supervisor to whom the Executive
is required to report;


 


(4)           a material reduction in the
budget over which the Executive retains authority or responsibility;


 


(5)           a change in the primary
location at which the Executive is required perform the duties of his
employment to a location that is more than thirty (30) miles from the location
at which his office is located on the Change in Control Date; or


 


(6)           the Company’s material
breach of this Agreement.


 


“Monthly Base Salary” means
Annual Base Salary, divided by twelve (12).


 


“Parachute Payment” has the meaning give to such term
in Code Section 280G(b)(2).


 


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“Parachute Payment Limit” means three (3) times
the base amount, as defined by Code Section 280G(b)(3).


 


“Potential Change in Control”
means that:


 


(1)           the Company has entered into
an agreement with any person or persons, the consummation of which would constitute
or result in a Change in Control; or


 


(2)           any person has publicly
announced its intention to take or consider taking actions that, if
consummated, would constitute or result in a Change in Control; or


 


(3)           any person has begun a
solicitation (as defined in Rule 14a-1 of the Securities Exchange Act) of
proxies or consents that has the purpose of effecting or would (if successful)
result in a Change in Control; or


 


(4)           any person has initiated a
tender offer or exchange offer that would, if consummated, result in a Change
in Control; or


 


(5)           the Board has adopted a
resolution to the effect that any person has begun actions that, if
consummated, would result a Change in Control.


 


“Potential Change Period”
means the period beginning on the first day of a Potential Change in Control
and ending on the adoption by the Board of a resolution to the effect that the
agreement, announced intention or actions, solicitation, tender offer, exchange
offer, or other actions constituting a Potential Change in Control has been
consummated.


 


“Related Employer” means the
Company and any other employer that is required to be aggregated with the
Company pursuant to Code Section 414(b), (c), or (m).


 


“Release” means a Release of
All Claims, in substantially the same form as set out in Exhibit A hereto.


 


“Term” means the term of
this Agreement, as determined pursuant to Section 2.


 


“Terminates Employment”, “Terminate(s) the
Executive’s Employment”, “Termination of Employment,” or any other variation of
such term means a “separation from service” within the meaning of Code Section 409A(a)(2)(A).


 


“Termination Date” means the
effective date of the Executive’s Termination of Employment.


 


“Unacceptable Performance” means any of the following:


 


(1)           the Executive’s act or
failure to act constituting willful misconduct or gross negligence that is
materially injurious to the Company or its reputation;


 


(2)           the Executive’s material failure to perform the
duties of his employment (except in the case of a Termination of Employment for
Good Reason or Adequate Reason or on account of the Executive’s physical or
mental inability to perform such 


 


16

















 


duties) and the failure to correct such failure within a reasonable
period after receiving written notice from the Board of Directors describing
such failure in detail; provided, however, that the quality of the Executive’s
performance (determined by achievement of Company or personal targets or
otherwise) shall not be a factor in determining whether Executive has performed
his duties.


 


(3)           the Executive’s violation of any code of ethics or
business conduct or written harassment policies of the Company that continues
after the Board has provided notice to the Executive that the continuation of
such conduct will result in Termination of the Executive’s Employment;


 


(4)           willful material violation
of the Confidentiality and Non-Competition Agreement;


 


(5)           the Executive’s arrest or indictment for (i) a
felony or (ii) lesser criminal offense involving dishonesty, breach of
trust, or moral turpitude; or


 


(6)           the Executive’s breach of a material term,
condition, or covenant of this Agreement and the failure to correct such breach
promptly following receipt of written notice from the Board of Directors
describing such breach in detail.


 


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EXHIBIT I

RELEASE OF ALL CLAIMS


 


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


 


Background


 


A.            The Executive
and Cantel Medical Corp. (“Company”) previously entered into an Executive
Severance Agreement, dated as of January 1, 2010 (“Agreement”), which
provides for the payment of benefits to the Executive under certain
circumstances following his Termination of Employment.


 


B.            The Executive’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 the Executive 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, the Executive wishes to sign this
Release.


 


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


 


Release


 


1.             If the
Executive (i) signs and dates this Release and submits it to the Company
not later than 21 days after it is provided to the Executive, (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, the Executive releases and discharges the Company, all of
its 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 the Executive 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 the Executive signed this Release, other than (i) a Claim that the
Company has failed to pay the Executive a payment described in or contemplated
by the 


 


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Agreement or has otherwise breached the terms of the Agreement, or (ii) a
Claim that the Company has failed to pay the Executive 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.”  The Executive 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.


 


3.             The Executive 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. 
The Executive 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 the Executive 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.  The Executive understands
that this Release is final and binding, except as expressly provided
herein.  Nothing herein shall (i) prevent
the Executive from filing a charge or complaint, including a challenge to the
validity of this Agreement, with the Equal Employment Opportunity Commission (“EEOC”),
(ii) prevent the Executive 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 the Executive 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.  The Executive 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.             The Executive
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, the Executive 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.  The Executive 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 the Executive
Severance Agreement (together 


 


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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.             The Executive
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.             The Executive
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. 
The Executive has not been forced or pressured in any manner whatsoever
to sign this Release, and he agrees to all of its terms voluntarily.


 


8.             The Executive
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, the Executive Severance Agreement shall be
void.


 


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


 


 


	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
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  (Printed Name)

  



 


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