Exhibit
10.1


EMPLOYMENT AGREEMENT


AGREEMENT
dated as of the 18th day of
December, 2006, by and between CANTEL MEDICAL CORP.,
a Delaware corporation (the “Company”), and R. SCOTT
JONES (the “Employee”).


Introduction


Employee is to be employed as President and Chief Executive Officer of
the Company.  Employee and the Company
desire to enter into an employment agreement and to set forth herein the terms
and conditions of Employee’s employment by the Company.


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


1.             Engagement.  The Company hereby employs Employee and
Employee hereby accepts employment by the Company on the terms and conditions
set forth herein, for the period (the “Employment Period”) commencing December
18, 2006 (the “Effective Date”) and continuing until terminated in accordance
with the provisions of Section 4 below. 
As used in this Agreement, the term “Employment Year” shall refer to the
period commencing on the Effective Date and terminating on December 31, 2007,
and to each successive twelve-month period thereafter during the Employment
Period.


2.             Scope of Duties.  Employee shall be employed by the Company
as its President and Chief Executive Officer. 
In such capacity, Employee shall have such authority, powers and duties
customarily attendant upon such offices. 
If elected or appointed, Employee shall also serve, without additional
compensation, in one or more offices and, if and when elected, as a director of
the Company or any subsidiary or affiliate of the Company, provided that his
duties and responsibilities are not inconsistent with those pertaining to his
position as the Company’s President and Chief Executive Officer.  The Board of Directors shall endeavor to have
Employee elected as a Director of the Company as promptly as practicable
following the commencement of his employment with the Company.  Employee agrees to perform the duties
associated with his employment to the best of his abilities, and shall
faithfully devote his full business time and efforts so as to advance the best
interests of the Company.  During the
Employment Period, Employee shall not be engaged in any other business
activity, whether or not such business activity is pursued for profit or other
pecuniary advantage, unless otherwise approved in writing by the Board of
Directors of the Company. Notwithstanding the foregoing, Employee may engage in
activities related to his personal investments to the extent that they neither
(a) inhibit or impact the performance of his duties hereunder nor (b) conflict
or compete with the business of the Company.


3.             Compensation.


3.1           Base Salary.  In consideration of the services to be
performed by Employee during the Employment Period, the Company agrees to pay
Employee a base salary (“Base Salary”) at the rate of $450,000 per annum
payable in accordance with the Company’s 












 


customary payroll practices as in effect from time
to time.  Following the end of the first
Employment Year, Employee will be eligible for annual consideration for fixed
increases in his Base Salary, any such increase to be in the discretion of the
independent directors of the Board of Directors acting upon a recommendation by
the Compensation Committee.


3.2           Incentive
Compensation.  For each
Employment Year during the Employment Period (or any partial Employment Year on
a pro-rata basis), Employee will be eligible to receive such  additional compensation for his services, a
bonus (the “Bonus”) as may be determined by the independent directors of the
Board of Directors acting upon a recommendation by the Compensation Committee,
who will annually establish criteria to be used to determine the Bonus such as
the increase in the Company’s earnings per share as well as other factors
relating to the Employee’s and the Company’s performance.  Any such Bonus will be payable not later than
75 days after the end of the Employment Year in respect of which it is to be
paid, and the award of any such Bonus will be in the discretion of the
Compensation Committee of the Board of Directors; provided, however, that
except as otherwise provided in Section 4, the Employee shall be paid a Bonus
for the Employment Year ended December 31, 2007 in an amount of not less than
$450,000.  It is further established that
the target Bonus for Employee for the Employment Year ended December 31, 2008,
and beyond, shall be $450,000 unless otherwise increased at the discretion of
the Compensation Committee of the Board of Directors.


3.3           Equity
Compensation.  Employee
shall also be entitled to such equity grants of restricted stock or stock
options as may be determined from time to time by the Compensation Committee of
the Board of Directors of the Company.


