Exhibit
10.1


 





 


CANTEL
MEDICAL CORP.


 


ANNUAL INCENTIVE
COMPENSATION PLAN


 

















 


Purpose and Objectives


 


The purpose of the
Incentive Compensation Plan (Plan) is to contribute to the motivation of key
employees in accomplishing the Company’s goals. 
The objectives of the Plan are as follows:


 


·      Clearly
communicate and reinforce strategic, operational and financial objectives.


 


·      Provide
a competitive incentive for achievement of corporate and divisional goals on both
an individual and team basis.


 


·      Establish
an objective basis for determining annual awards.


 


Plan
Definitions


 


Certain words or phases
used in this plan document are defined as follows:


 


·      Award - An annual incentive compensation
award.


 


·      Base
Salary — Base salary
as of July 31st of
the Plan Year (or a participant’s last day of employment with the Company if
prior to July 31st), disregarding any reduction in the rate
of base salary during the six-month period immediately preceding such date.


 


·      Company — Cantel Medical Corp.


 


·      Compensation
Committee — a
subgroup of the Company’s Board of Directors responsible for the following
functions: (1) discharging the Board’s responsibilities relating to
compensation of executive officers; (2) producing an annual report on
executive compensation for inclusion in the proxy statement; and (3) design,
maintenance and administration of all of the company’s incentive plans.


 


·      Plan
Year - The period
from August 1st - July 31st (fiscal year of
Company).  The initial Plan Year is the
fiscal year ending July 31, 2010.


 


·      Target
Award - An
incentive compensation award to be earned by a participant based on achieving pre-determined
financial objectives and other performance objectives during the Plan Year that
represents payment at 100%.


 


Eligibility


 


All executive officers
of the Company, the Presidents of the Company’s Minntech Corporation, Mar Cor
Purification, Inc. and Crosstex International, Inc. subsidiaries and
other direct reports to the CEO of the Company who are approved by the
Compensation Committee are eligible for Awards under this Plan.  New hires/promotions are eligible for a
pro-rated Award. Participation will be based on a position’s level and ability
to influence the long term performance of the Company.  Participants are identified by title and
recommended by the CEO of Cantel Medical Corp., subject to the approval of the
Compensation Committee.


 


Administration


 


The Compensation
Committee has ultimate authority over the Plan, is responsible for approving
the Plan and may alter any provision of the Plan or terminate the Plan at any
time subject to the terms of the Plan herein. The Compensation Committee will
directly administer the Plan with respect to all participants.  Specific responsibilities of the Committee
include:


 


·      Approving
Annual Incentive Compensation Plan


 


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·      Approving
the performance objectives, targets and ranges


 


·      Determining
incentive compensation award percentages


 


·      Approving
incentive compensation awards


 


The CEO of the Company
will make recommendations to the Compensation Committee and resolve questions
regarding the interpretation of the Plan.


 


Prior to the commencement
of each new Plan Year or within sixty (60) days thereafter, the Compensation
Committee shall approve and adopt specific performance targets and target award
levels for Plan participants for such year. 
Such performance targets and target award levels shall be set forth in an
Annual Incentive Compensation Plan.


 


Target
Award Levels


 


The target incentive
awards for each eligible position (by category) are expressed as a percentage
of Base Salary as follows:


 


	
  ELIGIBLE POSITION

  	
   

  	
  TARGET INCENTIVE AWARD

  	
   

  
	
  CEO/President

  	
   

  	
  70% - 100%

  	
   

  
	
  COO, Division CEO, Senior Vice President

  	
   

  	
  45% - 65%

  	
   

  
	
  Vice Presidents, Directors

  	
   

  	
  40% - 55%

  	
   

  
	
  Other Key Employees

  	
   

  	
  10% - 35%

  	
   

  



 


Notwithstanding the
foregoing, Division CEOs will have 25% of their Bonus Target based on the
annual Performance Target established for executives of Cantel Medical
Corp.  The remaining 75% will be based on
the annual performance target specific to the operations of such CEO’s division(s),
which shall be established by the CEO of the Company in consultation with the
Compensation Committee.


