UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT

Proxy Statement Pursuant to Section 14(a) of
the Securities
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Soliciting material pursuantMaterial Pursuant to Rule 14a-11(c) or Rule 14a-12
§240.14a-12


Cantel Medical Corp.

(Name of Registrant as Specified in itsIn Its Charter)


Cantel Medical Corp.

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Cantel Medical Corp.
150 Clove Road
Little Falls, NJ 07424

NOTICE OF 20032005 ANNUAL MEETING OF STOCKHOLDERS


To Be Held On December 17, 2003
20, 2005

NOTICE IS HEREBY GIVEN that theThe Annual Meeting of Stockholders ofCantel Medical Corp. will be held on December 20, 2005 at 9:30 a.m., Eastern Standard Time, at The Harmonie Club, 4 East 60th Street, New York, New York. We are holding the Annual Meeting to:

1.                Elect ten (10) directors to serve a one-year term. (Proposal 1)

2.                Amend our Certificate of Incorporation to increase the number of authorized shares of common stock from 20,000,000 to 30,000,000. (Proposal 2)

3.                Ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending July 31, 2006. (Proposal 3)

4.                Transact such other business as may properly be brought before the meeting.

The record date for the Annual Meeting is November 15, 2005. Only our stockholders of record at the close of business on that date may vote at the meeting, or any adjournment of the meeting. A copy of our Annual Report to Stockholders for the fiscal year ended July 31, 2005 is being mailed with this Proxy Statement.

You are invited to attend the meeting. Whether or not you plan to attend the meeting, please mark and sign the enclosed proxy exactly as your name appears on your stock certificates, and mail it promptly in the enclosed return envelope in order that your vote can be recorded.

By order of the Board of Directors

/s/ DARWIN C. DORNBUSH

Darwin C. Dornbush

Secretary

Little Falls, New Jersey

November 21, 2005



Cantel Medical Corp.
150 Clove Road
Little Falls, NJ 07424

PROXY STATEMENT

General

We are providing these proxy materials in connection with the solicitation by our Board of Directors of proxies to be voted at our 2005 Annual Meeting of Stockholders to be held on Tuesday, December 20, 2005 beginning at 9:30 a.m., Eastern Standard Time, and at any adjournment or postponement. The Annual Meeting will be held at The Harmonie Club, 4 East 60th Street, New York, New York on Wednesday, December 17, 2003 at 10:00 a.m., eastern standard time, forYork.

Solicitation

We will bear the following purposes:

    1.
    To elect two (2) directors to serve a termentire cost of three years. (Proposal 1)

    2.
    To approve the amendment to the Company's 1997 Employee Stock Option Plan to permit the grantsolicitation of options that do not qualify as incentive stock options. (Proposal 2)

    3.
    To approve the amendment to the Company's 1998 Directors' Stock Option Plan to provide for automatic grants of options to purchase 15,000 shares of common stock to each newly appointed or elected director. (Proposal 3)

    4.
    To ratify the selection of Ernst & Young LLP as the independent auditors of the Company for its fiscal year ending July 31, 2004. (Proposal 4)

    5.
    To act on any other matters that may properly be brought before the Meeting or any adjournment or postponement of the Meeting.

        Only stockholders of record at the close of business on November 14, 2003 are entitled to notice of,proxies including preparation, assembly, printing and to vote at, the Meeting or any adjournment or postponement thereof. A copy of the Company's Annual Report to Stockholders for the fiscal year ended July 31, 2003 is being mailed to stockholders together with the mailing of this proxy statement and the enclosed proxy.

        You are cordially invitedany additional information furnished to attend the Meeting. Whether or not you planstockholders. Copies of solicitation materials will be furnished to attend, please act promptly to vote yourbanks, brokerage houses, fiduciaries and custodians holding in their names shares on the proposals described above. You may vote your shares by completing, signing, and dating the enclosed proxy card and returning it as promptly as possible in the enclosed postage-paid envelope. You may revoke your proxy in the manner described in this proxy statement at any time before it has been voted at the Meeting.

        If you attend the Meeting, you may revoke your prior proxy and vote your shares in person if you wish.

By order of the Board of Directors





Darwin C. Dornbush
Secretary

Little Falls, New Jersey
November 25, 2003


Cantel Medical Corp.
150 Clove Road
Little Falls, NJ 07424

PROXY STATEMENT

        The enclosed proxy is solicited by the Board of Directors of Cantel Medical Corp. for use at the Annual Meeting of Stockholderscommon stock beneficially owned by others to be held on Wednesday, December 17, 2003 at 10:00 a.m., eastern standard time, at The Harmonie Club, 4 East 60th Street, New York, New York, and at any and all adjournments or postponements thereof. forward to such beneficial owners.

This Proxy Statement and form of proxy are being mailed to stockholders on or about November 25, 2003.21, 2005. You should review this information together with our 2005 Annual Report to Stockholders, which accompanies this Proxy Statement.

        AsIn order to ensure the presence of a quorum at the Annual Meeting, all stockholders are requested to sign and return promptly the enclosed proxy in the postage paid envelope provided for that purpose. The signing of the proxy will not prevent your attending the meeting and voting in person if you wish to do so.

Voting Rights and Outstanding Shares

Only holders of record of common stock at the close of business on November 14, 2003, the record date fixed for the determination of stockholders15, 2005 will be entitled to notice of and to vote at the Meeting, there were 9,322,806 outstanding sharesAnnual Meeting. Each holder of record of common stock which is the only outstanding class of voting securities of the Company. Each outstandingon such date will be entitled to one vote for each share of common stock is entitled to one voteheld on each matterall matters to be voted upon.upon at the Annual Meeting. At the close of business on November 15, 2005, Cantel had outstanding and entitled to vote 15,475,981 shares of common stock.

A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if at least a majority of the outstanding shares are represented by votes at the meeting or by proxy. The inspector of election appointed for the Annual Meeting will tabulate all votes, and will separately tabulate affirmative and negative votes, abstentions and broker non-votes.

Properly executed proxies will be voted in accordance with the instructions indicated in such proxies. If no instructions are indicated, such proxies will be voted for the election of each of the twoten Board nominees for election as directors, and in favor of the other proposals described herein.

        The Board of Directors does not intend to presentherein, and at the Meeting any matters other than those set forth in this Proxy Statement, nor does the Board know of anyproxy holder’s discretion on such other matters, whichif any, that may come before the Annual Meeting. However, if

In the event that a broker, nominee or other record holder of shares indicates on a proxy that it does not have discretionary authority to vote such shares on a particular matter (a “broker non-vote”), those shares will be counted towards a quorum, but will not be counted for any other matters are properly presented, itpurpose in determining whether a matter has been approved. As the affirmative vote of a plurality of votes cast is required for the intentionelection of directors, abstentions and “broker non-votes” will have no effect on the outcome of such election. As the affirmative vote of a majority of all the issued and outstanding shares of common stock is required for the adoption of Proposal 2, an abstention and a “broker non-vote” will have the same effect as a negative vote. As the affirmative vote of a majority of shares of common stock present in person or represented by proxy is necessary for the approval of Proposal 3, an abstention will have the same effect as a negative vote, but “broker non-votes” will have no effect on the outcome of the persons named in the enclosed proxy to vote it in accordance with their judgment.vote.



Revocability of Proxies

IT IS DESIRABLE THAT AS LARGE A PERCENTAGE AS POSSIBLE OF THE STOCKHOLDERS' INTERESTS BE REPRESENTED AT THE MEETING. THEREFORE, EVEN IF YOU INTEND TO BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO SIGN AND RETURN THE ENCLOSED PROXY TO ENSURE THAT YOUR STOCK WILL BE REPRESENTED. Any proxy given pursuant to this solicitation may be revoked at any time prior to its use at the Annual Meeting, by delivery to the Secretary of the CompanyCantel of a written notice of revocation, by submission of a later dated and properly executed proxy, or by voting in person at the Annual Meeting. Attendance at the Annual Meeting will not, in and of itself, constitute a revocation of a proxy.

        Only stockholders2



PROPOSAL 1

ELECTION OF DIRECTORS

General

The Board of recordDirectors is currently divided into three classes with three-year staggered terms. One class consists of four directors and two classes consist of three directors. However, on November 8, 2005, the Board amended our By-laws to eliminate the classification of the Board. As a result of the amendment, our entire Board of Directors will now be elected each year at the closeAnnual Meeting of business on November 14, 2003Stockholders for a one-year term. The term of all ten current directors will be entitledcontinue until this Annual Meeting and each director elected at this Annual Meeting will have a one-year term ending at the 2006 Annual Meeting of Stockholders.

The persons named in the enclosed proxy intend to vote at the Meeting or any adjournment or adjournments thereof.

        The Company's by-laws provide that stockholders holding a majority of the outstanding shares of common stock entitled to vote shall constitute a quorum at meetings of the stockholders. Shares represented in person or by proxy as to any matter will be counted toward the fulfillment of a quorum. The vote of a plurality of the votes cast in person or by proxy is necessary for the election of directors. The affirmative voteeach of the holders of a majorityten nominees, unless you indicate on the proxy card that your vote should be withheld from any or all of the shares of common stock present, in person or represented by proxy, and entitled to vote at the meeting is necessary for the approval of Proposals 2, 3 and 4. Votes at the Annual Meeting will be tabulated by an independent inspector of election appointed by the Company or the Company's transfer agent.

        A broker "non-vote" occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner. Broker "non-votes" are not included in the tabulation of the voting results on the election of directors or issues requiring approval of the majority of the votes present and, therefore, do not have the effect of votes in opposition in such tabulations. An abstention from voting on a matter or a Proxy instructing that a vote be withheld has the same effect as a vote against a matter since it is one less vote for approval.

        As the affirmative vote of a plurality of votes cast is required for the election of directors, abstentions and "broker non-votes" will have no effect on the outcome of such election. As the affirmative vote of a majority of shares of common stock present in person or represented by proxy is required for the approval of Proposals 2, 3 and 4, an abstention will have the same effect as a negative vote, but "broker non-votes" will have no effect on the outcome of the vote.


PROPOSAL 1

ELECTION OF DIRECTORS

General

        The Company's Amended and Restated Certificate of Incorporation and by-laws provide that the Board of Directors shall be divided into three (3) classes, with each class having a three (3) year term. The Board is presently composed of ten (10) members. There are three (3) directors in the class whose term of office expires in 2003. Two of the current directors in the class, Morris W. Offit and John W. Rowe, M.D., have advised the Board that they will not continue their services as directors following the Annual Meeting.nominees. The Board has approvedproposed the reduction of its size to nine (9) members. Due to the reduction in Board size and the fact that Mr. Offit and Dr. Rowe are both in the same class (the class subject to election at this Annual Meeting), there are only two directors to be elected at the Annual Meeting. One of thefollowing nominees for election in this class,as directors, each of whom is an incumbent director whose nomination was recommended by our Nominating and Governance Committee and approved by the Board: Robert L. Barbanell, Alan R. Batkin, Joseph M. Cohen, Charles M. Diker, Darwin C. Dornbush, is currently a director of the Company. The other nominee is Spencer Foreman, M.D. If elected at the Annual Meeting, each of the nominees would serve until the 2006 annual meeting, Alan J. Hirschfield, Elizabeth McCaughey, James P. Reilly and until his successor is elected and has qualified, or until such director's earlier death, resignation or removal.Bruce Slovin.

Directors arewill be elected by a plurality of the votes present inproperly cast (in person or represented by proxy and entitled to voteproxy) at the meeting. InSince there are ten nominees, this means that the event that anypersons who receive the ten highest number of votes will be elected, even if he or she receives less than a majority of the votes cast. Each nominee should be unavailable for electionelected as a result of an unexpected occurrence, such sharesdirector will be voted for the election of such substitute nominee as the Board may propose.continue in office until his or her successor has been elected and qualified, or until his or her earlier death, resignation or retirement. Each person nominated for election has agreed to serve if elected,elected. If for some reason any nominee is unable to serve, proxies will be voted in favor of the remainder of those nominated and may be voted for substitute nominees, unless the Board has no reasonchooses to believe that any nominee will be unable to serve.reduce the number of directors serving on the Board.

Set forth below is biographical information for each person nominated and each person whose term of office as a director will continue afterwith respect to the Annual Meeting.nominees.

Name of Director

 

 

 

Age

 

Principal Occupation

 

Director
Since

Robert L. Barbanell

 

75

 

President of Robert L. Barbanell Associates, Inc.

 

1994

Alan R. Batkin

 

61

 

Vice Chairman of Kissinger Associates, Inc.

 

2004

Joseph M. Cohen

 

68

 

Chairman of JM Cohen & Co., LLC

 

2000

Charles M. Diker

 

70

 

Chairman of the Board of Cantel and managing partner of Diker Management LLC

 

1985

Darwin C. Dornbush, Esq.

 

75

 

Partner in the law firm of Dornbush Schaeffer Strongin & Weinstein, LLP

 

1963

Spencer Foreman, M.D.

 

70

 

President of Montefiore Medical Center

 

2003

Alan J. Hirschfield

 

70

 

Vice Chairman of the Board of Cantel, and private investor and consultant

 

1986

Elizabeth McCaughey

 

57

 

Chairman of Committee to Reduce Infection Deaths

 

2005

James P. Reilly

 

65

 

President and Chief Executive Officer of Cantel

 

1989

Bruce Slovin

 

69

 

President of 1 Eleven Associates, LLC

 

1986


Nominees for Election for a Three-Year Term Expiring at the 2006 Annual MeetingRobert L. Barbanell

Name of Nominee
 Age
 Principal Occupation
 Director
Since
Darwin C. Dornbush, Esq. 73 Partner in the law firm of Dornbush Mensch Mandelstam & Schaeffer, LLP 1963
Spencer Foreman, M.D. 68 President of Montefiore Medical Center —

Darwin C. Dornbushhas served as SecretaryPresident of the CompanyRobert L. Barbanell Associates, Inc., a financial consulting company, since July 1990. He has been a partner in the law firm of Dornbush Mensch Mandelstam & Schaeffer, LLP, which has been general counsel to the Company for more than the past five years.1994. Mr. DornbushBarbanell is also a director of Benihana,Pride International, Inc. (NASDAQ)(NYSE), an oil drilling contractor.

Alan R. Batkinhas served as Vice Chairman of Kissinger Associates, Inc., a geopolitical consulting firm that advises multi-national companies, since May 1990. Mr. Batkin is also a director of Hasbro, Inc. (NYSE), a toy and game company, Overseas Shipholding Group, Inc. (NYSE), a company whichthat operates Japanese restaurants.

2


Dr. Spencer Foreman has served as president of Montefiore Medical Center in New York City, one of the largest academic medical centers in the United States, since 1986. Heoceangoing bulk cargo vessels, and Diamond Offshore Drilling, Inc. (NYSE), an oil and gas offshore drilling company. In addition, he is a member and past chairman of the Board of Governors of the Greater New York Hospital Association and the Board of Directors of the League of Voluntary Hospitals. Dr. Foreman also serves as chairman of the board of Biomedical Research Alliance of New York.


The Board Recommends a Vote "For" The Nominees Listed Herein.

Directors Continuing in Office Until the 2004 Annual Meeting

Name of Director
 Age
 Principal Occupation
 Director
Since
Charles M. Diker 68 Chairman of the Board of the Company and Investment Manager 1985
Alan J. Hirschfield 68 Vice Chairman of the Board of the Company, Private Investor and Consultant 1986
Bruce Slovin 67 President of 1 Eleven Associates, LLC 1986

Charles M. Diker has served as Chairman of the Board of the CompanyIQ Investment Advisors Fund Complex.

Joseph M. Cohen has served as Chairman of JM Cohen & Co., LLC, a family investment group, since February 2000.

Charles M. Diker has served as our Chairman of the Board since April 1986. He1986 and is currently acts as anmanaging partner of Diker Management LLC, a registered investment manager.adviser. Mr. Diker is also a director of Loews Corporation (NYSE), a holding company whose subsidiaries include a property, casualty and life insurance company, a tobacco company, a hotel chain, an offshore oil and gas drilling company, and a watch company.

Darwin C. Dornbush has served as our Secretary since July 1990. He has been a partner in the law firm of Dornbush Schaeffer Strongin & Weinstein, LLP, which has been our outside general counsel for more than the past five years. Mr. Dornbush is also a director of Benihana, Inc. (NASDAQ), a company which operates Japanese restaurants and Levitt Corporation (NYSE), a commercial and residential property developer.

Dr. Spencer Foreman has served as President and CEO of Montefiore Medical Center in New York City, one of the largest academic medical centers in the United States, since 1986. He is a member and past Chairman of the Board of Governors of the Greater New York Hospital Association and the Board of Directors of the League of Voluntary Hospitals.

Alan J. Hirschfield has served as our Vice Chairman of the Board of the Company since January 1988. He is currentlySince February 2000 he has been a private investor and consultant. From July 1992 to February 2000, Mr. Hirschfield served as Co-Chairman and Co-Chief Executive Officer of Data Broadcasting Corp., a communication services and technology company. Mr. Hirschfield is also a director of Interactive Data Corp. (formerly Data Broadcasting Corp.) (NYSE) as well as J NET Enterprises, Inc. (NYSE), an internet venture investor, Carmike Cinemas, (OTC)Inc. (NASDAQ), a national theater chain, and Peregrine Systems, Inc. (OTC), a provider of consolidated asset and service management solutions.software solutions, and Leucadia National Corp. (NYSE), a holding company whose subsidiaries include telecommunications, healthcare services, banking, manufacturing, real estate activities, winery operations and property and casualty reinsurance.