3.3.1        Option
Grant.  The Company agrees
to grant to Employee an option (the “Option”) to purchase 150,000 shares of the
Company’s Common Stock, par value $.10 per share.  The Option will be granted pursuant to a
separate option agreement, shall have an option exercise price per share equal
to the closing price of the Company’s Common Stock as reported by the New York
Stock Exchange (the “Fair Market Price”) on the date of the grant, and shall
have a term of five (5) years.  The
Option will be granted under the 1997 Employee Stock Option Plan of the
Company.  The Option shall become
exercisable in three equal annual installments, with the first such installment
becoming exercisable by Employee on the first annual anniversary of the
Effective Date, and the succeeding installments becoming exercisable by Employee
on the second and third year anniversaries of the Effective Date.  In the event that Employee’s employment with
the Company shall terminate for any reason, the Option shall remain exercisable
for a period of three months (one year if termination is due to death)
following such termination of employment but in no event beyond the five-year
option expiration date.  In the event of
a termination of Employee’s employment pursuant to Section 4.4 below prior to
the Option becoming exercisable in its entirety, the Option shall automatically
vest in full and become exercisable for all of the shares thereunder; and in
the event of a termination of Employee’s employment pursuant to Section 4.6
below prior to the Option becoming exercisable in its entirety, then a portion
of the next annual installment of the Option shall vest on a pro-rata basis
through the date of termination (based on the number of days employed during
the Employment Year).



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3.3.2        Restricted
Stock Grant.  Subject only
to approval of the Company’s 2006 Equity Incentive Plan by the Company’s
Shareholders at the Company’s 2006 Annual Meeting of Stockholders to be held on
January 10, 2007, the Company agrees to grant Employee 60,000 shares of
Restricted Stock to Employee on January 10, 2007.  These shares will be granted pursuant to a
separate Restricted Stock Agreement under the 2006 Equity Incentive Plan in
form and substance as approved by the Compensation Committee.  The shares of Restricted Stock will be subject
to forfeiture in accordance with the terms of such agreement during the
three-year period following the date of the grant, and such risk of forfeiture
shall lapse as to 20,000 shares on each anniversary of the date of the grant,
commencing with the first annual anniversary of the date of the grant.  However, in the event of a termination of
this Agreement pursuant to Section 4.6 below prior to the Restricted Stock
becoming exercisable in its entirety, then a portion of the next annual
installment of Restricted Stock shall vest on a pro-rata basis through the date
of termination (based on the number of days employed during the Employment
Year).  Notwithstanding the foregoing,
the risk of forfeiture shall lapse with respect to all shares of Restricted
Stock subject to the grant upon termination of this Agreement pursuant to
Section 4.4.


3.4           Use of
Automobile.  During the
Employment Period, Employee shall be entitled to the use of an automobile
leased or owned by the Company in connection with the Company’s business.  The make and model of the automobile shall be
reasonably satisfactory to Employee, provided that the Company’s monthly
payments in respect thereof (exclusive of the expenses referred to in the
following sentence) shall not exceed $700. 
In lieu of the foregoing, the Company may pay Employee an automobile
allowance of $700 a month.  Employee
shall also be entitled to receive reimbursement for reasonable out-of-pocket
expenses related to the automobile, including, without limitation, cost of gas,
oil, insurance and other costs incurred by Employee in operating and
maintaining the automobile; provided, however, that Employee shall be
responsible for keeping appropriate records regarding the use of said
automobile, as instructed by the Company or its accountants.


3.5           Other
Benefits.


3.5.1        During the Employment
Period, Employee shall be entitled to participate, at Company expense (subject
to applicable employee contribution requirements imposed by the Company from
time to time on its employees generally), in the medical and dental health insurance
plan, and all other health, insurance and other benefit plans applicable
generally to executive officers of the Company on the same basis as such
officers.  In addition, Employee shall be
entitled to participate in the Company’s 401(k) plan.


3.5.2        During the Employment
Period, Employee will be entitled to paid vacation of four weeks, sick leave
and holidays, in all cases consistent with the Company’s policy applicable to
executives generally as from time to time in effect.  All vacations shall be scheduled at the
mutual convenience of the Company and Employee.


3.5.3        The Company will
reimburse Employee for reasonable out-of-pocket expenses incurred in
furtherance of the business of the Company, including travel, entertainment and
similar items, upon the presentation of appropriate receipts or vouchers



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therefor,
consistent with the Company’s policy applicable to executives generally as from
time to time in effect.


4.             Termination.  Employee understands and acknowledges
that the Company may terminate this Agreement and Employee’s employment
hereunder at any time, with or without cause, for any reason or no reason, in
which event the Company shall have no further obligation under this Agreement
to make any payments to Employee or to bestow any benefits on Employee, other
than as specifically provided herein.  No
termination of this Agreement by itself shall be deemed a breach of this
Agreement for the purposes of Section 6.3 below.


4.1           If Employee is
absent from work or otherwise substantially unable to assume his normal duties
for a period of sixty (60) successive days or an aggregate of ninety (90)
business days during any consecutive twelve-month period during the Employment
Period because of physical or mental disability, accident, illness, or any
other cause other than vacation or approved leave of absence, the Company may
thereupon, or at any time thereafter while such absence or disability still
exists, terminate the employment of Employee hereunder upon written notice to
Employee.


