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 and is currently managing partner of Diker Management LLC, a registered investment 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 general outside 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 since January 1988. Since February 2000 he has been a private investor and consultant. Mr. Hirschfield is also a director of Interactive Data Corp. (formerly Data Broadcasting Corp.) (NYSE), Carmike Cinemas, Inc. (NASDAQ), a national theater chain, Peregrine Systems, Inc. (OTC), a provider of asset and service management 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. Mr. Slovin is a director of M&F Worldwide Corp. (NYSE), a manufacturer of licorice extract and flavorings and Sentigen Holding Corp. (NASDAQ), a biomedical research company.

The Board of Directors unanimously recommends athat you vote FOR"FOR" the election of these nominees as directors.each of the ten nominees.

STRUCTURE AND PRACTICESCORPORATE GOVERNANCE
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 our stockholders. We are in compliance with the corporate governance requirements imposed by the Sarbanes-Oxley Act, of 2002, the SEC and the NYSE. WeNYSE and will continue to review our policies and practices to meet ongoing developments in this area.

Our current corporate governance principles,Code of Business Conduct and Ethics

        All of our employees, including the Corporate Governance Guidelinesour Chief Executive Officer (CEO), Chief Financial Officer (CFO), all other senior financial officers and theall other executive officers, are required to comply with our Code of Business Conduct and Ethics. You can access our Code of Business Conduct and Ethics areby clicking on the "Corporate Governance" link in the "Investor Relations" section of our website at www.cantelmedical.com. The Code of Business Conduct and Ethics is also available without charge in print to any requesting stockholder. We post amendments to, and waivers of, our Code of Business Conduct and Ethics, as applicable, on our website.

Corporate Governance Guidelines

        Our Corporate Governance Guidelines reflect the principles by which we operate. From time to time, the Nominating Committee and the Board review and revise our Corporate Governance Guidelines in response to regulatory requirements and evolving best practices. You can access our Corporate Governance Guidelines by clicking on the "Corporate Governance" link in the "Investor Relations" section of our website at www.cantelmedical.com. The Corporate Governance Guidelines are also available without charge in print to any requesting stockholder.

Certain Relationships and Related Persons Transactions

        Our Corporate Governance Guidelines address, among other things, the consideration and approval of any related person transactions. Under these Governance Guidelines, any related person transaction that would require disclosure by us under Item 404(a) of Regulation S-K of the rules and regulations of the SEC, including those with respect to a director, a nominee for director or an executive officer, must be reviewed and approved or ratified by the Nominating Committee, excluding any director(s) interested in such transaction. Any such related person transactions will only be approved or ratified if that Committee determines that such transaction will not impair the involved person(s)' service to, and exercise of judgment on behalf of, the Company, or otherwise create a conflict of interest that would be detrimental to the Company.

        Mark N. Diker, our Chairman's son, has served as a director of Cantel since October 18, 2007. Because of such family relationship, he is not treated as an independent director. During fiscal 2012, Mr. Mark Diker's total compensation was approximately $35,000 and he was awarded 1,340 restricted shares under the “Investor Relations-Corporate Governance” link2006 Equity Incentive Plan in connection with his directorship at www.cantelmedical.com or (free of charge) by sending a written requestCantel.

        Other than compensation paid to Cantel Medical Corp., 150 Clove Road, 9^th Floor, Little Falls, NJ 07424, Attn: Assistant Secretary. Aspects of our corporate governance principles are discussed throughoutexecutive officers and directors and disclosed in this Proxy Statement.Statement or otherwise approved by our Compensation Committee or Board, we did not engage in any related person transactions in fiscal 2012.