Elizabeth McCaughey has served as the Chairman of the Committee to Reduce Infection Deaths, which she founded, since 2004. Since 1999 she has served as a senior fellow or adjunct senior fellow at Hudson Institute, a policy research organization, where she focuses on the impact of medical innovation and scientific discovery on longevity, health care costs and the economy.

James P. Reilly has served as our President and Chief Executive Officer since June 1989. Mr. Reilly is a certified public accountant.

Bruce Slovin has served as President of 1 Eleven Associates, LLC, a private investment firm, since January 2000. From 1985 until December 2000, Mr. Slovin was the President and a director of MacAndrews & Forbes Holdings Inc. and Revlon Group, Inc., privately held industrial holding companies. Mr. Slovin is a director of M&F Worldwide Corp. (NYSE), a manufacturer of licorice extract and flavorings Daxor Corporation (AMEX), the developer and manufacturer of the Blood Volume Analyzer, and Sentigen Holding Corp. (NASDAQ), a biomedical research company.

The Board of Directors unanimously recommends a vote FOR the election of these nominees as directors.


STRUCTURE AND PRACTICES
OF THE BOARD OF DIRECTORS

Corporate Governance Policy

We seek to follow best practices in corporate governance in a manner that is in the best interests of our business and stockholders. We are in compliance with the corporate governance requirements imposed by the Sarbanes-Oxley Act of 2002, the SEC and the NYSE. We will continue to review our policies and practices to meet ongoing developments in this area.

Our Corporate Governance Guidelines and Code of Business Conduct and Ethics are available on our website under the “Investor Relations-Corporate Governance” link at www.cantelmedical.com or (free of charge) by sending a written request to Cantel Medical Corp., 150 Clove Road, 9th Floor, Little Falls, NJ 07424, Attn: Assistant Secretary. Aspects of our corporate governance principles are discussed throughout this Proxy Statement.

Board Meetings and Attendance of Directors Continuing in Office Until

The Board held four regular meetings and two special meetings during the fiscal year ended July 31, 2005. During fiscal 2005, Annual Meeting

Name of Director
 Age
 Principal Occupation
 Director Since
James P. Reilly 63 President and Chief Executive Officer of the Company 1989

Robert L. Barbanell
 
73
 
President of Robert L. Barbanell Associates, Inc.
 
1994
Joseph M. Cohen 66 Chairman of JM Cohen & Co., L.L.C. 2000
Fred L. Shapiro, M.D. 69 Retired Physician 2001

3

James P. Reilly has served as President and Chief Executive Officereach of the Company since June 1989. Mr. Reilly is a certified public accountant.

Robert L. Barbanell has served as President of Robert L. Barbanell Associates, Inc., a financial consulting company, since July 1994. Mr. Barbanell is also a director of Pride International, Inc. (NYSE), an oil drilling contractor.

Joseph M. Cohen has served as Chairman of JM Cohen & Co., L.L.C., a family investment group, since February 2000. From July 1998 until February 2000, Mr. Cohen was Chairman of SG Cowen Securities Corp., a securities firm. From June 1967 until July 1998, Mr. Cohen was Managing Partner and Chairman of Cowen & Company, a research and investment banking firm.

Dr. Fred L. Shapiro served as a consultant to Hennepin Faculty Associates, a non-profit organization involved in medical education, research and patient care, from July 1995 to June 1999, President of Hennepin Faculty Associates from January 1984 to June 1995, and Medical Directorincumbent directors attended 75% or more of the Regional Kidney Disease Program from July 1966 to January 1984. He has also been a Professor of Medicine at the Hennepin County Medical Center and the University of Minnesota since July 1976. Prior to the merger with Cantel, Dr. Shapiro served as a director of Minntech since 1982.

Committees and Meetings

        The Company has an Audit Committeetotal meetings of the Board and the respective committees on which he served. Directors are required to make every reasonable effort to attend the Annual Meeting of Directors consistingStockholders. Four members of Messrs. Barbanell (Chairman), Offit (a retiring director) and Slovin, all of whom have been determined by the Board attended our 2004 Annual Meeting of Directors to be "independent," as defined byStockholders.

Director Independence

The Board has affirmatively determined that the following seven directors have no material relationship with us and are independent within the meaning of Rule 10A-3 of the Securities Exchange Act of 1934 (the “Exchange Act”) and within the NYSE definition of “independence”: Robert L. Barbanell, Alan R. Batkin, Joseph M. Cohen, Spencer Foreman, M.D., Alan J. Hirschfield, Elizabeth McCaughey and Bruce Slovin. To assist in making the independence determination, the Board has adopted categorical standards for Director Independence as part of our Corporate Governance Guidelines. These standards, a copy of which is attached to this Proxy Statement as Annex A, satisfy the NYSE independence requirements. Independent directors receive no compensation from us for service on the Board or the Committees other than directors’ fees and non-discretionary grants under our 1998 Directors’ Stock Option Plan.

Meetings of Non-Management Directors; Presiding Director

Under our Corporate Governance Guidelines, non-management directors meet at regularly scheduled meetings, without any employee directors or members of management present. During fiscal year 2005, the non-management directors held one such meeting. Currently, Alan R. Batkin, who was selected by our non-management directors to serve a one-year term as the presiding independent director, is the chairperson for all non-management director meetings.

Communications with Directors; Hotline

You may contact the entire Board of Directors, any Committee, the non-management directors as a group, the presiding independent director or any other individual director by calling our toll-free Hotline at 1-800-826-6762. An outside vendor collects all reports or complaints and delivers them to our General Counsel, who forwards them to the Audit Committee and/or the appropriate director or group of directors. You are also welcome to communicate directly with the Board at our Annual Meeting of Stockholders. Additional information regarding the Hotline can be found through a link under “Investor Relations-Corporate Governance” on our website at www.cantelmedical.com.


Committees

The Board of Directors has three standing committees: the Audit Committee, the Compensation and Stock Option Committee (the “Compensation Committee”) and the recently proposed NYSE listing standards.Nominating and Governance Committee (“Nominating Committee”). All of the audit committeemembers of the Audit Committee, the Compensation Committee and the Nominating Committee are independent directors within the definition in the NYSE listing standards and Rule 10A-3 of the Exchange Act. Each of the Committees has the authority to retain independent advisors and consultants, with all fees and expenses to be paid by us. The Board-approved charters of each of the Committees are available on our website under the “Investor Relations-Corporate Governance” link at www.cantelmedical.com or (free of charge) by sending a written request to Cantel Medical Corp., 150 Clove Road, 9th Floor, Little Falls, NJ 07424, Attn: Assistant Secretary.

Audit Committee.The Audit Committee is composed of Messrs. Barbanell (Chairman), Batkin and Slovin. All of the Audit Committee members are financially literate, and at least one member has accounting and financial management expertise. The Board has determined that Mr. Barbanell qualifies as an "audit“audit committee financial expert"expert” for purposes of the SEC'sSEC’s rules.

The primary functions of the Audit Committee are:

    •
    Appointing, retaining (or terminating) and overseeingperforms the work of the independent auditors;

    •
    Approving the compensation of the independent auditors;

    •
    Reviewing the Company's system of internal controls regarding finance, accounting, business conduct and ethics and legal compliance that management andfollowing functions: (1) assisting the Board have established in connectionfulfilling its oversight responsibilities with such matters;

    •
    Reviewing the Company's accounting and financial reporting processes;

    •
    Reviewingrespect to (a) the integrity of our financial reportsstatements, (b) our compliance with legal and other financialregulatory requirements, (c) the independent registered public accounting firm’s qualifications and related information released by the Company to the public, or in certain circumstances governmental bodies;

    •
    Reviewingindependence, and appraising with management(d) the performance of our internal audit function and independent registered public accounting firm and (2) preparing a report in accordance with the Company's independent auditors;

    •
    Providing an open avenuerules of communication between the independent auditors and the Board; and

    •
    Receiving and investigating notices of financial improprieties.
SEC to be included in our annual proxy statement.

The full Audit Committee held threesix meetings during fiscal 2003 at2005, of which all members of the committeethree were present except for Mr. Offit, who missed one meeting and Mr. Slovin, who missed two meetings. The chairman of the Audit Committee held four additional meetings with the Company's financial management and its independent auditors. Three of such meetings were held prior to the filing the Company'sof our Quarterly Reports on Form 10-Q for the purpose of reviewing such reports and one meeting was held forreports. Only the purpose of discussing succession planning of audit personnel.

4


        The Company has a Compensation and Stock Option Committee Chairman is required to attend (although the other members of the BoardCommittee may attend) meetings in connection with the review of Directors consistingour Quarterly Reports pursuant to the Audit Committee Charter.

Compensation Committee.The Compensation Committee is composed of Messrs. Hirschfield (Chairman), BarbanellCohen and Cohen.Dr. Foreman. The primary functions of the Compensation Committee are to:

    •
    Dischargeperforms the Board'sfollowing functions: (1) discharging the Board’s responsibilities relating to compensation of the Company'sour executive officers;

    •
    Produce (2) producing an annual report on executive compensation for inclusion in the Company'sour proxy statement in accordance with applicable rules and regulations; and

    •
    Administer the Company's (3) administering our stock option plans in accordance with the terms of such plans.

The Compensation and Stock Option Committee did not hold anyheld two formal meetings during fiscal 2003; however,2005. In addition, it had several informal telephonic meetings regarding the compensation of our executive officers.

Nominating Committee.The Nominating Committee is composed of Messrs. Slovin (Chairman), Barbanell and Cohen. The Committee performs the Company's Presidentfollowing functions: (1) identifying individuals qualified to become Board members consistent with criteria approved by the Board and Chief Executive Officer.

        Therecommending that the Board select the director nominees for the next annual meeting of Directors ofstockholders; (2) developing and recommending to the Company held five meetings duringBoard the fiscal year ended July 31, 2003. Except for Dr. Rowe, who did not attend twoCorporate Governance Guidelines; and (3) overseeing evaluation of the Board and management. The Nominating Committee held one meeting during fiscal 2005.

The Nominating Committee has established a process for identifying and evaluating nominees for director. Although the Committee will consider nominees recommended by stockholders, the Committee believes that the process it utilizes to identify and evaluate nominees for director is designed to produce nominees that possess the educational, professional, business and personal attributes that are best suited to further our purposes. Any interested person may recommend a nominee by submitting the nomination, together with appropriate biographical information, to the Nominating Committee, c/o Cantel Medical


Corp., 150 Clove Road, 9th Floor, Little Falls, NJ 07424, Attn: Assistant Secretary. All recommended candidates will be considered using the criteria set forth in our Corporate Governance Guidelines.

The Nominating Committee will consider, among other things, the following factors to evaluate recommended nominees: the Board’s current composition, including expertise, diversity, balance of management and non-management directors, independence and other qualifications required or recommended by applicable laws, rules and regulations (including NYSE requirements) and company policies or procedures. The Committee will also consider the general qualifications of potential nominees, including, but not limited to personal integrity; loyalty to Cantel and concern for our success and welfare; experience at strategy/policy setting level; high-level leadership experience in business or administrative activity; breadth of knowledge about issues affecting Cantel; an ability to work effectively with others; sufficient time to devote to us; and freedom from conflicts of interests.

Director Compensation

Since February 1, 2005, directors other than Messrs. Diker and Reilly are paid a fee of $20,000 per year and $1,000 per Board meeting attended ($2,000 for meetings longer than a half-day), plus reimbursement for expenses. In addition, the Presiding Director is paid a fee of $5,000, and Mr. Offit, who did not attend three of the Board meetings and oneChairmen of the Audit Committee, meetings, no incumbent director attended fewer than 75% of the aggregate of (i) the total number of meetings of the Board (held during the period for which he has been a director) and (ii) the total number of meetings held by all committees of the Board on which he served (during the periods that he served).

        The Company did not have a Nominating Committee during the fiscal year ended July 31, 2003. However, the Board approved the formation of a Nominating and GovernanceCompensation Committee and the adoption of its charter in October 2003. Members of the Nominating Committee will be appointed at the next meetingare paid annual fees of the Board of Directors, scheduled for December 17, 2003.

        The Audit Committee Charter, the Compensation$15,000, $6,000 and Stock Option Committee Charter, and the Nominating and Governance Committee Charter will be posted on the Company's website atwww.cantelmedical.com. In addition, copies of the Charters will be provided free of charge upon written request addressed to the Assistant Secretary of the Company at the Company's principal executive offices.

Director Compensation

        During fiscal 2003, Directors who were not officers of the Company were paid a $2,500 annual fee and $1,000 per meeting attended, plus expenses. The annual fee was increased to $10,000 commencing August 1, 2003. In addition, Directors who served as chairmen$3,000, respectively. Each member of the Audit Committee and Compensation Committee wereis paid $1,000 perfor each meeting attended and each member of the other non-employee Directors who served on the committees wereis paid $750 perfor each meeting attended. The ChairmanOur 1998 Directors’ Stock Option Plan provides for an automatic grant of the Audit Committee was paid an additional director's feeoptions to purchase 15,000 shares of $5,000 per year. During fiscal 2004, such fee was increasedcommon stock to $10,000. The 1998 Directors'persons who first become a director of Cantel. Such Plan further provides for the automatic grant to each of the Company'sour directors of an option to purchase 1,500 shares of common stock on the last business day of the Company'sour fiscal year. In addition, an option to purchase 750 shares of common stock is granted automatically on the last business day of each fiscal quarter to each non-employee director provided that the director attended any regularly scheduled meeting of the Board, if any, held during such quarter.

5


PROPOSAL 2

APPROVAL

AMENDMENT OF AMENDMENT CERTIFICATE OF INCORPORATION
TO THE
1997 EMPLOYEEINCREASE AUTHORIZED COMMON STOCK OPTION PLAN

        In October 1997, the Company adopted the 1997 Employee Stock Option Plan (the "Employee Plan") under which the Company may, from time to time, issue options exercisable for shares of common stock. As amended, the Employee Plan authorizes the grant of options to purchase 2,000,000 shares. The Board of Directors has adopted an amendmenta resolution declaring it advisable and in the best interests of Cantel and the stockholders to the Employee Plan to permit the grantamend our Certificate of options that do not qualify as incentive stock options ("ISOs") within the meaning of Section 422 of the Internal Revenue Code of 1986,Incorporation, as amended (the "Code"“Certificate”). Adoption of such amendment requires stockholder approval. A copy of to increase the Employee Plan, as amended, is attached hereto as Annex A.

        The Employee Plan is administered in all respects by the Company's Compensation and Stock Option Committee (the "Option Committee"). The Option Committee may determine the employees to whom options are to be granted and theauthorized number of shares subjectof our common stock, par value $.10 per share, from 20,000,000 to each option. Under the terms of the Employee Plan, all employees of the Company or subsidiaries of the Company are eligible for option grants. Options under the Employee Plan are granted to reward past performance by employees, as an incentive for future performance, and to recruit and retain qualified personnel.30,000,000 shares.

The option exercise price of options granted under the Employee Plan is fixed by the Option Committee but, in the case of ISOs, must be no less than 100% of the fair market value of theCertificate presently authorizes 20,000,000 shares of common stock, subjectof which 15,475,981 shares were issued and outstanding as of November 15, 2005, the record date for the Annual Meeting; and 1,000,000 shares of preferred stock, one dollar ($1.00) par value, none of which is presently issued and outstanding. As of November 15, 2005, 445,588 shares of common stock were held by us as treasury shares. Additionally, as of that date an aggregate of 3,331,029 shares of common stock were reserved for issuance upon the exercise of options granted or available for grant under our various stock option plans or under stock options individually granted by the Board. As a result of such reservation requirement, if we desire to issue common equity for stock splits or acquisitions or to obtain funds through an offering or for any other purpose, we are currently limited to the option atissuance of 747,402 shares of common stock.

The Board considers it desirable to have available for issuance sufficient authorized shares of common stock to enable us to act without delay of seeking shareholder approval if favorable opportunities arise to raise additional equity capital or to acquire companies or products by the timeissuance of grant, exceptshares of common stock and otherwise to be in a position to take various steps requiring the issuance of additional shares of


common stock (including stock splits or stock dividends) that in the case of an employee who possesses more than 10%judgment of the total combinedBoard are in our best interests. The shares will also be available for issuance under current and future employee equity compensation plans. Other than issuances upon exercise of outstanding stock options and future option grants under our stock option plans, we have no current plans, arrangements or understandings regarding the issuance of any additional shares of common stock for which authorization is sought and there are no negotiations pending with respect to the issuance thereof for any purpose.

Additional shares of common stock authorized pursuant to this proposal would be identical in all respects to the common stock now authorized. While authorization of the additional shares will not currently dilute the proportionate voting power or other rights of existing stockholders, future issuances of common stock could reduce the proportionate ownership of existing holders of common stock, and, depending on the price at which such shares are issued, may be dilutive to the existing stockholders.

Common stock (including the additional shares of common stock authorized pursuant to this proposal) and preferred stock may be issued from time to time upon authorization of the Board, without further approval by the stockholders, unless otherwise required by applicable law, and for the consideration that the Board may determine is appropriate and as may be permitted by applicable law.