4.2           In the event of the
death of Employee, this Agreement shall immediately terminate on the date
thereof, subject to the terms of this Section 4.


4.3           If Employee (a)
discloses material trade secrets or other material confidential information
related to the business of the Company in breach of this Agreement or otherwise
violates a covenant set forth in Section 6 hereof; (b) fails or refuses to
carry out the business of the Company as lawfully directed and as reasonably
required by the terms of this Agreement after written demand is delivered to
Employee by the Board of Directors of the Company, which demand specifically
identifies the manner in which the Board of Directors believes that Employee
has failed or refused to carry out the Company’s business, which failure or
refusal is not substantially remedied by Employee within ten (10) days of
receipt of such demand; (c) commits any criminal act or an act of
dishonesty or moral turpitude, in the reasonable judgment of the Company’s
Board of Directors; or (d) abuses alcohol, prescription drugs or controlled
substances, then the Company may, in addition to other rights and remedies
available at law or equity, immediately terminate this Agreement upon written
notice to Employee with the date of such notice being the “termination date” and
such termination being deemed for “cause.”


4.4           Employee may
terminate his employment under this Agreement upon not less than thirty (30)
days’ written notice to the Company if (i) the Company undergoes a “Change in
Control” (as defined below) or (ii) within twelve months following a merger
that does not constitute a Change in Control of the Company, Employee’s job
title, duties and responsibilities are materially reduced.  “Change in Control” shall mean (1) the
acquisition of beneficial ownership, direct or indirect, of securities of the
Company by any person (as that term is defined in Section 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended), other than Employee or a
person approved by Employee, which when combined with all other securities of
the Company beneficially owned, directly or indirectly, by that person, equals
or exceeds 50% of the combined voting power of the Company’s then outstanding
securities, or (2) 



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at
any time after the Effective Date, a majority of the Board of Directors is
composed of persons who are not “Continuing Directors” as hereinafter
defined.   “Continuing Directors” as used
herein shall mean (i) the directors of the Company at the close of business on
the Effective Date, and (ii) any person who was or is elected (A) to succeed a
Continuing Director or (B) to become a director as a result of an increase in
the size of the board, recommended, in each case, by a majority of the
Continuing Directors then on the Board. 
Any Termination Notice given by Employee hereunder must be given within
ninety (90) days following the occurrence of the event giving rise to such
termination.


4.5           Employee shall have
the right to terminate his employment without cause at any time upon not less
than three (3) months’ prior written notice to the Company.


4.6           The Company shall
have the right to terminate Employee’s employment without cause upon not less
than thirty (30) days’ prior written notice to the Employee.


4.7           Upon termination of
Employee’s employment under Section 4.1, 4.2, 4.3 or 4.5, the Company shall
have no further obligation under this Agreement to make any payments to
Employee or to bestow any benefits on Employee after the termination date,
other than payments and benefits accrued and due and payable to Employee prior to
the termination date.


4.8           Upon termination of
Employee’s employment under Section 4.4 or 4.6, Employee will be entitled to
payments and benefits accrued and due and payable to Employee prior to the
termination date under Section 3; provided, however, that with respect to the
amount of the Bonus to be paid under Section 3.2 (the “Accrued Bonus”) under
such circumstance, (i) if such termination occurs during the first Employment
Year, then such amount payable shall be $450,000 (i.e., the full minimum Bonus)
regardless of when during the first Employment Year the termination occurs and
(ii) if such termination occurs after the first Employment Year, then such
amount (x) shall be a prorated portion of the full Bonus payable for such
Employment Year (based on the number of days Employee was employed during the
Employment Year); provided, however, that such amount shall be payable under
this subparagraph (ii) only if the established Bonus criteria for such
Employment Year was satisfied through the date of termination.  In addition to the foregoing payments,
following such termination, the Company shall (i) continue to pay to Employee
Employee’s Base Salary as in effect at the time of termination for a twelve
month period following the date of termination (provided however, that the
payments that are due hereunder for the first six months after such termination
of employment shall be deferred and shall be paid in a lump sum, without
interest, on the first business day after such six month period) and (ii) pay
to Employee a severance payment equal to the amount of the Accrued Bonus (the “Severance
Bonus”).  The Severance Bonus and the
Accrued Bonus to be paid to Employee hereunder shall be paid no later than 75
days after the close of the Company’s fiscal year in which such termination of
employment occurred.  Except for such
payments and the benefits described in Section 4.9, the Company shall have no
further obligation under this Agreement to make any payments to Employee or to
bestow any benefits on Employee after the termination date.  Any payment to Employee under this Section
shall constitute liquidated damages and not a penalty, and Employee shall not
be obligated to seek employment to mitigate his damages; nor



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shall
any compensation the Employee receives from any party subsequent to such
termination be an offset to the amount of any payment hereunder.