 


Awards will be determined
as follows:


 


	
   

  	
   

  	
  EARNINGS GROWTH

  CORP

  	
   

  	
  EARNINGS

  GROWTH

  DIVISION

  	
   

  
	
  CORPORATE EXECUTIVES

  	
   

  	
  100

  	
  %

  	
  —

  	
   

  
	
  DIVISION CEOs

  	
   

  	
  25

  	
  %

  	
  75

  	
  %

  



 


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Payout Ranges


 


Payout
ranges are based upon target incentive award and are expressed as a percentage
of base salary as follows:


 


	
   

  	
   

  	
  MINIMUM

  	
   

  	
  TARGET

  	
   

  	
  MAXIMUM

  	
   

  
	
  Financial Objective

  	
   

  	
  50

  	
  %

  	
  100

  	
  %

  	
  200

  	
  %

  



 


Determination
of Awards


 


To maintain a focus on
increasing shareholder value and driving superior financial performance, awards
under this Plan will be based on the achievement of growth in the Company’s
earnings, as measured by earnings per share or on such other performance
criteria as may be established by the Compensation Committee for each Plan Year
and set forth in the Annual Incentive Compensation Plan. Notwithstanding the
specific performance criteria established, in making a determination as to
whether or not such criteria was satisfied and the extent to which a bonus
should be awarded, the Compensation Committee shall take into consideration
factors such as unanticipated taxes, acquisition costs, non-recurring and
extraordinary items, and other equitable factors, as determined by the
Compensation Committee in its discretion.


 


Distribution
of Awards


 


Awards under the
Plan are to be paid to eligible participants in cash as soon as financial performance
is finalized and individual performance has been assessed, but in no case later
than October 15th.


 


Subject to the terms of a
participant’s employment, severance or other written compensation agreement
with the Company, a participant must be actively employed by the Company on the
date the Award is paid to receive the Award. 
Participants hired or promoted to an eligible position for participation
in the Plan during the Plan Year may receive a pro-rated Award (based on time
in the eligible position during the Plan Year) subject to the approval of the
Compensation Committee.


 


In the event a
participant’s employment is terminated prior to the end of the Plan Year due to
death, disability, or normal retirement, the participant or beneficiary will be
entitled to receive the Award (in whole or on a pro rata basis for the period
employed) that would have been earned if participant’s employment had continued
to the end of the Plan Year, subject to the approval of the Compensation
Committee.


 


At the sole discretion of the Compensation Committee, a participant may
not receive an Award, or the amount of an Award may be decreased, due to substantiated
poor individual performance or misconduct and may be declared ineligible under
the Plan.  The Committee intends to provide
written notice to such participant promptly following its knowledge or
determination of poor individual performance or misconduct and give the
participant an opportunity to dispute or explain his performance or misconduct
and, to the extent practical, correct any correctible poor performance;
provided, however, that the failure to provide such notice shall not affect the
Committee’s rights under this paragraph.


 


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General
Provisions


 


Limitations
on Vested Interest


 


It is
understood that the Awards hereunder are within the sole discretion of the
Company.  No participant has any vested
interest in an award under the Plan until such Award has been approved by the
Compensation Committee.


 


Participants may be deleted from the Plan at the
beginning of each Plan Year at the sole discretion of the Compensation
Committee by giving written notice to such participants at least thirty (30)
days prior to the commencement of the Plan Year. New participants may be added
to the Plan at any time at the sole discretion of the Compensation Committee.


 


Employment Rights


 


The Plan does not give
any employee the right to be retained in the employ of the Company.  Specifically, the Plan does not create an
employment contract for the Plan Year or any part thereof.


 


Non-Assignment


 


Incentive compensation
payments may not be pledged, assigned or transferred for any reason other than
in connection with the death of a Participant.


 


Withholding


 


Any taxes required to be
withheld by Federal, State or Local Regulations will be deducted from incentive
compensation payments hereunder.


 


Discontinuance, Suspension or Amendment of the Plan


 


The
Company, with the approval of the Compensation Committee, may discontinue or
suspend the Plan at any time, or amend the Plan in any respect.  The Company may review the Plan and its
administration at any time to determine whether the objectives of the Plan
continue to be met.


 


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