As provided for by the Delaware General Corporation Law, the Board has directed that the proposed amendment to increase the number of authorized shares of common stock be submitted to a vote of the stockholders. Approval of the proposed amendment requires the affirmative vote of a majority of the votes entitled to be cast by the holders of common stock.

Although an increase in the authorized shares of our capital stock could, under certain circumstances, also be construed as having an anti-takeover effect (for example, by permitting easier dilution of the stock ownership of a person seeking to effect a change in the composition of the Board or contemplating a tender offer or other transaction resulting in our acquisition by another company), the proposed increase is not in response to any effort by any person or group to accumulate our stock or to obtain control of Cantel by any means. In addition, the proposal is not part of any current plan by the Board to recommend or implement a series of anti-takeover measures or any other corporate transactions.

The proposed amendment to the Certificate would amend Article Fourth of the Certificate by striking out the first sentence of Article FOURTH, up to the colon, as it now exists and inserting in lieu and instead thereof the following:

“FOURTH: The total number of shares of all classes of stock that the Corporation shall have authority to issue is Thirty-One Million (31,000,000), of which Thirty Million (30,000,000) shall be shares of Common Stock, par value $0.10 per share, and One Million (1,000,000) shall be shares of Preferred Stock, par value $1.00 per share, and the Companyvoting powers, designations, preferences and relative, participating, optional or its subsidiaries (a "10% Holder"), the exercise price for ISOs must be no less than 110% of said fair market value. Options may be exercisedother special qualifications, limitations or restrictions thereof are as follows:”

If approved by the payment in full in cash or by tenderingrequisite number of shares, of common stock having a fair market value, as determined by the Option Committee, equal to the option exercise price. Options granted under the Employee Plan may not be exercised more than ten years after the date of grant, five years in the case of an ISO granted to a 10% Holder.

        Prior to the current amendment, only options intended to qualify as ISOs were permitted to be granted under the Employee Plan. The Board believes that it is necessary to permit the grant of non-ISOs under the Employee Plan to give greater flexibility in the type of options available for grant. For example, the Code imposes strict limitations on the quantity of ISOs that may be granted to an employee. Under the Code the aggregate fair market value of stock with respect to which an ISO is exercisable for the first time by any individual during any calendar year (under all plans of the Company and its subsidiaries) cannot exceed $100,000. This limitation makes the grant of options to senior executive officers impractical.

        As of November 14, 2003, options to purchase 1,127,105 shares were outstanding under the Employee Plan and 594,835 shares are available for future grants. Upon stockholder approval of the amendment to our Certificate will become effective upon filing the Employee Plan optionsCertificate of Amendment with the Delaware Secretary of State, which is expected to purchase 118,050 shares will be granted to James P. Reilly, President of the Company. The number of shares is subject to adjustment on account of stock splits, stock dividends and other dilutive changes in the common stock. Shares of common stock covered by unexercised stock options that expire, terminate, or are cancelled are available for option grant under the Employee Plan.

    Income Tax Consequences:

        The principal federal income tax consequences of the granting of options will be as follows:

        (a)   ISO's: The Employee Plan provides that the aggregate fair market value (determined at the time of option grant) of stock with respect to which ISOs become exercisable by the Optionee for the first time in any calendar year under all of the stock option plans of the Company or any of its subsidiaries cannot exceed $100,000. ISO tax treatment is denied by the Code to any options in excess of such dollar limits.

6

        The granting of an ISO results in no federal income tax consequences to the Optionee. No income is recognized by the Optionee upon the exercise of an ISO. However, for purposes of the alternative minimum tax only, the amount by which the fair market value of the option shares at the time of ISO exercise exceeds the option exercise price (the "Option Spread") will be an item of tax preference for purposes of the federal alternative minimum tax and thus the Option Spread may be subject to the alternative minimum tax unless the shares are disposed of in a Disqualifying Disposition (as defined below) in the year of exercise. If the Optionee is subject to the alternative minimum tax in the year of the option exercise, the shares purchased upon the exercise of the ISO will generally have a tax basis equal to their fair market value at the time of ISO exercise only for purposes of computing gain or loss on a subsequent disposition of the option shares under the alternative minimum tax. If instead the Optionee is subject to the regular tax in the year of the disposition of his option shares, the shares purchased upon the exercise of an ISO will have a tax basis (for purposes of calculating gain or loss on such disposition under the regular tax) equal to their ISO exercise price. Each Optionee should consult his tax advisor as to the application of the alternative minimum tax to the exercise of ISOs and the disposition of shares acquired thereby.

        The Internal Revenue Service (the "IRS") recently announced that it will not apply income tax withholding obligations on the employer or assess FICA or FUTA taxes (on either the employee or the employer) with respect to the Option Spread upon the exercise of an ISO until at least two years after final regulations with respect thereto have been issued by the IRS.

        If the shares purchased upon the exercise of an ISO are disposed of by the Optionee (other than by transfer to his estate, executor, administrator or heir by reason of his death), neither (a) within the two-year periodoccur promptly following the grant of the option nor (b) within the one-year period following the issuance of the shares to the Optionee, then upon such disposition, any excess of the sale price of the shares over the option exercise price will constitute capital gain to the Optionee. If the Optionee disposes of the shares within such two-year period or one-year period (other than by transfer to his estate, executor, administrator or heir by reason of his death) (a "Disqualifying Disposition"), the Optionee will generally recognize in the year of the disposition (i) ordinary income to the extent of the difference between the exercise price and the lesser of (a) the fair market value of the shares on the date the ISO is exercised, or (b) the amount realized on the disposition of the shares, and (ii) short term capital gain to the extent of any excess of the amount realized on the disposition over the fair market value of the shares on the date the ISO is exercised.Annual Meeting.

        If the Optionee pays the option exercise price by surrendering to the Company shares of its stock, the Optionee will generally not recognize any gain or loss with respect to the surrender of such shares to the Company. (But see the discussion above relating to the alternative minimum tax and the discussion below relating to surrendered shares that were acquired upon the exercise of an ISO.) The Optionee will have the following tax basis in the shares acquired on the exercise of the ISO: as to the number of shares acquired that equals the number of shares surrendered, the Optionee's tax basis will be equal to the tax basis of the shares surrendered and the Optionee will have a carryover holding period for purposes of determining any gain or loss on a sale of those shares; as to the balance of the shares received on the option exercise, the Optionee will have a tax basis equal to the cash, if any, paid by him to the Company upon the exercise of the option and a holding period (for purposes of determining gain or loss on a sale of those shares) that begins on the date of option exercise. As to all of the shares acquired on the exercise of the option, a new two-year period and one-year period (referred to above) will be determined based on the date of option exercise.

        However, if the surrendered shares were themselves acquired by the Optionee upon the exercise of an ISO and the surrender of such shares occurs within the two-year period or one-year period referred to above, the Optionee will generally recognize ordinary income in the year of the surrender to the extent that the fair market value of the surrendered shares on the date they were acquired exceeds the Optionee's tax basis with respect to such shares. At the present time, the IRS has proposed that the Company will have no income tax withholding obligation with respect to this income but may have an

7


obligation to report this income on a periodic filing to the IRS. The Optionee will have the following tax basis in the shares acquired on the exercise of the ISO: as to the number of shares acquired that equals the number of shares surrendered, the Optionee's tax basis will be equal to the tax basis of the shares surrendered and the Optionee will have a carryover holding period for purposes of determining any gain or loss on a sale of those shares; as to the balance of the shares received on the option exercise, the Optionee will have a tax basis equal to the cash (if any) paid by him to the Company upon the exercise of the option plus any compensation income reported by him with respect to the Disqualifying Disposition, and a holding period (for purposes of determining gain or loss on a sale of those shares) that begins on the date of option exercise. As to all of the shares acquired on the exercise of the option, a new two-year period and one-year period (referred to above) will be determined based on the date of option exercise.

        In general, the federal income tax consequences to the Company of the grant and exercise of ISOs under the Employee Plan and the sale of shares purchased on the exercise of ISOs are as follows: The grant of an ISO results in no federal income tax consequences to the Company. But see the discussion above relating to income tax withholding and FICA and FUTA taxes with respect to the Option Spread upon the exercise of an ISO. In any year in which the Optionee recognizes ordinary income (as a result of a Disqualifying Disposition of the shares), the Company is entitled to a corresponding income tax deduction, assuming such compensation to the Optionee is reasonable in amount and any required withholding and reporting obligations are satisfied by the Company. Notwithstanding the foregoing, Section 162(m) of the Code limits the tax deduction which the Company may take for otherwise deductible compensation payable to certain executive officers of the Company to the extent that compensation paid to such an officer for any year exceeds $1 million, unless such compensation is performance-based, is approved by the Company's stockholders and meets certain other criteria. Although the Company intends that the Employee Plan will satisfy the requirements that option grants thereunder be considered performance-based for purposes of Section 162(m) of the Code, there can be no assurance such awards will satisfy such requirements.

        (b)   Non-ISO's: There is no limit on the aggregate fair market value of stock covered by options that do not qualify as ISO's that may be granted to an individual in any year or on the aggregate fair market value of non-ISO's that first become exercisable in any year. Generally, no taxable income will be recognized by the Optionee and no income tax deduction will be allowed to the Company upon the grant of a non-ISO. Upon the exercise of a non-ISO, the Optionee will realize an amount of ordinary income equal to the excess of the fair market value of the shares at the time of exercise over the option exercise price (even though the Optionee will have received no cash), and the Company will be entitled to an income tax deduction in the same amount, subject to the reasonableness of the compensation and the fulfillment by the Company of any required reporting and withholding obligations, and subject further to the limitations of Section 162(m) of the Code (which are described above). Any difference between (i) the greater of (a) the fair market value of the shares at the time of option exercise, or (b) the option exercise price, and (ii) amount realized by the Optionee on the disposition of the shares will be taxable as capital gain or loss (short-term or long-term, as the case
may be.)

        With respect to employees of the Company, the Company will be obligated to withhold income taxes and the employee's share of FICA taxes, and to pay the employer's share of such taxes, at the time of the exercise of a non-ISO.

        (c)   The Employee Plan is not a "qualified" stock bonus, pension or profit-sharing plan within the meaning of Section 401 of the Code.

        (d)   The principal state, local and foreign tax income tax consequences of the issuance and exercise of options, and subsequent stock dispositions, are discussed below:

        State, local and foreign income tax consequences may, depending on the jurisdiction, differ from the federal income tax consequences of the granting and exercise of an option and any later sale by the

8


Optionee of his option stock. There may also be, again depending on the jurisdiction, transfer or other taxes imposed in connection with a disposition, by sale, bequest or otherwise, of option stock. Optionees should consult their personal tax advisors with respect to the specific state, local, foreign and other tax consequences to them of option grants, option exercises and stock dispositions.

The Board of Directors is of the opinion that adoption of the amendment to the Employee Plan is in the best interests of the Company in that it will aid the Company in securing and retaining competent management personnel and other employees by making it possible to offer them an opportunity to acquire stock of the Company and thereby increase their proprietary interest in the Company's success.


The Board Recommendsunanimously recommends a Votevote in Favor of Proposal 2

8




PROPOSAL 3


APPROVAL OF AMENDMENT TO THE
1998 DIRECTORS STOCK OPTION PLAN

        In December 1998, the Company adopted the 1998 Directors' Stock Option Plan (the "Directors' Plan") under which the Company may, from time to time, issue options exercisable for shares of Common Stock. A total of 300,000 shares of Common Stock are reserved for issuance under the Directors' Plan. The Board of Directors has adopted an amendment to the Directors' Plan to provide for the automatic grant of options to purchase 15,000 shares of common stock to each newly appointed or elected director. Adoption of such amendment requires stockholder approval. A copy of the Directors' Plan, as amended, is attached hereto as Annex B.

        The following description of the Directors' Plan is qualified in its entirety by reference to such Plan, a copy of which is attached to this Proxy Statement as Annex B and is incorporated by reference herein.

        All of the Company's directors are eligible to participate in the Directors' Plan.

        Options granted under the Directors' Plan are not intended to be ISOs. For Federal income tax purposes, directors will realize ordinary income upon exercise of options granted under the Directors' Plan measured by the excess of the fair market value of the shares at the time of exercise over the option price (even though the optionee will have received no cash), and the Company will be entitled to a deduction in the same amount. Any difference between the greater of such market value or option price and the price at which the optionee may subsequently sell the shares will be treated as gain or loss from the sale or disposition of a capital asset. See "Income Tax Consequences" under Proposal 2 above for a further discussion of the tax treatment of nonstatutory stock options.

        The Board administers the Directors' Plan. The Board has the power to construe and interpret the Directors' Plan but not to determine the persons to whom or the dates on which options will be granted, the number of shares to be subject to each option, the time or times during the term of each option within which all or a portion of such option may be exercised, the exercise price, the type of consideration or the other terms of the option except to the extent specified in the Directors' Plan.

        The Directors' Plan provides for the automatic grant to each of the Company's directors of options to purchase 1,500 shares of Common Stock on the last business day of the Company's fiscal year. In addition, an option to purchase 750 shares of Common Stock is granted automatically on the last business day of each fiscal quarter to each non-employee director of the Company, provided that the director attended any regularly scheduled meeting of the Board, if any, which was held during such quarter.

        Each option grant is at an exercise price equal to the fair market value of the common stock on the date of grant. Options granted prior to July 31, 2000 have a term of ten years and options granted

9


after that date have a term of five years (subject, in each case, to termination three months following the optionee's ceasing to serve as a director of the Company). The fiscal year options are exercisable in two equal annual installments commencing on the first anniversary of the grant thereof and the quarterly options are exercisable in full immediately.

        As amended, the Directors' Plan will provide for the automatic grant of an option to purchase 15,000 shares of the Company's common stock to each person who is appointed or elected for the first time to be a director of the Company. All terms and conditions of such option shall be substantially the same as all other options granted under the Directors' Plan, including but not limited to the determination of the exercise price and the term of the option, provided, however, that the options will vest in three equal annual installments commencing on the date of grant.

        The Board of Directors is of the opinion that adoption of the amendment to the Directors' Plan is in the best interests of the Company in that it will aid the Company in securing and retaining the services of persons having the breadth of professional and business experience who, through their efforts and expertise, can make a significant contribution to the success of the Company's business by serving as members of the Company's Board of Directors. The Board believes that the amendment to the Directors' Plan will provide an additional incentive for such directors by making it possible to offer them an opportunity to acquire stock of the Company and thereby increase their proprietary interest in the Company's success upon their acceptance of a position as a director of the Company.

        As of November 14, 2003, options to purchase 132,750 were outstanding under the Directors' Plan and 167,250 are available for future grants.


The Board Recommends a Vote in Favor of Proposal 3.


PROPOSAL 4


RATIFICATION OF SELECTION OF
OF INDEPENDENT AUDITORS
REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board has selected Ernst & Young LLP as the Company'sour independent auditorsregistered public accounting firm for the fiscal year ending July 31, 20042006 and has further directed that management submit the selection of the independent auditorsregistered public accounting firm for ratification by the stockholders at the Annual Meeting. The Audit Committee has considered whether the provision of non-audit professional services rendered by Ernst & Young LLP, as discussed in the section entitled “Independent Registered Public Accounting Firm” below and disclosed elsewhere in this proxy statement, is compatible with Ernst & Young maintaining their independence. Ernst & Young LLP has audited the Company'sour financial statements for the past fourteensixteen years. A representative of Ernst & Young LLP is expected to be present at the Annual Meeting, will have an opportunity to make a statement if he so desires, and will be available to respond to appropriate questions.

Stockholder ratification of the selection of Ernst & Young LLP as the Company'sour independent auditorsregistered public accounting firm is not required by the Company's by-lawsour By-laws or otherwise; however, the Board is submitting the selection of Ernst & Young LLP to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent auditorsregistered public accounting firm at any time during the year if it determines that such a change would be in theour or our stockholders’ best interests of the Company and its stockholders.interests.


The Board Recommendsof Directors unanimously recommends a Votevote in Favor of Proposal 4.
3


TRANSACTION OF OTHER BUSINESS

The Board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment.


10

OWNERSHIP OF SECURITIES


OWNERSHIP OF SECURITIES

The following table sets forth stock ownership information as of November 14, 200315, 2005 concerning (i) each directorof our directors and persons nominated to become directors, of the Company, (ii) each person (including any "group"“group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934)Act) who is known by the Companyus to beneficially own more than five (5%) percent of the outstanding shares of the Company'sour common stock, (iii) the Chief Executive Officer and the other executive officers named in the Summary Compensation Table below, and (iv) the Company'sour executive officers and directors as a group:


  
 Shares Beneficially Owned(1)
 

 

 

 

Shares Beneficially Owned(1)

 

Name and Address
of Beneficial Owners
 Position with the Company
 Number
 Percent
of Total
 

 

 

 

Position with Cantel

 

    Number    

 

Percent of
Total

 

Charles M. Diker
150 Clove Road
Little Falls, NJ 07424		 Chairman of the Board and Director 1,439,499(2)15.1%

Charles M. Diker
150 Clove Road
Little Falls, NJ 07424

 

Chairman of the Board and Director

 

 

2,119,020

(2)

 

 

13.3

%

 


Alan J. Hirschfield
 
Vice Chairman of the Board and Director
 
290,749
(3)
3.1
%

Alan J. Hirschfield

 

Vice Chairman of the Board and Director

 

 

309,598

(3)

 

 

2.0

%

 


Robert L. Barbanell
 
Director
 
77,284
(4)
*
 

Robert L. Barbanell

 

Director

 

 

89,855

(4)

 

 

*

 

 

Alan R. Batkin

Alan R. Batkin

 

Director

 

 

33,750

(5)

 

 

*

 

 


Joseph M. Cohen
 
Director
 
47,750
(5)
*
 

Joseph M. Cohen

 

Director

 

 

61,125

(6)

 

 

*

 

 


Darwin C. Dornbush, Esq.
 
