- Current report filing (8-K)
February 12 2010 - 5:22PM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Date of Report
(Date of earliest event reported)
February 12, 2010
CANTEL
MEDICAL CORP.
(Exact name of
registrant as specified in its charter)
Delaware
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001-31337
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22-1760285
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(State or other
jurisdiction
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(Commission
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(IRS
Identification
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of
incorporation)
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File Number)
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Number)
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150
Clove Road, Little Falls, New Jersey
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07424
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Address of
principal executive offices)
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(Zip Code)
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Registrants
telephone number, including area code:
(973) 890-7220
(Former name or
former address, if changed since last report)
Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Item
5.02(e)
Compensatory
Arrangements of Certain Officers
On
February 12, 2010, Cantel Medical Corp. (the Company) entered into
Executive Severance Agreements and Confidentiality and Non-Competition
Agreements with Andrew A. Krakauer (President and Chief Executive Officer), Seth
R. Segel (Executive Vice President), Craig A. Sheldon (Senior Vice President,
Chief Financial Officer and Treasurer), Eric W. Nodiff (Senior Vice President,
General Counsel and Secretary), and Steven C. Anaya (Vice President and
Controller). On the same date, Minntech
Corporation (Minntech), a subsidiary of the Company, entered into an
Executive Severance Agreement and a Non-Competition Agreement with Roy K.
Malkin (President and Chief Executive Officer of Minntech). Said Executive Severance Agreements are
referred to herein as the Severance Agreements, said Confidentiality and
Non-Competition Agreements are referred to herein as the Non-Compete
Agreements, and Messrs. Krakauer, Segel, Sheldon, Nodiff, Anaya and
Malkin are referred to herein as the Executives. All of the Severance Agreements and all of
the Non-Compete Agreements are based on the same form of agreements. A summary of the material terms of the
Agreements is as follows:
Term
: The
Severance Agreements commence as of January 1, 2010 and continue through July 31,
2010; however on August 1 of each year, the term extends by one year
unless either the Company (which for purposes of Mr. Malkins agreement
refers to Minntech) or the Executive has provided at least 6 months notice
that the term will not be extended. However, if a Change of Control (as defined
in the Severance Agreements) occurs, the term will not end before the second
anniversary of the Change in Control.
Accrued Compensation:
Upon termination of employment for any
reason, the Executive will be entitled to his (a) earned but unpaid base
salary through the termination date, (b) accrued and unused paid time off
(PTO) through the termination date, and (c) reimbursement of expenses.
Non-Change of Control
Severance:
Subject to certain conditions (e.g., signing a
Release), if an Executive is terminated (i) by the Company without cause
or (ii) by the Employee for Adequate Reason (as defined in the Severance
Agreement), then the Executive will be entitled to the following, unless termination
occurs during a Change in Control Coverage Period (as defined in the Severance
Agreements and described below):
(a) One years base salary (18 months in case of CEO), paid in
a lump sum.
(b) If the termination occurs subsequent to a fiscal year end
in which the Executive did not yet receive his earned bonus, then the Executive
will be entitled to his bonus to the extent earned under his applicable bonus
plan.
(c) For the partial fiscal year in which
the termination occurs, the Executive will be entitled to a pro-rata portion
(based on number of days worked in fiscal year) of his bonus to the extent
earned under his applicable bonus plan.
2
(d)
The most current tranche of
unvested options and restricted stock will vest on a pro rata basis through the
termination date.
(e) 12 months of COBRA benefits.
(f) 12 months of outplacement services, up to $20,000.
Change of Control
Severance:
Subject to certain conditions (e.g., signing a
Release), if an Executive is terminated during a Change in Control Coverage
Period (generally, the period commencing 6 months prior to a Change in Control
and ending 2 years following a Change in Control), the Executive will be
entitled to the following compensation if (A) the Company terminates the
Executives employment (other than a termination for Cause or death), or (B) the
Executive voluntarily terminates his employment for Adequate Reason or Good
Reason (as such terms are defined in the Severance Agreements):
(a) Two times the sum of the Executives
base salary and target bonus (or if higher, the average of the prior two years
bonuses).
(b) If the termination occurs subsequent
to a fiscal year end in which the Executive did not yet receive his earned
bonus, then the Executive will be entitled to his target bonus for such fiscal
year.
(c) For the partial fiscal year in which
the termination occurs, the Executive will be entitled to a pro-rata portion
(based on number of days worked in fiscal year) of his target bonus for such
partial fiscal year.
(d) 12 months of COBRA benefits.
(e) Continuation of term life insurance
policy for 24 months.
(f) 12 months of outplacement services,
up to $20,000.
(g) Reimbursement of income taxes payable
in connection with benefits under (d), (e) and (f) above.
Termination of Employment by the Company:
The Company may cause a Termination of an Executives
Employment for Unacceptable Performance at any time other than during a Change
in Control Coverage Period. The Board must provide the Executive with a notice
of termination specifying the specific acts or failures constituting
Unacceptable Performance, accompanied by a resolution adopted by a 2/3 Board
vote. The Executive will have the ability to cure if the act of failure is
correctable.
The Company may cause a Termination of the Executives
Employment for Cause at any time. The Board
must provide the Executive with a notice of termination specifying the specific
acts or failures constituting Cause, accompanied by a resolution adopted by a ¾
Board vote. The Executive will have the ability to cure if the act of failure
is correctable.
3
In the case of a termination
due to disability or death, the Company will continue to pay the Executives
base salary for a 3-month period.
Clawback:
If an Executive
intentionally and materially breaches any provision of the Non-Compete
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 under the Severance Agreement.
Disputes:
In any judicial
or other proceedings in which the Executives right to, or the amount of,
benefits is disputed, the ultimate burden of proof will be on the Company. In addition, the Company will be obligated to
pay all reasonable out-of-pocket expenses, including reasonable legal fees and
legal expenses, incurred by an Executive in connection with any proceeding to
enforce the Severance Agreement or to construe, determine, or defend the
validity of the Severance Agreement.
Non-Competition:
the Non-Compete Agreements require the
Executives to comply with confidentiality, non-compete and non-solicitation
covenants.
The
summary of the Severance Agreements and Non-Compete Agreements in this Current
Report on Form 8-K is qualified in its entirety to the full text of the agreements,
the same (for NEOs) being attached hereto as Exhibits and incorporated herein
by reference.
Item
9.01
Financial Statements,
Pro-Forma Financial Information and Exhibits
(d)
Exhibit
10.1
Executive Severance
Agreement between Registrant and Andrew A. Krakauer.
10.2
Executive Severance
Agreement between Registrant and Seth R. Segel.
10.3
Executive Severance Agreement
between Registrant and Craig A. Sheldon.
10.4
Executive Severance
Agreement between Registrant and Eric W. Nodiff.
10.5
Executive Severance
Agreement between Minntech Corporation and Roy K. Malkin.
10.6
Confidentiality and
Non-Competition Agreement between Registrant and Andrew A. Krakauer.
10.7
Confidentiality and
Non-Competition Agreement between Registrant and Seth R. Segel.
4
10.8
Confidentiality and
Non-Competition Agreement between Registrant and Craig A. Sheldon.
10.9
Confidentiality and
Non-Competition Agreement between Registrant and Eric W. Nodiff.
10.10
Confidentiality and
Non-Competition Agreement between Minntech Corporation and Roy K. Malkin.
5
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
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CANTEL
MEDICAL CORP.
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By:
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/s/
Andrew A. Krakauer
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Andrew
A. Krakauer
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President
and CEO
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Dated: February 12, 2010
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