4.9           Upon termination of
Employee’s employment under Sections 4.1, 4.2 or 4.6, the Company shall pay to
the Employee or his representatives for the three months following any such
termination (provided any amounts payable pursuant to this section shall be
paid no later than 75 days after the close of the Company’s fiscal year in
which such termination of employment occurred), an amount equal to the monthly
amount being paid by the Company at the time of termination to insure Employee
and his spouse and/or dependents under any medical or dental health insurance
plans then being maintained by the Company, such payments being in addition to
the payments and benefits payable to Employee specified above.


5.             Relocation.  Employee agrees to relocate his
residence to a location within 60 miles of the corporate offices, located at
150 Clove Road, Little Falls, New Jersey 07424 by December 31, 2007.  Subject to Employee’s compliance with the
foregoing, the Company agrees to reimburse Employee for his reasonable and
necessary relocation expenses as mutually agreed by the Company and the
Employee.  If Employee voluntarily
terminates his employment with the Company within 12 months of his start date,
he agrees to immediately repay the total reimbursed relocation expenses.  Any amounts received by Employee for
relocation expense reimbursement will be reported as taxable income to Employee
in the year received as required by applicable tax law and appropriate income
and employment tax withholdings will be made to the extent required by
applicable law.


6.                                    Disclosure of Confidential
Information, Assignment
 of Inventions, and Covenants Not to Compete.


 


6.1           Confidential Information.  Employee acknowledges that the Company
(which term, for purposes of Section 6 shall be deemed to include Cantel
Medical Corp. and all of its direct and indirect subsidiaries) possesses
confidential information, know-how, customer lists, purchasing, merchandising
and selling techniques and strategies, and other information used in its
operations of which Employee has or will obtain knowledge, and that the Company
will suffer serious and irreparable damages and harm if this confidential
information were disclosed to any other party or if Employee used this
information to compete against the Company. 
Accordingly, Employee hereby agrees that except as required by Employee’s
duties to the Company, Employee, without the consent of the Company’s Board of
Directors, shall not at any time during or after the Employment Period disclose
or use any secret or confidential information of the Company, including,
without limitation, such business opportunities, customer lists, trade secrets,
formulas, techniques and methods of which Employee shall become informed during
his employment, whether learned by him as an employee of the Company, as a
member of its Board of Directors or otherwise, and whether or not developed by
Employee, unless such information shall be or becomes public knowledge other
than as a result of Employee’s direct or indirect disclosure of the same.



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6.2           Patent
and Related Matters.


6.2.1        Inventions.  Employee will promptly disclose in writing to
the Company complete information concerning each and every invention,
discovery, improvement and idea (whether or not shown or described in writing
or reduced to practice), and device, design, apparatus, process, and work of
authorship, whether or not patentable, copyrightable or registerable, which is
made, developed, perfected, devised, conceived or first reduced to practice by
Employee, either solely or in collaboration with others, during the Employment
Period, whether or not during regular working hours (hereinafter collectively
referred to as the “Inventions”).  Subject
to Section 6.2.2, Employee, to the extent that he has the legal right to do so,
hereby assigns and agrees to assign to the Company any and all of Employee’s
right, title and interest in and to any and all of the Inventions, and Employee
acknowledges that such assigned inventions are and shall remain the property of
the Company.


6.2.2        Limitation.  It is further agreed and Employee is hereby
notified that the above agreement to assign the Inventions to the Company does
not apply to an Invention for which no equipment, supplies, facility or
confidential information of the Company was used and which was developed
entirely on Employee’s own time, and


(i)            which does not
relate (a) directly to the business of the Company or (b) to the Company’s
actual or demonstrably anticipated research or development, or


(ii)           which does not
result from any work performed by Employee for the Company.


6.2.3        Assistance. 
Upon request and without further compensation therefor, but at no
expense to Employee, and whether during the Employment Period or thereafter,
Employee will do all lawful acts, including, but not limited to, the execution
of documents and instruments and the giving of testimony, that in the opinion
of the Company, its successors and assigns, may be necessary or desirable in
obtaining, sustaining, reissuing, extending or enforcing United States and
foreign copyrights and Letters Patent, including, but not limited to, design
patents, on any and all of the Inventions, and for perfecting, affirming and
recording the Company’s complete ownership and title thereto, and to cooperate
otherwise in all proceedings and matters relating thereto.