Secretary and Director
 
37,170
(6)
*
 

Darwin C. Dornbush, Esq.

 

Secretary and Director

 

 

60,375

(7)

 

 

*

 

 


Spencer Foreman, M.D.
 
Nominee for Director
 
0
 
*
 

Spencer Foreman, M.D.

 

Director

 

 

30,375

(8)

 

 

*

 

 


Morris W. Offit
 
Director
 
50,250
(7)
*
 

Elizabeth McCaughey

Elizabeth McCaughey

 

Director

 

 

5,750

(9)

 

 

*

 

 


James P. Reilly
 
President and CEO and Director
 
307,920
(8)
3.3
%

James P. Reilly

 

President and CEO and Director

 

 

623,887

(10)

 

 

3.9

%

 


John W. Rowe, M.D.
 
Director
 
48,000
(9)
*
 

Fred L. Shapiro, M.D.
 
Director
 
37,579
(10)
*
 

Bruce Slovin
 
Director
 
246,750
(11)
2.6
%

Bruce Slovin

 

Director

 

 

277,225

(11)

 

 

1.8

%

 

Andrew A. Krakauer

Andrew A. Krakauer

 

Executive Vice President and COO

 

 

75,000

(12)

 

 

*

 

 

Craig A. Sheldon

Craig A. Sheldon

 

Senior Vice President and CFO

 

 

120,462

(13)

 

 

*

 

 


Roy K. Malkin
 
President and CEO of Minntech Corporation.
 
73,125
(12)
*
 

Roy K. Malkin

 

President and CEO of Minntech Corporation, a subsidiary of Cantel

 

 

158,475

(14)

 

 

*

 

 


Craig A. Sheldon
 
Senior Vice President and CFO
 
24,363
(13)
*
 

William J. Vella
 
President and CEO of Carsen Group Inc.
 
54,303
(14)
*
 

William J. Vella

 

President and CEO of Carsen Group Inc., a subsidiary of Cantel

 

 

90,000

(15)

 

 

*

 

 


Strong Capital Management, Inc.
 
Stockholder
 
667,492
(15)
7.2
%

All officers and directors as a group of 16 persons
 
 
 
2,753,284
(16)
27.3
%

FMR Corp.
82 Devonshire Street
Boston, MA 02109

FMR Corp.
82 Devonshire Street
Boston, MA 02109

 

5% Stockholder

 

 

1,144,450

(16)

 

 

7.4

%

 

All officers and directors as a group of 18 persons

All officers and directors as a group of 18 persons

 

 

 

 

4,353,427

(17)

 

 

25.2

%

 

*

Represents beneficial ownership of less than one percent (1%).

(1)

Unless otherwise noted, Cantel believeswe believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them.

    A person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days from November 14, 200315, 2005 upon the exercise of options. Each beneficial owner'sowner’s percentage ownership is determined by assuming that options that are held by such person (but not those held by any other person) and which are exercisable within 60 days from November 14, 200315, 2005 have been exercised.

11

(2)
Includes 237,750429,375 shares which Mr. Diker may acquire pursuant to stock options. Does not include an aggregate of 919,3841,291,944 shares owned by (i) Mr. Diker'sDiker’s wife, (ii) certain trusts for the benefit of


Mr. Diker'sDiker’s children, (iii) accounts for his grandchildren over which Mr. Diker exercises investment discretion, (iv) certain other accounts over which Mr. Diker exercises investment discretion, (v) the DicoGroup, Inc., a corporation of which Mr. Diker serves as Chairman of the Board, and (vi) a non-profit corporation of which Mr. Diker and his wife are the principal officers and directors.directors; Mr. Diker disclaims beneficial ownership as to all of the foregoing 1,291,944 shares.

(3)

Includes 34,50046,875 shares which Mr. Hirschfield may acquire pursuant to stock options.

(4)

Includes 29,25042,375 shares which Mr. Barbanell may acquire pursuant to stock options. Does not include 3,750 shares owned by Mr. Barbanell'sBarbanell’s wife as to which Mr. Barbanell disclaims beneficial ownership.

(5)

Includes 26,25030,000 shares which Mr. Batkin may acquire pursuant to stock options.

(6)     Includes 28,875 shares which Mr. Cohen may acquire pursuant to stock options.

(6)

(7)     Includes 32,25037,875 shares which Mr. Dornbush may acquire pursuant to stock options.

(7)
Includes 26,250

(8)     Consists of 30,375 shares which Mr. OffitDr. Foreman may acquire pursuant to stock options.

(8)

(9)     Consists of 5,750 shares which Ms. McCaughey may acquire pursuant to stock options.

(10)   Includes 137,745471,875 shares which Mr. Reilly may acquire pursuant to stock options. Does not include 130,672196,008 shares owned by Mr. Reilly'sReilly’s wife as to which Mr. Reilly disclaims beneficial ownership.

(9)

(11)   Includes 48,000 shares which Dr. Rowe may acquire pursuant to stock options.

(10)
Includes 22,500 shares which Dr. Shapiro may acquire pursuant to stock options. Does not include 15,500 shares owned by certain trusts for the benefit of Dr. Shapiro's grandchildren.

(11)
Includes 39,75055,875 shares which Mr. Slovin may acquire pursuant to stock options.

(12)

   Consists of 75,000 shares which Mr. Krakauer may acquire pursuant to stock options.

(13)   Includes 73,125109,762 shares which Mr. Sheldon may acquire pursuant to stock options.

(14)   Consists of 158,475 shares which Mr. Malkin may acquire pursuant to stock options.

(13)
Includes 21,701 shares which Mr. Sheldon may acquire pursuant to stock options.

(14)
Includes 20,625

(15)   Consists of 90,000 shares which Mr. Vella may acquire pursuant to stock options.

(15)

(16)   Based upon information as of June 30, 2005 set forth in an Information Statement on Schedule 13Ga 13F Holdings Report filed by Strong Capital Management, Inc. and Richard S. Strongthe beneficial owner with the SEC.

(16)

(17)   Includes 768,2381,821,301 shares which may be acquired pursuant to stock options.


12


Executive Officers of the Company
Cantel

Name

Name

Age

Position with the Company


Charles M. Diker



68

70



Chairman of the Board


James P. Reilly



63

65



President and Chief Executive Officer


Roy K. Malkin

Andrew A. Krakauer



57

50



Executive Vice President and CEO of Minntech CorporationChief Operating Officer


Eric W. Nodiff

48

Senior Vice President and General Counsel

Seth R. Segel



34

36



Senior Vice President—Corporate Development


Craig A. Sheldon



41

43



Senior Vice President and Chief Financial Officer


Steven C. Anaya

35

Vice President and Controller

Roy K. Malkin

59

President and CEO of Minntech

Richard Allen Orofino

66

President and CEO of Crosstex International, Inc., a subsidiary of Cantel

William J. Vella



47

49



President and CEO of Carsen Group Inc.


Steven C. Anaya

33

Vice President and Controller

 

See "Business“Business Experience of Directors"Directors” above for biographical data with respect to Messrs. Diker and Reilly.

Mr. MalkinKrakauer has served as our Executive Vice President and Chief ExecutiveOperating Officer of Minntech since September 2001, andAugust 2004. From 1998 to February 2004, he served as President of the Ohmeda Medical Division of Instrumentarium / GE Healthcare. Prior thereto, Mr. Krakauer served Ohmeda as President of the Specialty Products Division and Chief Executive Officer of MediVators since June 1999. From June 1984 until JulyBusiness Development from 1994 and from November 1996 until May 1999, through 1998.

Mr. Malkin wasNodiff has served as our Senior Vice President and Chief Executive OfficerGeneral Counsel since January 1, 2005. For more than five years prior thereto he served as a partner of RKM Enterprises Ltd.,Dornbush Schaeffer Strongin & Weinstein, LLP, a multi-national consulting group for the healthcare industry. From July 1994 until October 1996, Mr. Malkin was employed by Steris Corporation, most recentlylaw firm that served as Senior Vice President.our outside general counsel.

Mr. Segel was appointedhas served as our Senior Vice President—Corporate Development of the Company onsince November 18, 2002. From May 1999 through October 2002, he served in various management positions at Jupiter Media Metrix, Inc. (Nasdaq)(NASDAQ), a provider of global market research, and LiveTechnology Holdings, Inc., a company owned and then sold by Jupiter Media Metrix in May 2002. Mr. Segel served most recently as Senior Vice President of Finance and Corporate Development at Jupiter Media Metrix and as Managing Director of LiveTechnology. From August 1996 through April 1999, Mr. Segel served as Senior Associate at Broadview International LLC, an investment bank. Mr. Segel has a Masters Degree in Business Administration.research.

Mr. Sheldon has served as our Senior Vice President and Chief Financial Officer of the Company since November 2002. From November 2001 through October 2002 he served as our Vice President and Chief Financial Officer. From November 1994 until October 2001 Mr. Sheldon served as our Vice President and Controller of the Company.Controller. Mr. Sheldon is a certified public accountant.

        Mr. Vella has served as President and Chief Executive Officer of Carsen Group Inc. since October 2001, as President and Chief Operating Officer of Carsen from December 1996 until October 2001, as Executive Vice President from January 1995 until November 1996, and prior thereto in various sales and sales management positions since October 1981.

Mr. Anaya, who has been employed by the Companyus since March 2002, has served as Vice President since November 20, 2003 and Controller since November 1, 2002. Prior thereto, he served as our Assistant Controller of the Company.Controller. From April 1999 through October 2002,2001, Mr. Anaya was employed by Great Universal Inc., most recently as Corporate Controller. Great Universal Inc. is a holding company for numerous companies located in the United States and Europe primarily in the telecommunications and computer industries. From December 1992 through April 1999, Mr. Anaya was employed by Deloitte & Touche LLP, most recently as Audit Manager. Mr. Anaya is a certified public accountant.

13Mr. Malkin has served as President and Chief Executive Officer of Minntech since September 2001 and as President and Chief Executive Officer of Medivators, Inc. (former subsidiary of Cantel that merged into Minntech) since June 1999.

Mr. Orofino, a former shareholder of Crosstex, has served as President of Crosstex since 2000 and in other executive capacities at Crosstex since 1968.

Mr. Vella has served as President and Chief Executive Officer of Carsen Group since October 2001, as President and Chief Operating Officer of Carsen Group from December 1996 until October 2001, as Executive Vice President of Carsen Group from January 1995 until November 1996, and prior thereto in various sales and sales management positions at Carsen Group since October 1981.

12





EXECUTIVE COMPENSATION AND RELATED INFORMATION

Summary of Cash and Certain Other Compensation

The following table sets forth, for the fiscal years ended July 31, 2003, 20022005, 2004 and 2001,2003, compensation, including salary, bonuses, stock options and certain other compensation, paid by us to the Company toChairman of the Board, the Chief Executive Officer and to the Company'sour four most highly compensated executive officers other than the Chairman and the Chief Executive Officer during fiscal 2003:2005:


Summary Compensation Table

 

 

 

Annual
Compensation(1)

 

Long-Term
Compensation
Awards(2)

 

 

 

Name and Principal Position

 

 

 

Year

 

Salary
($)

 

Bonus
($)

 

Shares
Underlying
Options(#)

 

All Other
Compensation
($)(3)

 

Charles M. Diker

 

2005

 

225,000

 

0

 

 

76,500

 

 

 

11,388

 

 

Chairman of the Board

 

2004

 

225,000

 

0

 

 

2,250

 

 

 

6,691

 

 

 

2003

 

225,000

 

0

 

 

2,250

 

 

 

6,708

 

 

James P. Reilly(4)

 

2005

 

385,875

 

338,605

 

 

86,500

 

 

 

15,120

 

 

President and Chief Executive Officer

 

2004

 

367,500

 

214,988

 

 

189,750

 

 

 

11,420

 

 

 

 

2003

 

350,000

 

47,250

 

 

2,250

 

 

 

13,515

 

 

Andrew A. Krakauer(5)

 

2005

 

253,846

 

165,000

 

 

75,000

 

 

 

10,371

 

 

Executive Vice President and Chief Operating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Craig A. Sheldon(6)

 

2005

 

223,750

 

125,000

 

 

75,000

 

 

 

12,128

 

 

Senior Vice President and Chief Financial

 

2004

 

201,250

 

75,000

 

 

0

 

 

 

7,164

 

 

Officer

 

2003

 

186,250

 

28,400

 

 

30,000

 

 

 

6,404

 

 

Roy K. Malkin(7)

 

2005

 

333,750

 

368,094

 

 

112,500

 

 

 

12,308

 

 

President and Chief Executive Officer of

 

2004

 

311,250

 

50,000

 

 

0

 

 

 

6,621

 

 

Minntech

 

2003

 

293,750

 

0

 

 

15,000

 

 

 

6,944

 

 

William J. Vella(8)

 

2005

 

293,450

 

130,704

 

 

75,000

 

 

 

6,443

 

 

President and Chief Executive Officer of

 

2004

 

256,100

 

143,563

 

 

0

 

 

 

4,814

 

 

Carsen Group

 

2003

 

212,220

 

24,218

 

 

37,500

 

 

 

3,237

 

 

(1)



Annual
Compensation (1)
Long-Term
Compensation
Awards(2)
Name and
Principal Position
Year
Salary
($)
Bonus
($)
Options
(#)
Charles M. Diker
Chairman of the Company		2003
2002
2001		225,000
175,000
160,000		0
0
0		1,500
1,500
1,500

James P. Reilly(3)
President and Chief Executive
Officer of the Company

2003
2002
2001

350,000
318,347
303,188

47,250
250,000
171,757

1,500
1,500
1,500

Roy K. Malkin(4)
President and Chief Executive
Officer of Minntech Corporation

2003
2002
2001

293,750
250,530
192,500

0
150,822
46,000

10,000
30,000
0

Craig A. Sheldon(5)
Senior Vice President and Chief
Financial Officer of the Company

2003
2002
2001

186,250
166,250
136,250

28,400
50,000
40,000

20,000
18,750
0

William J. Vella(6)
President and Chief Executive
Officer of Carsen Group Inc.

2003
2002
2001

212,220
193,000
179,444

24,218
0
103,548

25,000
15,000
0
(1)
The Company          We did not pay or provide other forms of annual compensation (such as perquisites and other personal benefits) to the above-named executive officers having a value exceeding the lesser of $50,000 or 10% of the total annual salary and bonus reported for such officers with the exception of reimbursement to a Companycompany affiliated with Mr. Diker of office expenses amounting to $36,000 $36,000in each of fiscal 2005, 2004 and $24,000 in fiscal 2003, 2002 and 2001, respectively.

(2)

The Company has          We have no long-term incentive compensation plan other than itsour 1997 Employee Stock Option Plan and the 1998 Directors'Directors’ Stock Option Plan described herein and various individually granted options, a 401(k) profit sharing plan and a Canadian profit sharing plan. The Company doesWe do not currently award stock appreciation rights, restricted stock awards or long-term incentive plan pay-outs.

(3)

          This amount consists of (i) term life insurance premiums paid by us and (ii) contributions paid or accrued by us under our 401(k) plan for the benefit of the named executive.

James P.(4)          Mr. Reilly is party to an employment agreement with the Company that expires on July 31, 2005.2007. Under the Agreement, Mr. Reillyagreement, he is entitled topaid (i) an annual base salary of $367,500 (for$450,000 for fiscal 2004) subject to annual increases equal to no less than 5% or a cost of living formula,2006 and $500,000 for fiscal 2007 and (ii) incentive compensation equal to 21/4%3-3/8% of his annual base salary for every one cent ($.01)


increase in the diluted earnings per share of the Company'sour common stock (as adjusted to exclude incentive compensation paid or payable to Mr. Reilly)in accordance with the agreement) for the current year over the prior year, (iii) participation in employee health, insurance and other benefit plans, (iv) maintenance by the Company of a life insurance policy on the life of Mr. Reilly in the face amount of $500,000

14

    payable to his designated beneficiary, and (v) use of a Company owned or leased automobile. In addition, Mr. Reilly was granted a five-year option to purchase 6,950 shares of Common Stock with an exercise price of $14.25. He will also be granted a five-year option to purchase 118,050 shares of Common Stock upon approval of the proposed amendment to the Company's 1997 Employee Stock Option Plan (Proposal 2) at the Annual Meeting. The exercise price will be the fair value of the shares on the date of grant.year. In the event of a "Change“Change in Control"Control” (as defined in the employment agreement), Mr. Reilly may terminate his employment and be entitled to receive in a lump sum an amount equal to (i) if during the first contract year, 150% of his base salary and bonus with respect to fiscal 2005 and (ii) if during the second contract year, the greater of (i)(a) $500,000 or (ii) the sum(b) 100% of one year's Base Salaryhis base salary and the amount of Mr. Reilly's prior year incentive compensation.bonus with respect to fiscal 2006. In addition, upon a Change in Control, all stock options held by him vest in full. During the five-year period following the termination of Mr. Reilly'sReilly’s employment (for any reason), he will be paid a consulting fee of approximately $100,000 per year, adjusted by a cost of living formula.

