EXHIBIT 10(q)
STOCK OPTION AGREEMENT made as of the 15th day of March, 1996, by and
between CANTEL INDUSTRIES, INC., a Delaware corporation with principal offices
located at 1135 Broad Street, Clifton, New Jersey 07013 (the "Company"), and
DONALD L. STURTEVANT (the "Optionee").
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The Company has adopted the 1991 Employee Stock Option Plan, as amended
(the "Plan"), permitting the grant of incentive stock options (within the
meaning of Section 422A of the Internal Revenue Code) to employees of the
Company or its subsidiaries or any parent corporation of the Company. The
Optionee, pursuant to the Plan, is presently employed by the Company or one of
its subsidiaries. The Company is desirous of increasing the incentive of the
Optionee to exert his utmost efforts to improve the business and increase the
assets of the Company.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, receipt of which is hereby acknowledged, the Company,
pursuant to the Plan, hereby grants the Optionee the option to acquire shares of
the common stock of the Company upon the following terms and conditions:
1. GRANT OF OPTION. (a) The Company hereby grants to the Optionee the
right and option (the "Option")
to purchase up to 25,000 shares of Common Stock, par value $.10 per share, of
the Company (the "Shares"), to be issued upon the exercise hereof, fully paid
and non-assessable, during the following periods:
(i) No Shares may be purchased hereunder prior to March 15, 1997;
(ii) 8,334 Shares may be purchased commencing March 15, 1997;
(iii) an additional 8,333 Shares may be purchased commencing March
15, 1998: and
(iv) an additional 8,333 Shares may be purchased commencing March
15, 1999.
(b) The Option granted hereby shall expire and terminate at 5:00
p.m. local time in New York, New York on March 14, 2000 (the "Expiration Date")
at which time the Optionee shall have no further right to purchase any Shares
not then purchased.
2. EXERCISE PRICE. The exercise price of the Option shall be $8.75 per
Share, and shall be payable in cash or by certified check; provided, however,
that in lieu of payment in full in cash or by such check, the exercise price (or
balance thereof) may be paid in full or in part by the delivery and transfer to
the
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Company of Shares already owned by the Optionee and having a fair market value
(as determined by the Board of Directors in its absolute discretion) equal to
the cash exercise price (or balance thereof) for the number of Shares as to
which the Option is being exercised. The Company shall pay all original issue or
transfer taxes on the exercise of the Option.
3. EXERCISE OF OPTION. The Optionee shall notify the Company by registered
or certified mail, return receipt requested, addressed to its principal office,
as to the number of Shares which he desires to purchase under the Option, which
notice shall be accompanied by payment of the Option exercise price therefor as
specified in Paragraph 2 above. As soon as practicable after the receipt of such
notice, the Company shall, at its principal office or another mutually
convenient location, tender to the Optionee certificates issued in the
Optionee's name evidencing the Shares purchased by the Optionee hereunder.
4. CONDITIONS OF EXERCISE.
(a) The Optionee shall have the right to exercise the Option only
while he shall be in the full-time employ of the Company or any of its
subsidiaries, except that if the Optionee's employment shall be terminated for
any reason other than his death, the Option may be exercised at any time within
three (3) months after the date of termination but only to the extent that it
was exercisable upon such date of termination and in no event after the
Expiration Date.
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If the Optionee shall have terminated his employment within one year of the date
of the grant of the Option, the Option shall immediately terminate.
(b) If the Optionee shall die while in the employ of the Company or
any of its subsidiaries, this Option may be exercised, to the extent exercisable
on the date of the Optionee's death, by his executor, administrator or other
person at the time entitled by law to his rights under this Option, at any time
within three (3) months after such date of death, but in no event after the
Expiration Date.
(c) Notwithstanding anything to the contrary contained herein, the
aggregate fair market value, determined at the time of option grant, of the
Shares with respect to which the Option, together with any other "incentive
stock option" within the meaning of Section 422A of the Internal Revenue Code
("ISO"), granted to the Optionee by the Company or any of its subsidiaries, may
be first exercised in any calendar year, cannot exceed $100,000 plus any "unused
carryover" from previous years. For purposes of this Agreement, "unused
carryover" means the amount, computed separately for each calendar year, by
which $100,000 exceeds the fair market value (determined at the time of grant)
of all ISO's granted to the Optionee by the Company and its subsidiaries that
first became exercisable and were in fact exercised by the Optionee in such
year, reduced by the amount that such carryover may have been used in prior
calendar years.