6.2.4        Records. 
Employee will keep complete, accurate and authentic accounts, notes,
data and records of all the Inventions in the manner and form requested by the
Company.  Such accounts, notes, data and
records shall be the property of the Company, and upon its request, Employee
will promptly surrender the same to it.


Upon the termination of his employment hereunder, Employee agrees to
deliver promptly to the Company all equipment (including computers, etc.),
records, manuals, books, blank forms, documents, letters, memoranda, notes,
notebooks, reports, data, tables, accounts, calculations and copies thereof,
which are the property of the Company or which relate in any way to the
business, products, practices or techniques of the Company, and all other
property, trade secrets and confidential information of the Company, including,
but not limited to, all documents which in whole or in part contain any trade
secrets or confidential



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information
of the Company, which in any of these cases are in his possession or under his
control.


6.3           Non-Compete.  Employee agrees that during the
Employment Period and for a period of two (2) years following the termination
of Employee’s employment hereunder, except as a result of the breach by the
Company of any material term or condition hereof (a “Breach”), Employee will
not, directly or indirectly, alone or with others, individually or through or
by a corporate or other business entity in which he may be interested as a
partner, shareholder, joint venturer, officer, director, employee or otherwise,
own, manage, control, participate in, lend his name to, or render services to
or for any business within the continental United States or Canada which is
competitive with that of the Company’s primary lines of business, provided,
however, that the foregoing shall not be deemed to prevent the ownership by
Employee of up to five (5%) percent of any class of securities of any
corporation which is regularly traded on any stock exchange or over-the-counter
market.  For the purpose of this
Agreement, a business activity competitive with the business of the Company
shall include only the design, manufacture, marketing, sale, distribution or
service of any of the following products (collectively, “Products”):  (i) endoscope disinfection or sterilization
equipment or supplies, (ii) infection control equipment, products, supplies or
systems, (iii) water treatment and filtration systems and supplies, (iv)
specialty packaging products for transporting infectious and biological
specimens, (v) products or services for dialysis and for medical device
reprocessing, or other medical filtration and separation services or (vi) any
other product or product group hereafter manufactured, marketed, sold,
distributed or serviced by the Company after the date hereof; but in each case
which are the same as or similar to or compete with, or have a usage allied to,
Products being developed, marketed, sold or distributed by the Company at any
time during the last twelve months of Employee’s employment by the Company.


6.4           Non-interference.  Employee further agrees that for a period
of two years following termination of Employee’s employment hereunder, he will
not (i) induce or attempt to induce any other employee of the Company to leave
the employ of the Company, or in any way interfere with the relationship
between the Company and any other employee, or (ii) induce or attempt to induce
any customer, supplier, franchisee, licensee, distributor or other business
relation of the Company to cease doing business with the Company, or in any way
interfere with the relationship between any customer, franchisee or other
business relation and the Company without prior written consent of the Board of
Directors of the Company.


6.5           Enforcement.  If, at the time of enforcement of any
provisions of this Section, a court of competent jurisdiction holds that the
restrictions stated herein are unreasonable under the circumstances then
existing, the parties hereto agree that the maximum period, scope or
geographical area reasonable under such circumstances will be substituted for
the stated period, scope or area. 
Employee agrees that the covenants made in this Section shall be
construed as an agreement independent of any other provision of this Agreement,
and shall survive the termination of this Agreement.



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7.             Miscellaneous Provisions.


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


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


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


7.4           This Agreement may
be modified only by means of a writing signed by the party to be charged with
such modification.


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


If to the Company:


Cantel
Medical Corp.


150
Clove Road


Little
Falls, NJ  07424


Attn:
Charles M. Diker


Chairman of the Board


If
to Employee:


R. Scott Jones


15535
Old York Road


Monkton, MD 21111


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


7.7           This Agreement may
be executed in separate counterparts and may be delivered by facsimile, each of
which shall constitute the original hereof.


 



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


	
  

  	
  CANTEL MEDICAL CORP.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Charles M.
  Diker

  
	
   

  	
   

  	
  Charles M. Diker

  
	
   

  	
   

  	
  Chairman of the
  Board

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ R. Scott
  Jones

  
	
   

  	
   

  	
  R. Scott Jones

  
				



 


 



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