(4)
Roy K. Malkin

(5)          Mr. Krakauer’s employment commenced with us on August 30, 2004. He is party to an employment agreement with Minntech Corporation that expires on OctoberAugust 31, 2004.2007. Under the Agreement,agreement, Mr. MalkinKrakauer is entitled topaid (i) an annual base salary of $315,000 (commencing November 1, 2003)$288,750 (for the twelve month period ending August 29, 2006), subject to annual increases equal to no less than 5% or a cost of living formula, and (ii) an annual incentive bonus ranging from 30% to 70% of his base salary (determined on a formula basis) for each full fiscal year (commencing with the year ended July 31, 2005) in which our adjusted pre-tax income exceeds 90% of our budgeted pre-tax income. In the event of a “Change in Control” (as defined in the employment agreement), Mr. Krakauer may terminate his employment and be entitled to receive (i) in a lump sum an amount equal to 150% of the base salary and incentive compensation paid to Mr. Krakauer during the last completed fiscal year if termination occurs after the end of the first contract year, or (ii) $275,000, if such termination occurs prior to the end of the first contract year. In addition, upon a Change in Control, all stock options held by him vest in full.

(6)          Mr. Sheldon is party to an employment agreement that expires on October 31, 2007. Under the agreement, he is paid (i) an annual base salary of$242,000 (for the twelve month period ending October 31, 2006), subject to annual increases of no less than 5% or a cost of living formula and (ii) an annual discretionary bonus. In the event of a “Change in Control” (as defined in the employment agreement), Mr. Sheldon may terminate his employment and be entitled to receive in a lump sum an amount equal to 150% of the base salary and bonus paid to Mr. Sheldon during the last completed contract year. In addition, upon a Change in Control, all stock options held by him vest in full.

(7)          Mr. Malkin is party to an employment agreement with Minntech that expires on July 31, 2007. Under the agreement, Mr. Malkin is paid (i) an annual base salary of $357,680 (for the twelve month period ending October 31, 2006), subject to annual increases of no less than 5% or a cost of living formula and (ii) incentive compensation equal to 5%a “designated percentage” of the excess of Pretax Income (as defined in the annual earningsagreement) of Minntech before interestfor a subject fiscal year over the highest Pretax Income of Minntech since fiscal 2004, with the “designated percentage” being 5% of the first ten percent excess in Pretax Income and taxes over certain amounts which are set forth10% of any additional excess in the agreement, (iii) participation in employee health, insurance and other benefit plans, and (iv) an automobile allowance.Pretax Income. In the event of a "Change“Change in Control"Control” (as defined in the employment agreement), Mr. Malkin may terminate his employment and be entitled to receive in a lump sum an amount equal to 150% of the base salary and incentive compensation paid to Mr. Malkin during the last completed fiscalcontract year.

(5)
Craig A. Sheldon is party to an employment agreement with the Company that expires on October 31, 2004. Under the Agreement, Mr. Sheldon is entitled to (i) an annual base salary of $205,000 (commencing November 1, 2003), subject to annual increases equal to no less than 5% or In addition, upon a cost of living formula, (ii) an annual discretionary bonus, (iii) participationChange in employee health, insurance and other benefit plans, (iv) maintenanceControl, all stock options held by the Company of a life insurance policy on the life of Mr. Sheldonhim vest in the face amount of $250,000 payable to his designated beneficiary, and (v) an automobile allowance. In the event of a "Change in Control" (as defined in the employment agreement), Mr. Sheldon may terminate his employment and be entitled to receive in a lump sum an amount equal to 150% of the base salary and incentive compensation paid to Mr. Sheldon during the last completed fiscal year.

(6)
full.

(8)Mr. Vella was paid his salary and bonus in Canadian dollars. The dollar amounts above have been translated from Canadian dollars to U.S. dollars based upon an average exchange rate during the respective fiscal year.

        On November 18, 2002, Seth R. Segel was appointed Senior Vice President—Corporate Development In connection with the expiration of the Company pursuantdistribution agreements between Carsen Group and Olympus on July 31, 2006, if Mr. Vella’s employment with Carsen Group is terminated at any time after August 30, 2006, he will be entitled to receive in a two-year employment agreement that expires on November 17, 2004. Mr. Segel's employment agreement provides for (i)lump sum an annual base salary of $189,000 (commencing November 18, 2003), (ii) bonuses of $50,000 following the first year of employment and $50,000 on August 1, 2004, (iii) incentive compensationamount equal to .45% of the total consideration paid by the Company with respect to an acquisition during the employment period on which Mr. Segel plays a lead role on the transaction (approximately $70,000 during the first year of Mr. Segel's employment), (iv) participation in employee health, insurance and other benefit plans, (v) maintenance by the Company of a life insurance policy on the life of Mr. Segel in the face amount of $250,000 payable to his designated beneficiary, and (vi) an automobile allowance. In addition, upon commencement200% of his employment, Mr. Segel was granted a five-year non-plan option to purchase 50,000 shares of Common Stock with an exercise price of $10.59 (the fair value of the shares on the date of grant). In the event of a "Change in Control" (as defined in the employment agreement)total fiscal 2005 cash compensation (i.e., the options will automatically become fully vested and Mr. Segel may terminate his employment and

15


continue to receive his base salary and bonus following such termination through the end of the two-year term of the employment agreement.bonus) and all stock options held by him will vest in full.


Stock Options

The following stock option information is furnished for the fiscal year ended July 31, 20032005 with respect to the Company'sour Chief Executive Officer and theour other executive officers of the Company named in the Compensation Table above, for stock options granted during such fiscal year. Stock options were granted without tandem stock appreciation rights.


Option Grants in Last Fiscal Year

 

 

 

% of Total

 

 

 

 

 

Potential Realizable

 

 

 

Number of

 

Options

 

 

 

 

 

Value at Assumed

 

 

 

Shares

 

Granted to

 

 

 

 

 

Annual Rates of Stock

 

 

 

Underlying

 

Employees

 

Exercise

 

 

 

Price Appreciation

 

 

 

Options

 

During the

 

Price Per

 

Expiration

 

for Option Term($)(1)

 

Name

 

 

 

Granted (#)

 

Fiscal Year

 

Share($)

 

Date

 

      5%      

 

      10%      

 

Charles M. Diker

 

 

1,500

(2)

 

 

.17

%

 

 

17.51

 

 

 

7/30/10

 

 

 

7,257

 

 

16,035

 

 

 

75,000

(3)

 

 

8.68

%

 

 

20.10

 

 

 

12/13/09

 

 

 

416,494

 

 

920,344

 

James P. Reilly

 

 

1,500

(2)

 

 

.17

%

 

 

17.51

 

 

 

7/30/10

 

 

 

7,257

 

 

16,035

 

 

 

 

85,000

(4)

 

 

9.84

%

 

 

17.51

 

 

 

7/30/10

 

 

 

411,204

 

 

908,653

 

Andrew A. Krakauer

 

 

75,000

(3)

 

 

8.68

%

 

 

17.14

 

 

 

8/29/09

 

 

 

355,160

 

 

784,811

 

Roy K. Malkin

 

 

112,500

(3)

 

 

13.02

%

 

 

20.10

 

 

 

12/13/09

 

 

 

624,742

 

 

1,380,516

 

Craig A. Sheldon

 

 

75,000

(3)

 

 

8.68

%

 

 

20.10

 

 

 

12/13/09

 

 

 

416,494

 

 

920,344

 

William J. Vella

 

 

75,000

(3)

 

 

8.68

%

 

 

20.10

 

 

 

12/13/09

 

 

 

416,494

 

 

920,344

 

(1)

 
  
  
  
  
 Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
for Option Term($)(1)
 
  
 % of Total
Options
Granted to
Employees
During the
Fiscal Year
  
  
 
 Number of
Shares
Underlying
Options
Granted
  
  
Name
 Exercise
Price Per
Share($)
 Expiration
Date
 5%
 10%
Charles M. Diker 1,500(2)1.22 12.95 7/30/08 5,367 11,859

James P. Reilly
 
1,500(2
)
1.22
 
12.95
 
7/30/08
 
5,367
 
11,859

Roy K. Malkin
 
10,000(3
)
8.13
 
11.44
 
3/11/08
 
31,607
 
69,842

Craig A. Sheldon
 
20,000(3
)
16.26
 
11.44
 
3/11/08
 
63,213
 
139,685

William J. Vella
 
25,000(3
)
20.33
 
11.44
 
3/11/08
 
79,017
 
174,606
(1)
Represents the potential realizable value of the options granted at assumed 5% and 10% rates of compounded annual stock price appreciation from the date of grant of such options to the date of the option expiry.

expiration.

(2)

These options, were granted under the Company'sour 1998 Directors'Directors’ Stock Option Plan. ThePlan, have an exercise price per share of the options isequal to the market value per share on the date of grant. The options are subject to vesting as follows: 50% of the total shares covered by the options vest on the first anniversary of the date of grant and the remaining 50% vest on the second anniversary of such date of grant.

(3)

These options, were granted under the Company's 1997 Employee Stock Option Plan. ThePlan, have an exercise price equal to the market value per share on the date of grant and are currently immediately exercisable.

(4)          This option, granted under the options is1997 Employee Stock Option Plan, has an exercise price equal to the market value per share on the date of grant. The options vest under various installments during the option term, with no option vesting priorbecame exercisable as to the first anniversary42,500 shares immediately and will become exercisable as to an additional 21,250 shares on each of the date of the grant.


July 31, 2006 and July 31, 2007.

Option Exercise and Holdings

The following information is furnished for fiscal 20032005 with respect to the Company'sour Chief Executive Officer and theour other executive officers of the Company named in the Compensation Table above, for stock option exercises during such fiscal year and unexercised stock option values at July 31, 2003.2005.


16



Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-end Option Values

 

 

 

 

 

 

Number of Shares

 

Value of

 

 

 

Shares

 

 

 

Underlying Unexercised

 

Unexercised in-the-Money

 

 

 

Acquired On

 

Value

 

Options at 7/31/05

 

Options at 7/31/05 ($)

 

Name

 

 

 

Exercise(#)

 

Realized($)(1)

 

Exercisable

 

Non-Exercisable

 

Exercisable

 

Non-Exercisable

 

Charles M. Diker

 

 

4,500

 

 

 

60,773

 

 

 

429,375

 

 

 

2,625

 

 

4,989,443

 

 

428

 

 

James P. Reilly

 

 

4,500

 

 

 

62,438

 

 

 

471,875

 

 

 

45,125

 

 

4,927,406

 

 

428

 

 

Andrew A. Krakauer

 

 

—

 

 

 

—

 

 

 

75,000

 

 

 

—

 

 

27,750

 

 

—

 

 

Roy K. Malkin

 

 

11,250

 

 

 

251,325

 

 

 

147,225

 

 

 

25,275

 

 

323,518

 

 

243,332

 

 

Craig A. Sheldon

 

 

14,063

 

 

 

306,995

 

 

 

102,732

 

 

 

30,318

 

 

261,868

 

 

295,697

 

 

William J. Vella

 

 

26,250

 

 

 

420,544

 

 

 

84,375

 

 

 

24,375

 

 

92,719

 

 

237,750

 

 

(1)

 
  
  
 Number of Shares
Underlying Unexercised
Options at 7/31/03
 Value of
Unexercised in-the-Money
Options at 7/31/03 ($)
Name
 Shares
Acquired On
Exercise(#)
 Value
Realized($)(1)
 Exercisable
 Non-Exercisable
 Exercisable
 Non-Exercisable
Charles M. Diker 1,500 17,055 237,750 2,250 1,900,365 0
James P. Reilly 1,500 16,995 137,745 27,255 1,210,070 223,795
Roy K. Malkin 0 0 65,625 34,375 554,006 46,994
Craig A. Sheldon 0 0 17,013 43,437 117,998 127,653
William J. Vella 0 0 16,875 45,625 123,281 133,431
(1)
Value realized is calculated as the market value of the shares exercised using the closing price of the Company'sour common stock on such exercise date. The value realized is for informational purposes only and does not purport to represent that such individual actually sold the underlying shares, or that the underlying shares were sold on the date of exercise. Furthermore, such value realized does not take into consideration individual income tax consequences.

Stock Option Plans

        The following sets forth certain information as of July 31, 2003 with respect to compensation plans of the Company under which securities of the Company may be issued:


Equity Compensation Plan Information

Plan Category
 Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights
 Weighted-average exercise
price of outstanding options,
warrants and rights($)
 Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in first column)
Equity compensation plans approved by security holders 1,141,435 9.12 998,943
Equity compensation plans not approved by security holders 372,750 6.76 N/A
Total 1,514,185 8.54 998,943

An aggregate of 2,000,0003,750,000 shares of common stock is reserved for issuance or available for grant under the Company'sour 1997 Employee Stock Option Plan, as amended (the "Employee Plan"“Employee Plan”). Options granted under the Employee Plan aremay be intended to qualify as incentive stock options within the meaning of Section 422 of the Code.ISOs or non-ISOs. The Employee Plan is administered in all respects by the Stock OptionCompensation Committee. The Stock OptionCompensation Committee may determine the employees to whom options are to be granted and the number of shares subject to each option. Under the terms of the Employee Plan, all employees of the Company or subsidiaries of the Companyour employees are eligible for option grants. The option exercise price of options granted under the Employee Plan is fixed by the Stock OptionCompensation Committee but, in the case of ISOs, must be no less than 100% of the fair market value of the shares of common stock subject to the option at the time of grant, except that in the case of an employee who possesses more than 10% of the total combined voting power of all classes of stock of the Company ("a 10% Holder"),Holder, the exercise price must be no less than 110% of said fair market value. Options may be exercised by the payment in full in cash or by the tendering or cashless exchange of shares of our common stock having a fair market value, as determined by the Stock OptionCompensation Committee, equal to the option exercise price. Options granted under the Employee Plan may not be exercised more than ten years after the date of grant, five years in the case of an incentive stock optionISO granted to a 10% Holder. All options outstanding at July 31, 20032005 under the Employee Plan have a term of five years, except for 150,000225,000 ten-year options granted to Mr. Reilly and 81,625 options granted to a former executive officer under the terms of their respective

17


employment agreements, each of which had an original term of ten years.in 1999. At July 31, 2003,2005, options to purchase 906,6851,982,462 shares of common stock at prices between $3.25$2.66 and $19.15$29.49 per share were outstanding under the Employee Plan and 826,443590,343 shares were available for grant under the Employee Plan.

An aggregate of 300,000450,000 shares of common stock was reserved for issuance or available for grant under the Company'sour 1991 Directors'Directors’ Stock Option Plan (the "1991 Directors' Plan"“1991 Directors’ Plan”), which expired in fiscal 2001. Options granted under the 1991 Directors'Directors’ Plan do not qualify as incentive stock options within the meaning of Section 422 of the Code.ISOs. At July 31, 2003,2005, options to purchase 107,25079,875 shares of common stock at prices between $3.00$2.36 and $6.83$4.55 per share (the fair market value of the shares at the time of grant) were outstanding under the 1991 Directors'Directors’ Plan. All of the options have a ten-year term and are exercisable in full. No additional options will be granted under the 1991 Directors'Directors’ Plan.

An aggregate of 300,000450,000 shares of common stock is reserved for issuance or available for grant under the Company'sour 1998 Directors'Directors’ Stock Option Plan (the "1998 Directors' Plan"“1998 Directors’ Plan”). Options granted under the 1998 Directors'Directors’ Plan do not qualify as incentive stock options within the meaning of Section 422 of the Code.ISOs. The 1998 Directors'Directors’ Plan provides for the automatic grant to each of the Company'sour directors of options to purchase 1,500 shares of common stock on the last business day of the Company'sour fiscal year. In addition, an option to purchase 750 shares of common stock is granted automatically on the last


business day of each fiscal quarter to each director (exclusive of Messrs. Diker and Reilly and any other director who is a full-time employee of the Company)Reilly) provided that the director attended any regularly scheduled meeting of the Board, if any, held during such quarter. Each suchAn option grantto purchase 15,000 shares of common stock is also granted to each person who is appointed or elected for the first time to be a director. All option grants under the 1998 Directors’ Plan are at an exercise price equal to the fair market value of the common stock on the date of grant. Options granted prior to July 31, 2000 have a term of ten years and options granted on and after July 31, 2000 have a term of five years. The fiscal year options are exercisable in two equal annual installments commencing on the first anniversary of the grant thereof and the quarterly options are exercisable in full immediately. The options granted to newly appointed or elected directors are exercisable in three equal annual installments commencing on the date of grant. At July 31, 20032005, options to purchase 127,500243,375 shares of common stock at prices between $3.41$2.27 and $17.56$26.61 per share were outstanding under the 1998 Directors'Directors’ Plan, and 172,500142,500 shares were available for grant under the 1998 Directors'Directors’ Plan.