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5. NON-ASSIGNABILITY OF OPTION. The Optionee may not give, grant, sell,
exchange, transfer legal title, pledge, assign or otherwise encumber or dispose
of the Option herein granted or any interest therein, otherwise than by will or
the laws of descent and distribution and, except as provided in Paragraph 4(b)
hereof, the Option shall be exercisable only by the Optionee.
6. THE SHARES AS INVESTMENT. By accepting the Option, the Optionee agrees
for himself, his heirs and legatees that any and all Shares purchased upon the
exercise thereof shall be acquired for investment and not for distribution, and
upon the issuance of any or all of the Shares subject to the Option, the
Optionee, or his heirs or legatees receiving such Shares, shall deliver to the
Company a representation in writing that such Shares are being acquired in good
faith for investment and not for distribution. The Company may place a "stop
transfer" order with respect to such Shares with its transfer agent and may
place an appropriate restrictive legend on the certificate(s) evidencing such
Shares.
7. RESTRICTION ON ISSUANCE OF SHARES. The Optionee shall, if so requested
by the Company, represent and agree, in writing and in such form as the Company
shall determine, that any securities purchased by the Optionee upon the exercise
of this Option are being purchased for investment and not with a view to the
distribution thereof, and shall make such other or additional representations
and agreements and furnish such information as the
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Company may in its reasonable discretion deem necessary or desirable to assure
compliance by the Company, on terms acceptable to the Company, with provisions
of the Securities Act of 1933 and any other applicable legal requirements. If at
any time the Company shall reasonably determine that the listing, registration
or qualification of the Shares subject to this Option upon any securities
exchange or under any state or federal law, or the consent or approval of any
governmental regulatory body, are necessary or desirable in connection with the
issuance or purchase of the Shares subject thereto, this Option may not be
exercised in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Company. The Optionee shall have no rights against the
Company if this Option is not exerciseable by virtue of the foregoing provision.
The certificate representing any securities issued pursuant to the exercise of
this Option may, at the discretion of the Company, bear a legend in
substantially the following form:
The securities represented by this certificate have not been
registered under the Securities Act of 1933. The securities have
been acquired for investment and may not pledge or hypothecated and
may not be sold or transferred in the absence of an effective
Registration Statement for the securities under the Securities Act
of 1933 or an opinion of counsel to the Company that registration is
not required under said Act. In the event that a Registration
Statement becomes effective covering the
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securities or counsel to the Company delivers a written opinion that
registration is not required under said Act, this certificate may be
exchanged for a certificate free from this legend."
8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
(a) In the event of changes in the outstanding Shares by reason of
stock dividends, split-ups, recapitalizations, mergers, consolidations,
combination, exchanges of shares, separations, reorganizations, liquidations and
the like, the number of Shares issuable upon the exercise of the Option and the
exercise price thereof shall be correspondingly adjusted by the Company. No
adjustment shall be made, however, with respect to stock dividends or splits
which do not exceed 5% in any fiscal year, cash dividends or the issuance to the
Company's shareholders of rights to subscribe for additional Shares or other
securities.
(b) Any adjustment in the number of Shares shall apply
proportionately to only the then unexercised portion of the Option. If
fractional Shares would result from any such adjustment, the adjustment shall be
revised to the next higher whole number.
9. NO RIGHTS AS SHAREHOLDERS. The Optionee shall have no rights as a
shareholder in respect of the Shares as to which the Option shall not have been
exercised and payment made as herein provided.
10. EFFECT UPON EMPLOYMENT. This Agreement does not give nor shall it be
construed as giving the Optionee any right to continued employment by the
Company or any of its subsidiaries.
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11. CONFLICT BETWEEN OPTION AGREEMENT AND PLAN. In the event there are any
conflicts between this Agreement and the terms and conditions of the Plan, the
terms and conditions of the Plan shall control.
12. BINDING EFFECT. Except as herein otherwise expressly provided, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto, their legal representatives and assigns.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey applicable to agreements
made and to be performed wholly within the State of New Jersey.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
CANTEL INDUSTRIES, INC.
By: /s/ James P. Reilly
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James P. Reilly, President
/s/ Donald L. Sturtevant
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Donald L. Sturtevant
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