        Between 1991We currently have outstanding non-plan options to purchase 380,281 shares at an average exercise price of $3.63. Substantially all of such options were granted to directors and 2000, Mr. Dornbush was granted ten-year non-planofficers, including options to purchase an aggregate of 9,000337,500 shares of common stock at prices between $3.54 and $5.83 per share.

        In October 1996,granted to Mr. Diker was granted a ten-year non-plan option to purchase 75,000 shares of common stock at an exercise price of $4.91 per share. In October 1997, Mr. Diker was granted a ten-year non-plan option to purchase 75,000 shares of common stock at an exercise price of $4.66 per share. In October 1998, Mr. Diker was granted a ten-year non-plan option to purchase 75,000 shares of common stock at an exercise price of $5.16 per share. All of said options are exercisable in full.between 1996 and 1998.

        In October 1998, Dr. Rowe was granted a ten-year non-plan option to purchase 15,000 shares of common stock at an exercise price of $5.33 per share. In March 1999, Dr. Rowe was granted a ten-year non-plan option to purchase 15,000 shares of common stock at an exercise price of $4.25 per share. All of said options are exercisable in full.Compensation Committee Report

        In October 2000, Mr. Cohen was granted a five-year non-plan option to purchase 15,000 shares of common stock at an exercise price of $5.58 per share. This option is exercisable in full.

        In September 2001, Dr. Shapiro was granted a five-year non-plan option to purchase 15,000 shares of common stock at an exercise price of $12.32 per share. This option is exercisable in three equal annual installments beginning September 2001.

        In November 2002, Mr. Segel was granted a five-year non-plan option to purchase 50,000 shares of common stock at an exercise price of $10.59 per share. This option is exercisable in three equal annual installments beginning November 2003.

18

Report on Executive Compensation by the Compensation and Stock Option Committee

The Compensation and Stock Option Committee of the Company's Board of Directors is responsible for setting and administering the policies which govern annual executive compensation and for administering the grant of options under the Company'sour stock option plans. The Compensation Committee is currently comprised of three members, Mr. Hirschfield, Chairman, and Messrs. BarbanellMr. Cohen and Cohen,Dr. Foreman, each of whom are non-employee directors.is an independent director.

Executive compensation for the fiscal year ended July 31, 2003 consistedgenerally consists of base salary, plusa bonus when earned.or incentive compensation (when earned) and the award of stock options as described below. The policy of the Compensation Committee, in consultation with the Chairman and the Chief Executive Officer, where appropriate, is to provide compensation to the Chief Executive Officer and the Company'sour other executive officers reflecting the contribution of such executives to the Company'sour growth in sales and earnings, the implementation of strategic plans consistent with the Company'sour long-term objectives, and the enhancement of shareholder value.

        Messrs. Malkin, Sheldon and Segel are employed and compensated pursuant to written employment agreements as described above. Prior to August 1, 2002 Mr. Reilly was employed and compensated pursuant to a written employment agreement that expired on July 31, 2002. Mr. Reilly was not subject to an employment agreement during the fiscal year ended July 31, 2003. However, he recently entered into a new employment agreement.

Long-term incentive compensation consists exclusively of the award of stock options under the Company'sour Employee Plan and, in the case of officers who serve as directors, of the Company, non-discretionary annual option grants of 1,500 shares under the Company'sour 1998 Directors'Directors’ Plan. In addition, officers participate in the Company'sour 401(k) plan and Mr. Vella participates in the deferred profit sharing plan of the Company'sour Canadian subsidiary.

The Stock OptionCompensation Committee under the Employee Plan is responsible for the award of stock options. Three non-employee directors, Messrs. Hirschfield, Barbanell and Cohen, currently serve on the Stock Option Committee, which administers the granting of options under the Employee Plan.

With respect to executive compensation for the fiscal year ended July 31, 2005, the Compensation Committee met in December 2004 to evaluate the performance of the three executive officers of the Company, Messrs. Segel (Senior Vice President-Corporate Development), Sheldon (Senior Vice President and CFO) and Malkin (President and CEO of Minntech), each of whom had an employment agreement expiring on December 31, 2004. It was the Committee’s desire to have each of said executives enter into new three-year employment agreements with compensation levels determined in a manner consistent with its policy stated above. In reaching its decision on compensation, the Committee, in addition to considering the recommendations of the CEO and Chairman, considered several factors, including the report of an independent compensation consultant that provided compensation information of comparable public companies, our significant increase in sales, net income and stock price, the successful implementation of strategic plans consistent with our long-term growth objectives including the consummation of four important acquisitions during the prior fiscal year, and the compensation paid to the executives in prior years. The terms of each of the new employment agreements is described above in the footnotes to the Summary Compensation Table. Compensation paid to Mr. Reilly, President and CEO, during fiscal 2005 was based solely on the terms of his employment agreement that expired on July 31, 2005. On August 1,


2006 Mr. Reilly entered into a new employment agreement that covers fiscal 2006 and 2007, the terms of which are described in the footnotes to the Summary Compensation Table.

In addition, the Committee resolved to continue our long-standing policy of utilizing the award of stock options (which provide value to the executive over time as growth in the market price of our shares reflects the successful achievement of our business objectives) to identify the success of the executives with the growth in equity value to our stockholders. The Committee took into account its view of the appropriate equity position of our executive officers in light of our market capitalization in determining the size of all awards. Except for new executive officers hired by the Company during fiscal 2005, whose option awards were granted in connection with their employment agreements, the Committee also based the size of each award upon the officer's contribution to the achievement of the performance objectives described above. Each of these factors was equally considered. The number of options awarded during fiscal 2005 to the executive officers named in the Summary Compensation Table is set forth under “Option Grants in Last Fiscal Year.”

Compensation Committee Interlocks and Insider Participation

        No officerNone of the Companyour officers served on the Compensation Committee during itsour last fiscal year. Mr. Reilly, theour President and Chief Executive Officer, of the Company, however, participated in deliberations concerning executive compensation, except with respect to the compensation of the Chairman of the Board and himself. Mr. Diker, our Chairman of the Company,Board, also participated in such deliberations except with respect to his own compensation.



Compensation Committee:




Alan J. Hirschfield (Chairman)
Robert L. Barbanell

Joseph M. Cohen

Spencer Foreman, M.D.

19


INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


INDEPENDENT AUDITORS

The firm of Ernst & Young LLP has audited theour financial statements offor the Company for more than tenlast sixteen years. In addition to retaining Ernst & Young LLP to audit our consolidated financial statements for the fiscal year ended 2003, the Company and its affiliatesJuly 31, 2005, we retained Ernst & Young LLP to provide tax and other advisory services in the fiscal year ended 2003,July 31, 2005, and expect to continue to do so in the future.

Auditor Fees

The following table presents fees for professional audit services rendered by Ernst & Young LLP for the audit of the Company'sour annual financial statements and review of financial statements included in the registrant'sour quarterly reports on Form 10-Q ("(“Audit Fees"Fees”) for fiscal 20032005 and 2002,2004, and fees billed for other services rendered by Ernst & Young LLP.


 2003
 2002

 

2005

 

2004

 

Audit Fees(1) $320,250 $233,000

 

$

903,855

 

$

366,855

 

Audit Related Fees(2)(3) 21,450 143,400

 

29,000

 

57,499

 

Tax Fees(3)(4) 271,200 159,100

 

254,426

 

166,607

 

 
 
Total $612,900 $535,500

 

$

1,187,281

 

$

590,961

 

 
 

(1)

   Audit fees for fiscal 2005 and 2004 related to the audit of the annual consolidated financial statements and a review of the quarterly financial statements and, in fiscal 2005, the audit of management’s assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal controls over our financial reporting as required by Section 404 of the Sarbanes-Oxley Act.

(2)Audit related fees for fiscal 20032005 and 2004 consisted principally of fees related to our internal control project and various accounting matters and fees related to the audit of a benefit plan of the Company, and for fiscal 2002 consisted primary of fees related to due diligence and other accounting advisory services related to the acquisition of Minntech Corporation.

(2)
plan.

(3)The Audit Committee has determined that the provision of all non-audit services performed for the Companyus by Ernst & Young LLP is compatible with maintaining that firm'sfirm’s independence.

(3)

(4)Tax fees consisted primarily of services related to tax due diligence in connection with acquisitions, as well as federal, state and international tax compliance, the majority of which related to the preparation of fiscal 2002 and 2001 income tax returns.

returns, as well as of services related to tax due diligence in connection with acquisitions.

The Audit Committee has a written preapproval policy. However, as a matter of practice, prior to engaging Ernst & Young LLP for any services, we generally obtain the prior approval of the Audit Committee, even if not required under the terms of the policy. In 2005 and 2004, all of the audit fees, audit-related fees and tax fees were approved by the Audit Committee.

Audit Committee Report

The Audit Committee of the Board of Directors is providing this report to enable stockholders to understand how it monitors and oversees the Company'sour financial reporting process. The Audit Committee operates pursuant to an Audit Committee Charter that is reviewed annually by the Audit Committee and updated as appropriate. The Audit Committee Charter was revised as of October 16, 2003 and a copy of the revised charter is attached as Annex C to this Proxy Statement.

This report confirms that the Audit Committee has (1) reviewed and discussed the audited financial statements for the year ended July 31, 20032005 as well as the unaudited financial statements included in Quarterly Reports on Form 10-Q for each of the first three quarters of the fiscal year, with management and Cantel'sCantel’s independent auditors;registered public accounting firm; (2) discussed with the Company'sour independent auditorsregistered public accounting firm the matters required to be reviewed pursuant to the Statement on Auditing Standards No. 61 (Communications with Audit Committees); (3) reviewed the written disclosures letter from the Company'sour independent auditorsregistered public accounting firm as required by Independence Standards Board


Standard No. 1 (Independent Discussions with Audit Committees); and (4) discussed with the Company'sour independent auditorsregistered public accounting firm their independence from Cantel.independence.

20

        The Audit Committee of the Board of Directors has considered whether the provision of non-audit professional services rendered by Ernst & Young LLP, as discussed above and disclosed elsewhere in this proxy statement, is compatible with maintaining their independence. Based upon the above review and discussions, the Audit Committee recommended to the Board of Directors that the audited financial statements for the year ended July 31, 20032005 be included in the Company'sour Annual Report on Form 10-K for filing with the Securities and Exchange Commission.

No portion of this Audit Committee Report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, through any general statement incorporating by reference in its entirety the Proxy Statement in which this report appears, except to the extent that we specifically incorporate this report or a portion of it by reference. In addition, this report shall not be deemed to be filed under either the Securities Act or the Exchange Act.



Audit Committee:




Robert L. Barbanell (Chairman)
Morris W. Offit

Alan R. Batkin

Bruce Slovin

21

20



Stock Performance Graph

The graph below compares the cumulative total stockholder return on the Company'sour common stock for the last five fiscal years with the cumulative total return on the Nasdaq Stock Market/U.S. Index, the Russell 2000 Index and the Dow Jones U.S. Medical ProductsHealthcare Equipment and Services Index over the same period (assuming the investment of $100 in the Company'sour common stock, the Nasdaq Stock Market/U.S. Index, the Russell 2000 Index, and the Dow Jones U.S. Medical ProductsHealthcare Equipment and Services Index on July 31, 1998,2000, and, where applicable, the reinvestment of all dividends). We are using The Dow Jones Healthcare Equipment and Services Index to replace the Dow Jones US Medical Products Index, which was used in the proxy statement for our 2004 Annual Meeting of Stockholders, since the later index has been discontinued. Due to such discontinuance, we are unable to provide five-year comparative data for that index.


COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG CANTEL MEDICAL CORP., THE NASDAQ STOCK MARKET (U.S.) INDEX,
THE RUSSELL 2000 INDEX AND THE DOW JONES U.S. MEDICAL PRODUCTS INDEX
GRAPHIC

GRAPHIC

    * $100 invested on 7/31/98 in stock or index—
    including reinvestment of dividends.
    Fiscal year ending July 31.

22

Section 16(a) Beneficial Ownership Reporting Compliance

Under the securities laws of the United States, the Company'sour directors, executive officers, and any persons holding more than ten percent of the Company'sour common stock are required to report their initial ownership of the Company'sour common stock and any subsequent changes in their ownership to the Securities and Exchange Commission ("SEC").SEC. Specific due dates have been established by the SEC, and the Company iswe are required to disclose in this Reportproxy statement any failure to file by those dates. Based upon (i) the copiesa review of Section 16(a) reports that the Company received from such persons for their 2003 fiscal year transactionsour records and (ii) the written representations received from one or more of such persons that no annual Form 5 reports were required to be filed for them for the 2003 fiscal year, the Company believesother information, we believe that there has been compliance with all Section 16(a) filing requirements applicable to such officers, directors, and ten-percent beneficial owners for such fiscal year, except for the following: (i) a report on a Form 4 of an option exercise by Mr. Hirschfield due by October 2, 2003 was filed on October 4, 2003, (ii) reports on Form 4s of the quarterly stock option grants to Messrs. Barbanell, Cohen, Dornbush, Hirschfield, Rowe, Shapiro and Slovin under the 1998 Directors' Stock Option Plan4 as follows: (a) reports for the quarter ended October 31, 2002, due by November 3, 2002,grant of options to Steven C. Anaya, Charles M. Diker, Roy K. Malkin, Seth R. Segel, Craig A. Sheldon and William J. Vella on December 16, 2004, which reports were included in thefiled on or before January 12, 2005 and (b) reports of the quarterly stock option grants for the quarter ended Januarygrant of options to Robert L. Barbanell, Alan R. Batkin, Joseph M. Cohen, Charles M. Diker, Darwin C. Dornbush, Spencer Foreman, M.D., Alan J. Hirschfield, James P. Reilly and Bruce Slovin on July 31, 20032005, which reports were filed on February 3, 2003, and (iii) a report on a Form 5 of a gift of shares from Mr. Diker and his wife to a not-for-profit corporation of which they are officers and directors due by September 15, 2003 was filed on October 28, 2003.August 4, 2005.



STOCKHOLDER PROPOSALS FOR 20042006 PROXY STATEMENT

The deadline for submitting a stockholder proposal for inclusion in the Company's proxy statement and formmaterials for our 2006 Annual Meeting of proxyStockholders pursuant to Rule 14a-8 of the Exchange Act is July 12, 2006. Under our By-laws, certain procedures are provided that a stockholder must follow to nominate persons for the Company's 2004 annual meeting of stockholders is the closeelection as directors or to introduce an item of business on July 25, 2004. In orderat an Annual Meeting of Stockholders without inclusion in our proxy materials. These procedures provide that stockholders wishing to comply with applicable provisionssubmit proposals or director nominations at the 2006 Annual Meeting of the Company's By-Laws, proposals of stockholders intendedStockholders that are not to be presented at the Company's 2004 annual meeting of stockholders without inclusion ofincluded in such proposals in the Company's proxy statement and form of proxy relating to the meetingmaterials must be receiveddo so by the Company nonot later than the close of business on October 18, 2004the 60th day and nonot earlier than the close of business on the 90th day prior to the first anniversary of the 2005 Annual Meeting of Stockholders (no earlier than September 18, 2004.21, 2006 and no later than October 21, 2006, as currently scheduled); provided, however, that in the event that the date of the 2006 Annual Meeting of Stockholders is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be delivered not earlier than the close of business on the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to the such annual meeting or the 10th day following the day on which public announcement of the date of the meeting is first made by us. Stockholders wishing to submit any such proposal are also advised to review Rule 14a-8 under the Exchange Act and our By-laws.

FORM 10-K


FORM 10-K

UPON THE WRITTEN REQUEST OF A RECORD HOLDER OR BENEFICIAL OWNER OF COMMON STOCK ENTITLED TO VOTE AT THE MEETING, THE COMPANYWE WILL PROVIDE WITHOUT CHARGE A COPY OF ITSOUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JULY 31, 2003,2005, INCLUDING THE FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. REQUESTS SHOULD BE MAILED TO MS. JOANNA ZISA ALBRECHT, CANTEL MEDICAL CORP., 150 CLOVE ROAD, LITTLE FALLS, NJ 07424.

23

OUR ANNUAL REPORT ON FORM 10-K IS ALSO AVAILABLE THROUGH OUR WEBSITE AT
WWW.CANTELMEDICAL.COMSOLICITATION OF PROXIES
.

        The cost of solicitation of proxies in the accompanying form has been or will be borne by the Company. In addition to solicitation by mail, arrangements may be made with brokerage houses and other custodians, nominees and fiduciaries to send proxy material to beneficial owners, and the Company will, upon request, reimburse them for any attendant expenses.

        In order to ensure the presence of a quorum at the Meeting, all stockholders are requested to sign and return promptly the enclosed proxy in the postage paid envelope provided for that purpose. The signing of the proxy will not prevent your attending the meeting and voting in person if you wish to do so.


OTHER MATTERS

The Board knows of no other matters to be presented for stockholder action at the Annual Meeting. However, if other matters do properly come before the Annual Meeting or any adjournments or postponements thereof, the Board intends that the persons named in the proxies will vote upon such matters in accordance with their best judgment.



BY ORDER OF THE BOARD OF DIRECTORS




Darwin C. Dornbush
Secretary

Secretary

November 25, 200321, 2005

24

22



Annex A


Director Qualification Standards1997 EMPLOYEE STOCK OPTION PLAN
OF
CANTEL MEDICAL CORP.

        1.     The Plan. This 1997 Employee Stock Option Plan (the "Plan") is intended to encourage ownership of stock of Cantel Medical Corp. (the "Corporation") by specified employeesA majority of the Corporation and its subsidiaries and to provide additional incentive for them to promote the success of the business of the Corporation.

        2.     Stock Subject to the Plan. Subject to the provisions of Paragraph 14 hereof, the total number of shares of Common Stock, par value $.10 per share, of the Corporation (the "Stock") which may be issued pursuant to Incentive Stock Options, as defined by Section 422 of the Internal Revenue Code ("ISOs"), and non-Incentive Stock Options ("Non-ISOs") granted under the Plan (the "Options") shall be 2,000,000. Such shares of Stock may be in whole or in part, either authorized and unissued shares or treasury shares as the Board of Directors of the Corporation (the "Board") shall from time to time determine. If an Option shall expire or terminate for any reason without having been exercised in full, the unpurchased shares covered thereby shall (unless the Plan shall have been terminated) again be available for Options under the Plan.

        3.     Administration of the Plan. The Plan shall be administered by a committee (the "Committee") composed of two or more non-employee members of the Board which shall have plenary authority, in its discretion, to determine the employees of the Corporation and its subsidiaries to whom Options shall be granted ("Optionees"), the nature of the Option (i.e., whether an ISO or non-ISO), the number of shares to be subject to each Option (subject to the provisions of Paragraph 2), the option exercise price (the "Exercise Price") (subject to the provisions of Paragraph 7), the vesting schedule of each option and the other terms of each Option. The Board shall have plenary authority, subject to the express provisions of the Plan, to interpret the Plan, to prescribe, amend and rescind any rules and regulations relating to the Plan and to take such other action in connection with the Plan as it deems necessary or advisable. The interpretation and construction by the Board of any provisions of the Plan or of any Option granted thereunder shall be final and no member of the Board shall be liable for any action or determination made in good faith with respect to the Plan or any Option granted thereunder by the Committee.

        4.     Employees Eligible for Options. All employees of the Corporation or its subsidiaries shall be eligible for Options. In making the determination as to employees to whom Options shall be granted and as to the number of shares to be covered by such Options, the Committee shall take into account the duties of the respective employees, their present and potential contributions to the success of the Corporation and such other factors as it shall deem relevant in connection with accomplishing the purpose of the Plan.

        5.     Term of Plan. The Plan shall terminate on, and no Options shall be granted after October 15, 2007 provided that the Committee may at any time terminate the Plan prior thereto.

        6.     Maximum Option Grant. With respect to an Option granted to an individual that is intended to qualify as an ISO, the aggregate fair market value (determined as of the time the Option is granted) of the Stock with respect to which such Option and all other ISOs granted to the individual (whether under this Plan or under any other stock option plan of the Corporation or any of its subsidiaries) become exercisable for the first time in any calendar year may not exceed $100,000.

        7.     Exercise Price. Each Option shall state the Exercise Price, which shall be, in the case of ISOs, not less than 100% of the fair market value of the Stock on the date of the granting of the Option, nor less than 110% in the case of an ISO granted to an individual who, at the time the Option is granted, is a 10% Holder (as hereinafter defined). The fair market value of shares of Stock shall be determined by the Board and shall be (i) the closing price of the Stock on the date of the granting of the Option as reported by the principal exchange on which the Company's Stock is traded or any quotation

A-1


reporting organization, or (ii) if the Stock did not trade on such date, the closing price of the Stock on the first day immediately preceding such date on which the Common Stock traded.

        8.     Term of Options. The term of each Option granted under this Plan shall be for a maximum of ten years from the date of granting thereof, and a maximum of five years in the case of an ISO granted to a 10% Holder, but may be for a lesser period or be subject to earlier termination as hereinafter provided.

        9.     Exercise of Options. An Option may be exercised from time to time as to any part or all of the Stock to which the Optionee shall then be entitled, provided, however, that an Option may not be exercised (a) as to less than 100 shares at any time (or for the remaining shares then purchasable under the Option, if less than 100 shares), (b) prior to the expiration of at least six months from the date of grant except in casemembers of the death or disability ofAudit Committee, the Optionee or as otherwise approved by theCompensation Committee and (c) unless the Optionee shall have been in the continuous employ of the Corporation or its subsidiaries from the date of the granting of the Option to the date of its exercise, exceptNominating and Governance Committee must qualify as provided in Paragraphs 12 and 13. The Exercise Price shall be paid in full at the time of the exercise of an Option (i) by certified or bank check or (ii) by the transfer to the Corporation of shares of its Stock with a fair market value (as determined by the Committee) equal to the purchase price of the Stock issuable upon exercise of such Option; provided, however, that shares transferred under this subparagraph (ii) must have been continuously owned by the Optionee for at least one year immediately preceding such transfer or such shorter period (but in no event less than six months) approved by the Committee. The holder of an Option shall not have any rights as a stockholder with respect to the Stock issuable upon exercise of an Option until certificates for such Stock shall have been delivered to him after the exercise of the Option.

        10.   Non-transferability of Options. An Option shall not be transferable otherwise than by will or the laws of descent and distribution and is exercisable during the lifetime of the employee only by him or his guardian or legal representative.

        11.   Form of Option. Each Option granted pursuant to the Plan shall be evidenced by an agreement (the "Option Agreement") which shall clearly identify the status of the Options granted thereunder (i.e., an ISO or Non-ISO) and which shall be in such form as the Committee shall from time to time approve. The Option Agreement shall comply in all respects with the terms and conditions of the Plan and may contain such additional provisions, including, without limitation, restrictions upon the exercise of the Option, as the Committee shall deem advisable.

        12.   Termination of Employment. In the event that the employment of an Optionee shall be terminated (otherwise by reason of death), such Option shall be exercisable (to the extent that such Option was exercisable at the time of termination of his employment) at any time prior to the expiration of a period of time not exceeding three months after such termination, but not more than ten years (five years in the case of an ISO granted to a 10% Holder) after the date on which such Option shall have been granted. Nothing in the Plan or in the Option Agreement shall confer upon an Optionee any right to be continued as an employee of the Corporation or its subsidiaries or interfere in any way with the right of the Corporation or any subsidiary to terminate or otherwise modify the terms of an Optionee's employment, provided, however, that a change in an Optionee's duties or position shall not affect such Optionee's Option so long as such Optionee is still an employee of the Corporation or one of its subsidiaries.

        13.   Death of Optionee. In the event of the death of an Optionee, any unexercised portion of such Optionee's Option shall be exercisable (to the extent that such Option was exercisable at the time of his death) at any time prior to the expiration of a period not exceeding three months after his death but not more than ten years (five years in the case of an ISO granted to a 10% Holder) after the date on which such Option shall have been granted and only by such person or persons to whom such deceased Optionee's rights shall pass under such Optionee's will or by the laws of descent and distribution.

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        14.   Adjustments Upon Changes in Capitalization. In the event of changes in the outstanding Stock of the Corporation by reason of stock dividends, splitups, recapitalizations, mergers, consolidations, combinations or exchanges of shares, separations, reorganizations or liquidations, the number and class of shares or the amount of cash or other assets or securities available upon the exercise of any Option granted hereunder and the maximum number of shares as to which Options may be granted to an employee shall be correspondingly adjusted, to the end that the Optionee's proportionate interest in the Corporation, any successor thereto or in the cash, assets or other securities into which shares are converted or exchanged shall be maintained to the same extent, as near as may be practicable, as immediately before the occurrence of any such event. All references in this Plan to "Stock" from and after the occurrence of such event shall be deemed for all purposes of this Plan to refer to such other class of shares or securities issuable upon the exercise of Options granted pursuant hereto.

        15.   Stockholder and Stock Exchange Approval. This Plan is subject to and no Options shall be exercisable hereunder until after (i) the approval by the holders of a majority of the Stock of the Corporation voting at a duly held meeting of the stockholders of the Corporation within twelve months after the date of the adoption of the Plan by the Board, and (ii) the approval by the New York Stock Exchange, Inc. of a listing application covering the shares of Stock covered by this Plan.

        16.   Amendment of the Plan. The Board shall have complete power and authority to modify or amend the Plan (including the form of Option Agreement) from time to time in such respects as it shall deem advisable; provided, however, that the Board shall not, without the approval of the votes represented by a majority of the outstanding Stock of the Corporation present or represented at a meeting duly heldindependent directors in accordance with the applicable laws of the Corporation's jurisdiction of incorporation and entitled to vote at a meeting of stockholders or by the written consent of stockholders owning stock representing a majority of the votes of the corporation's outstanding stock, (i) increase the maximum number of shares which in the aggregate are subject to Options under the Plan (except as provided by Paragraph 14), (ii) extend the term of the Plan or the period during which Options may be granted or exercised, (iii) reduce the Exercise Price, in the case of ISOs below 100% (110% in the case of an ISO granted to a 10% Holder) of the fair market value of the Stock issuable upon exercise of Options at the time of the granting thereof, other than to change the manner of determining the fair market value thereof, (iv) modify the requirements as to eligibility for participation in the Plan, (v) with respect to options which are ISOs, amend the plan in any respect which would cause such options to no longer qualify for ISO treatment pursuant to the Internal Revenue Code or (vi) increase the maximum number of shares of Stock for which any employee may be granted Options under the Plan pursuant to Paragraph 6, (vii) materially increased the benefits accruing to participants under the Plan, (viii) make any other change to the terms of the Plan which would require approval by the stockholders pursuant to the rules and regulations of the Securities and Exchange Commission or the listing standards and rules of the securities exchange on which the Stock is listed.. No termination or amendment of the Plan shall, without the consent of the individual Optionee, adversely affect the rights of such Optionee under an Option theretofore granted to him or under such Optionee's Option Agreement.

        17.   Taxes. The Corporation may make such provisions as it may deem appropriate for the withholding of any taxes which it determines is required in connection with any Options granted under the Plan. The Corporation may further require notification from the Optionees upon any disposition of Stock acquired pursuant to the exercise of Options granted hereunder.

        18.   Code References and Definitions. Whenever reference is made in this Plan to a section of the Internal Revenue Code, the reference shall be to said section as it is now in force or as it may hereafter be amended by any amendment which is applicable to this Plan. The term "subsidiary" shall have the meaning given to the term "subsidiary corporation" by Section 424(f) of the Internal Revenue Code. The terms "Incentive Stock Option" and "ISO" shall have the meanings given to them by Section 422 of the Internal Revenue Code. The term "10% Holder" shall mean any person who, for purposes of Section 422 of the Internal Revenue Code owns more than 10% of the total combined voting power of all classes of stock of the employer corporation or of any subsidiary corporation.

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Annex B


1998 DIRECTORS' STOCK OPTION PLAN
OF
CANTEL MEDICAL CORP.

        1.     The Plan. The 1998 Directors' Stock Option Plan (the "Plan") is intended to strengthen the ability of Cantel Medical Corp. (the "Corporation") to attract and retain the services of persons having the breadth of professional and business experience who, through their efforts and expertise, can make a significant contribution to the success of the Corporation's business by serving as members of the Corporation's Board of Directors and to provide additional incentive for such directors to continue to work for the best interests of the Corporation and its stockholders through ownership of its Common Stock, par value $.10 per share (the "Stock"). Accordingly, the Company will grant to each director (the "Optionee") an option (the "Option") to purchase shares of Stock on the terms and conditions hereinafter set forth.

        2.     Stock Subject to the Plan. Subject to the provisions of Paragraph 11 hereof, the total number of shares of Stock which may be issued pursuant to Options granted under the Plan shall be 300,000. Such shares of Stock may be, in whole or in part, either authorized and unissued shares or treasury shares as the Board of Directors of the Corporation (the "Board") shall from time to time determine. If an Option shall expire or terminate for any reason without having been exercised in full, the unpurchased shares covered thereby shall (unless the Plan shall have been terminated) again be available for Options under the Plan.

        3.     Administration of the Plan. The Plan shall be administered by a committee (the "Committee") composed of two or more non-employee members of the Board. The Committee shall have plenary authority, subject to the express provisions of the Plan, to interpret the Plan, to prescribe, amend and rescind any rules and regulations relating to the Plan and to take such other action in connection with the Plan as it deems necessary or advisable; provided, however, that the grant of Options under the Plan, the exercise price of such Options and the timing and manner in which such Options become exercisable shall not be subject to discretion by the Board but shall be governed by the terms of the Plan. The interpretation and construction by the Board of any provisions of the Plan or of any Option granted thereunder shall be final, and no member of the Board shall be liable for any action or determination made in good faith with respect to the Plan or any Option granted thereunder.

        4.     Directors Eligible for Options; Grant of Options.

                (a)    Each director of the Corporation, whether or not an employee, shall be eligible for Options under this Plan.

                (b)    Subject to Section 12, an Option to purchase 15,000 shares of Stock shall automatically be granted to each person who is appointed or elected for the first time to be a director of the Corporation. Each Option granted under this subsection (b) shall be exercisable in three equal annual installments commencing on the date of the grant. The exercise price of each Option granted under this subsection (b) shall be the fair market value (as hereinafter defined) of Stock covered thereby on the date the Option is granted.

                (c)    Subject to Section 12, an Option to purchase 1,500 shares of Stock shall automatically be granted under the Plan each year on the last business day of the Corporation's fiscal year to each member of the Corporation's Board serving as such on said date. Each Option granted under this subsection (c) shall be exercisable as to 50% of the number of shares of Stock covered thereby on the first anniversary of the grant of such Option and shall become exercisable for the balance of shares of Stock covered thereby on the second anniversary of the grant of such Option. The exercise price of each Option granted under this subsection (c) shall be the fair market value (as hereinafter defined) of Stock covered thereby on the date the Option is granted.

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                (d)    Subject to Section 12, an Option to purchase 750 shares of Stock shall be automatically be granted on the last business day of each fiscal quarter to each member of the Corporation's Board serving as such on said date provided that the member attended any regularly scheduled meeting of the Board, if any, which was held during such quarter (whether in person or by telephonic means). Notwithstanding the foregoing to the contrary, neither the Chairman of the Board, nor any member of the Board who is an employee of the Corporation, shall be entitled to receive any quarterly Option grants in accordance with this subsection (d). Each Option granted under this subsection (d) shall be exercisable immediately and the exercise price of each such Option shall be the fair market value (as hereinafter defined) of the Stock covered thereby on the date the Option is granted (the "Determination Date").

                (e)    For purposes of this Plan, the fair market value shall be:

                (i)  if the Stock is listed on a securities exchange, the closing price of the Stock on the largest principal securities exchange on the Determination Date, or, if there shall have been no sales on any such exchange on such Determination Date, the mean of the highest bid and lowest asked prices on such securities exchange on such Determination Date; or

               (ii)  if the Stock is not listed on a securities exchange, the closing price of the Stock on the National Market System of the National Association of Securities Dealers, Inc., Automated Quotation System ("NASDAQ"), or, if there shall have been no sales on such Determination Date on the NASDAQ National Market System, such closing price on the first date prior to the Determination Date that there was a sale on the NASDAQ Market system; or

              (iii)  if the Common Stock is not listed on a securities exchange or the NASDAQ National Market System, the mean of the highest bid and lowest asked prices of the Stock on the Determination Date as quoted in the NASDAQ System; or

              (iv)  if the Common Stock is not quoted in the NASDAQ System, the mean of the highest bid and lowest asked prices of the Stock on the Determination Date in the over-the-counter market as reported by the National Quotation Bureau, Incorporated, or any similar successor organization.

        5.     Term of Plan. The Plan shall terminate on, and no Options shall be granted after, December 1, 2008, provided that the Board may at any time terminate the Plan prior thereto.

        6.     Term of Options. The term of each Option granted under this Plan before July 31, 2000 shall be for a period of ten years from the date of granting thereof andthe term of each Option granted under this Plan on or after July 31, 2000 shall be for a period of five years from the date of granting thereof.

        7.     Exercise of Options. An Option may be exercised from time to time as to any part or all of the Stock to which the Optionee shall then be entitled, provided, however, that an Option may not be exercised as to less than 100 shares at any one time (or for the remaining shares then purchasable under the Option, if less than 100 shares). The purchase price of the Stock issuable upon exercise of an Option shall be paid in full at the time of the exercise thereof (i) in cash or (ii) by the transfer to the Corporation of shares of its Stock with a fair market value (as determined by the Board) equal to the purchase price of the Stock issuable upon exercise of such Option. The holder of an Option shall not have any rights as a stockholder with respect to the Stock issuable upon exercise of an Option until certificates for such Stock shall have been delivered to him after the exercise of the Option.

        8.     Non-transferability of Options. An Option shall not be transferable otherwise than by will or the laws of descent and distribution and is exercisable during the lifetime of the Optionee only by him.

        9.     Form of Option. Each Option granted pursuant to the Plan shall be evidenced by an agreement (the "Option Agreement") which shall be in such form as the Board shall from time to time approve. The Option Agreement shall comply in all respects with the terms and conditions of the Plan.

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        10.   Termination of Board Membership. In the event that an Optionee shall cease to be a member of the Board (whether by resignation, death or disability or otherwise), the Options of the Optionee granted pursuant to this Plan shall be exercisable (to the extent that such Options were exercisable at the time of termination of Board membership) at any time prior to the expiration of a period of time not exceeding three months after such termination by the Optionee (or, in the event such termination resulted from the Optionee's death, by the legal representative of the Optionee) and the balance of such Option, if any, shall be cancelled.

        11.   Adjustments Upon Changes in Capitalization. In the event of changes in the outstanding Stock of the Corporation by reason of stock dividends, split-ups, recapitalizations, mergers, consolidations, combinations or exchanges of shares, separations, reorganizations of liquidations, the number and class of shares available under the Plan, the number and class of shares or the amount of cash or other assets or securities available upon the exercise of any Option granted hereunder and the number of shares as to which Options are to be granted to an Optionee shall be correspondingly adjusted, to the end that the Optionee's proportionate interest in the Corporation, any successor thereto or in the cash, assets or other securities into which shares are converted or exchanged shall be maintained to the same extent, as near as may be practicable, as immediately before the occurrence of any such event. All references in this Plan to "Stock" from and after the occurrence of such event shall be deemed for all purposes of the Plan to refer to such other class of shares or securities issuable upon the exercise of Options granted pursuant hereof.

        12.   Stockholder And Stock Exchange Approval. This Plan is subject to, and no Options shall be exercisable hereunder until after (i) the approval by the holders of a majority of the Stock of the Corporation voting at a duly held meeting of the stockholders of the Corporation within twelve months after the date of the adoption of the Plan by the Board, and (ii) the approval by the New York Stock Exchange, Inc. of a listing application covering the shares of Stock covered by this Plan.

        13.   Amendment of the Plan. The Board shall have complete power and authority to modify or amend the Plan (including the form of Option Agreement) from time to time in such respects as it shall deem advisable; provided, however, that the Board shall not, without the approval of the votes represented by a majority of the outstanding Stock of the Corporation present or represented at a meeting duly held in accordance with the applicable laws of the Corporation's jurisdiction of incorporation and entitled to vote at a meeting of the stockholders or by the written consent of stockholders owning stock representing a majority of the votes of the Corporation's outstanding Stock, (i) increase the maximum number of shares which in the aggregate are subject to Options under the Plan (except as provided by Paragraph 11), (ii) extend the term of the Plan or the period during which Options may be granted or exercised, (iii) reduce the Option exercise price below 100% of the fair market value of the Stock issuable upon exercise of Options at the time of the granting thereof, other than to change the manner of determining the fair market value thereof, (iv) materially increase the benefits accruing to participants under the Plan, (v) modify the requirements as to eligibility for participation in the Plan, or (vi) make any other change to the terms of the plan which would require approval by the stockholders pursuant to the rules and regulations of the Securities and Exchange Commission or the listing standards and rules of the securities exchange on which the Stock is listed. No termination or amendment of the Plan shall, without the consent of the individual Optionee, adversely affect the rights of such Optionee under an Option theretofore granted to him or under such Optionee's Option Agreement.

        14.   Taxes. The Corporation may make such provisions as it may deem appropriate for the withholding of any taxes which it determines is required in connection with any Options granted under the Plan. The Corporation may further require notification from the Optionee upon any disposition of Stock acquired pursuant to the exercise of Options granted hereunder.

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Annex C


CANTEL MEDICAL CORP.
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
(Revised as of October 16, 2003)

I.    PRIMARY FUNCTION

        The primary function of the Audit Committee is to represent the Board of Directors in fulfilling its oversight responsibilities by:

    1.
    Appointing, retaining (or terminating) and overseeing the work of the independent auditors;

    2.
    Approving the compensation of the independent auditors;

    3.
    Reviewing the company's system of internal controls regarding finance, accounting, business conduct and ethics and legal compliance that management and the Board have established in connection with such matters;

    4.
    Reviewing the Company's accounting and financial reporting processes;

    5.
    Reviewing the integrity of financial reports and other financial and related information released by the Company to the public, or in certain circumstances governmental bodies;

    6.
    Reviewing and appraising with management the performance of the Company's independent auditors;

    7.
    Providing an open avenue of communication between the independent auditors and the Board; and

    8.
    Receiving and investigating notices of financial improprieties.

        The Committee has the authority to conduct any investigation appropriate to fulfilling its responsibilities. It shall have direct access to the independent auditors as well as anyone in the Company as deemed necessary by the Committee. The Committee has the authority to retain, at the Company's expense, special legal, accounting, or other experts, consultants and advisors it deems necessary in the performance of its duties.

        The Committee should have a clear understanding with the independent auditors that they must maintain an open and transparent relationship with the Committee, that the ultimate accountability of the independent auditors is to the Committee and that the independent auditors must report directly to the Committee. The Committee shall make regular reports to the Board concerning its activities.

        The Company shall provide the Committee with appropriate funding, as determined by the Committee, (i) to compensate the independent auditors engaged for purposes of rendering an audit report or related work or performing other audit, review or attest services, (ii) to compensate any experts, consultants or advisors engaged by the Committee, and (iii) for ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.

        The Committee shall give prompt notice to the Company's Chief Financial Officer of all expenditures by the Committee.

II.    COMMITTEE COMPOSITION

        The Committee shall be comprised of three or more directors, each of whom shall meet the independence requirements of the Securities and Exchange Commission (SEC) and the New York Stock Exchange (NYSE). No member of the Committee, other than in his capacity as a member of the

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Board or a committee, shall (i) accept any consulting, advisory or other fee from the Company or any subsidiary of the Company or (ii) be an affiliated person of the Company or any subsidiary of the Company.

        All members of the Committee shall meet the expertise requirements of the SEC and the NYSE. All members shall have a basic understanding of finance and accounting and be able to read and understand fundamental financial statements, and at least one member of the Committee shall qualify as an "audit committee financial expert" under the Sarbanes Oxley Act of 2002.

        The members of the Committee shall be elected or reappointed by the Board annually for a one year term. A Chairman shall be appointed by the Board.

III.    MEETINGS

        The Committee will meet with management and the independent auditors at least two times annually and be available to meet more frequently as circumstances dictate. Scheduled meetings of the Committee are (a) to review and approve the scope and fees of the annual audit to be performed by the Company's independent auditors and (b) to review and discuss the results of the audit and the Company's 10-K report, prior to its filing. In addition, the Committee Chairman should meet with the independent auditors and senior management periodically to review the Company's financial statements, 10-Q reports and other relevant interim reports before release and/or filing. The Committee should meet at its discretion with management and the independent auditors in separate executive sessions to discuss any matters that the Committee and each of these groups believe should be discussed privately.

IV.    RESPONSIBILITIES AND DUTIES

        To fulfill its responsibilities and duties the Committee shall:

Documents/Reports Review

    1.
    Review with financial management and the independent auditors, prior to filing, the Company's annual financial statements, the 10-K report and other reports, and the year-end earnings release and other financial and related information released to the public, or in certain circumstances governmental bodies, including any certification, report, opinion or review rendered by the independent auditors.

    2.
    Review with financial management and the independent auditors each quarterly earnings release and 10-Q report prior to its filing. The Chairman of the Committee may represent the entire Committee for purposes of this review.

    3.
    Review with independent auditors and senior management the recommendations of the independent auditors included in their management letter, if any, and their informal observations regarding the adequacy of overall financial and accounting procedures of the Company.

    4.
    Review and discuss with management all Section 302 and 906 certifications and Section 404 internal control reports (including the attestation of the independent auditors) required by the Sarbanes Oxley Act of 2002.

Independent Auditors

    5.
    Appoint, retain (or terminate) and oversee the independent auditors. Although the Committee has the sole authority to appoint the independent auditors, the Committee shall recommend

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      that the Board ask the Company's shareholders, at their annual meeting, to approve the Committee's selection of the independent auditors. The Committee shall also approve the compensation of the independent auditors.

    6.
    Request that the independent auditors submit, on a periodic basis, at least annually, a formal written statement delineating all relationships between the auditors and the Company and its directors and officers.

    7.
    Meet with the independent auditors prior to the audit to review the planning and staffing of the audit.

    8.
    In addition to approving the engagement of the independent auditors to audit the Company's consolidated financial statements, approve all use of the Company's independent auditors for non-audit services, other than prohibited non-audit services as specified in Section 10A(g) of the Securities Exchange Act of 1934, as amended. Audit and non-audit services must be approved either (a) explicitly in advance or (b) pursuant to a pre-approval policy established by the Committee that is detailed as torules promulgated thereunder and the services that may be pre-approved, does not permit delegation of approval authority to the Company's management, and requires management to inform the Committee of each service approved and performed under the policy.

    9.
    Prior to releasing the year-end earnings, discuss the resultsapplicable rules of the audit withNYSE.

    To assist it in making its determination regarding independence, the independent auditors. In this regard,Board will consider, at a minimum, the Committee shall obtain, review and discuss with the independent auditors reports and analyses from the independent auditors concerning: (a) all critical accounting policies and practices used by the Company, (b) significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including all alternative treatments of financial information within generally accepted accounting principles ("GAAP") that have been discussed with management, the ramifications of the use of the alternative disclosures and treatments, and the treatment preferred by the independent auditors, (c) significant issues regarding accounting principles and estimates, (d) off-balance sheet items, (e) related party transactions, and (f) any other material written communications between the independent auditors and management. In addition, the Committee shall discuss certain matters required to be communicated by the independent auditors to the Committee in accordance with generally accepted auditing standards.

    10.
    Ensure that the lead audit partner assigned by the Company's independent auditors to the Company, as well as the reviewingfollowing categorical standards:

    ·       No Director who is an employee or concurring audit partner and the other audit engagement team partners, shall be rotated in accordance with the rules and regulations of the SEC.

    11.
    Annually consult with the independent auditors out of the presence of management about the integrity of internal controls, the fullness and accuracy of the Company's financial statements, and such other matters as the Committee deems necessary and appropriate.

Financial Reporting Process

    12.
    Review the integrity of the Company's financial reporting process, both internal and external.

    13.
    Following completion of the annual audit, review separately with management and the independent auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information, or any significant changes to the planned scope of the audit.

    14.
    Review any significant disagreement among management and the independent auditors in connection with the preparation of the financial statements.

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    Ethical and Legal Compliance

      15.
      Review with the Company's counsel, legal compliance matters, including the Company's Securities Trading Policy and Code of Business Conduct and Ethics.

      16.
      Review, with the Company's counsel, any legal matter that could have a significant impact on the Company's financial statements.

    Other Committee Responsibilities

      17.
      Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, and auditing matters and the confidential, anonymous submission by employeesformer employee of the Company will be considered “independent” until three years after the employment has ended.

      ·       No Director will be considered independent who receives more than $100,000 per year in direct compensation from the Company, other than director and committee fees and pension or other forms of concerns regardingdeferred compensation for prior service (provided such matters, consistent with the Company's Code of Business Conduct and Ethics.

      18.
      Annually prepare a reportcompensation is not contingent in any way on continued service) until three years after he ceases to shareholders as and to the extent required by SEC rules and regulations. The report should be includedreceive more than $100,000 per year in such compensation.

      ·       No Director who is, or in the Company's annual proxy statement to the extent requiredpast three years has been, affiliated with or employed by applicable SEC rules and regulations.

      19.
      Establish procedures for (i) the receipt, retention, and treatmenta present or former auditor of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters and (ii)an affiliate will be considered “independent” until three years after the confidential anonymous submission byend of either the Company's employees of concerns regarding questionable accounting or auditing matters.

      20.
      Perform any other activities consistent with this Charter, the Company's by-laws, and governing law, as the Committeeaffiliation or the Board deems necessaryauditing relationship.

      ·       No Director who is, or appropriate.

      21.
      Ensure that minutesin the past three years has been, part of each meeting are prepared and distributed to all membersan interlocking directorate in which an executive officer of the Board and provide periodic summary reports toCompany serves on the Board. The permanent filecompensation committee of another company that currently employs the Director will be considered “independent.”

      ·       Directors with immediate family members in any of the minutesabove categories will not be maintained byconsidered “independent” until the Secretaryexpiration of the Company.

      22.
      Review and update this Charter periodically, as conditions dictate. The Charter should be submitted to the Board for approval and published as required by SEC regulations.

            While the Committee has the responsibilities and powers set forthrelevant three-year period; provided, however, that employment of a family member of a Director in this Charter, it isa non-officer position will not the duty of the Committee to plan or conduct audits or to determinepreclude a determination that the Company's financial statements are complete and accurate and areDirector is independent.

    ·       No Director who during the prior three years was an executive officer or an employee, or whose immediate family member was an executive officer, of a company that made payments to, or received payments from the Company for property or services in accordance with generally accepted accounting principles. This isan amount which, in any single fiscal year, exceeded the responsibilitygreater of management and the independent auditors. Nor is it the duty$1,000,000 or 2% of the Committee to conduct investigations, to resolve disagreements, if any, between management and the independent auditors or to assure compliance with laws and regulations.such other company’s consolidated gross assets.

    C-423



    CANTEL MEDICAL CORP.

    PROXY
    THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

            KNOW ALL MEN BY THESE PRESENTS, that the undersigned stockholder of CANTEL MEDICAL CORP. (the "Company") hereby appoints Charles M. Diker and James P. Reilly, and each of them, as proxies, with full power of substitution, to vote, as designated on the reverse side, on behalf of the undersigned the number of votes to which the undersigned is entitled, at the Annual Meeting of Stockholders of CANTEL MEDICAL CORP., to be held on Wednesday, December 17, 2003 at 10:00 a.m. at The Harmonie Club, 4 East 60th Street, New York, New York, or at any adjournments thereof:

    (Continued and to be signed on the reverse side)

    ANNUAL MEETING OF STOCKHOLDERS OF
    CANTEL MEDICAL CORP.
    December 17, 2003

    Please sign, date and mail
    your proxy card in the
    envelope provided as soon
    as possible.

    \*/ Please detach along perforated line and mail in the envelope provided. \*/

    THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND "FOR" PROPOSALS 2 THROUGH 4.
    PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HEREý

            FORAGAINSTABSTAIN
    1.ELECTION OF DIRECTORS NOMINEES FOR TERMS EXPIRING AT 2006 ANNUAL MEETING OF STOCKHOLDERS: 2.TO APPROVE THE AMENDMENT TO THE COMPANY'S 1997 EMPLOYEE STOCK OPTION PLAN:ooo
       NOMINEES:      
     oFOR ALL NOMINEES( )DARWIN C. DORNBUSH      
       ( )SPENCER FOREMAN, M.D.      
     oWITHHOLD AUTHORITY FOR ALL NOMINEES   3.TO APPROVE THE AMENDMENT TO THE COMPANY'S 1998 DIRECTORS' STOCK OPTION PLAN:ooo
     oFOR ALL EXCEPT
    (See instructions below)    		        

     
     
     
     
     
     
    4.
    TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY FOR ITS FISCAL YEAR ENDING JULY 31, 2004:
    o
    o
    o

     
     
     
     
     
     
    5.
    IN THEIR DISCRETION WITH RESPECT TO ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
    INSTRUCTION:To withhold authority to vote for any individual nominee(s), mark "FOR ALL EXCEPT" and fill in the circle next to each nominee you wish to withhold, as shown here: •Unless a contrary direction is indicated, the shares represented by this proxy will be voted for all nominees for directors named in the proxy statement enclosed herewith and for Proposals 2, 3 and 4; if specific instructions are indicated, this proxy will be voted in accordance with such instructions.



    PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT AT ONCE, WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING. YOU MAY VOTE IN PERSON IF YOU DO ATTEND.
    To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.o
    Signature of StockholderDate:Signature of StockholderDate:
    Note:
    Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.


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    To Be Held On December 17, 2003
    Cantel Medical Corp. 150 Clove Road Little Falls, NJ 07424
    PROXY STATEMENT
    PROPOSAL 1 ELECTION OF DIRECTORS
    The Board Recommends a Vote "For" The Nominees Listed Herein.
    PROPOSAL 2 APPROVAL OF AMENDMENT TO THE 1997 EMPLOYEE STOCK OPTION PLAN
    The Board Recommends a Vote in Favor of Proposal 2
    PROPOSAL 3
    APPROVAL OF AMENDMENT TO THE 1998 DIRECTORS STOCK OPTION PLAN
    The Board Recommends a Vote in Favor of Proposal 3.
    PROPOSAL 4
    RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
    The Board Recommends a Vote in Favor of Proposal 4.
    TRANSACTION OF OTHER BUSINESS
    OWNERSHIP OF SECURITIES
    Executive Officers of the Company
    EXECUTIVE COMPENSATION AND RELATED INFORMATION
    Summary Compensation Table
    Option Grants in Last Fiscal Year
    Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-end Option Values
    Equity Compensation Plan Information
    INDEPENDENT AUDITORS
    COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* AMONG CANTEL MEDICAL CORP., THE NASDAQ STOCK MARKET (U.S.) INDEX, THE RUSSELL 2000 INDEX AND THE DOW JONES U.S. MEDICAL PRODUCTS INDEX
    STOCKHOLDER PROPOSALS FOR 2004 PROXY STATEMENT
    FORM 10-K
    SOLICITATION OF PROXIES
    OTHER MATTERS
    1997 EMPLOYEE STOCK OPTION PLAN OF CANTEL MEDICAL CORP.
    1998 DIRECTORS' STOCK OPTION PLAN OF CANTEL MEDICAL CORP.
    CANTEL MEDICAL CORP. CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS (Revised as of October 16, 2003)
    CANTEL MEDICAL CORP.