BOARD MATTERS; COMMITTEES

Board Meetings and Attendance of Directors

The Board held four regular meetings and two special meetings during the fiscal year ended July 31, 2005.2012. During fiscal 2005,2012, each of the incumbent directors attended 75% or more of the combined total meetings of the Board and the respective committees on which he served. Directors are required to make every reasonable effort to

Nominating Committee.The Nominating Committee is composed of Messrs. SlovinMr. Fotiades (Chairman), BarbanellDr. Pronovost and Mr. Cohen. The Committee performs the following functions: (1) identifying individuals qualified to become Board members, consistent with criteria approved by the Board and recommending that the Board select the director nominees for the next annual meetingAnnual Meeting of stockholders;Stockholders; (2) developing and recommending to the Board the Corporate Governance Guidelines; and (3) overseeing evaluation of the Board and management.management and (4) reviewing and assessing the compensation paid to members of the Board and its committees. The Nominating Committee held one meeting during fiscal 2005.2012.

Board Leadership Structure

        The CEO and Chairman roles at Cantel are separated between Andrew A. Krakauer and Charles M. Diker, respectively, in recognition of their differing responsibilities. The CEO is responsible for leading the organization's day-to-day performance, executing the Company's strategies and ensuring the success of our acquisition program. The Chairman is responsible for advising the CEO, collaborating on acquisitions, and presiding over meetings of the Board. In addition, the Chairman is principally responsible for setting the strategic direction of the Company with assistance from the CEO. Although we do not have a formal policy regarding whether the offices of Chairman and CEO should be separate, our Board believes that the existing leadership structure, with the separation of the Chairman of the Board and CEO roles, enhances the accountability of the CEO to the Board and strengthens the Board's independence from management. In addition, the Board believes that having a separate Chairman creates an environment that is more conducive to the objective evaluation and oversight of management's performance, increasing management accountability, and improving the ability of the Board to monitor whether management's actions are in the best interests of the Company and our stockholders.

Board Role in Risk Oversight

        The Board is responsible for oversight of the Company's management of enterprise risks. Cantel's senior management is responsible for the Company's risk management process and the day-to-day supervision and mitigation of enterprise risks. Management of the Company advises the Board on areas of material Company risk, including strategic, operational, financial, legal and regulatory risks. We do not believe our Board's oversight of risk influences our leadership structure, though we believe our leadership structure helps mitigate risk by separating oversight of our day-to-day business from the oversight of our Board.

Selection of Nominees for Election to the Board

The Nominating Committee has established a process for identifying and evaluating nominees for director. Although the Nominating Committee will consider nominees recommended by stockholders, the Nominating 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, 9^th 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’sBoard'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. Although the Board considers diversity as a factor to be considered in identifying and evaluating nominees, it does not have any formal policy with respect to diversity. The Nominating Committee will also consider the general qualifications of potential nominees, including, but not limited to personal integrity; loyalty to Cantel and concern for itsCantel's 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;the Company; and freedom from conflicts of interest.interests.

EXECUTIVE OFFICERS OF CANTEL

        Set forth below is certain biographical information concerning our current executive officers who are not also directors:

        Mr. Sheldon, who has been employed by us in various executive capacities since November 1994, has served as our Senior Vice President and Chief Financial Officer since November 2002. In March 2008, Mr. Sheldon was also appointed Treasurer. Mr. Sheldon is a certified public accountant (CPA) and a chartered global management accountant (CGMA).

        Mr. Nodiff has served as our Senior Vice President and General Counsel since January 2005. In January 2009, Mr. Nodiff was also appointed Secretary.

        Mr. Anaya, who has been employed by us since March 2002, has served as Vice President since November 2003 and Controller since November 2002. Prior thereto, he served as our Assistant Controller. Mr. Anaya is a certified public accountant (CPA) and a chartered global management accountant (CGMA).

COMPENSATION DISCUSSION AND ANALYSIS

        The Compensation Committee of our Board discharges certain responsibilities of the Board with respect to compensation of the Company's executive officers, which, for the fiscal year ended July 31, 2012, included our Chairman of the Board and member of Office of the Chairman, Charles M. Diker; President/Chief Executive Officer (CEO) and member of Office of the Chairman, Andrew A. Krakauer; Senior Vice President, General Counsel and Secretary, Eric W. Nodiff; Senior Vice President, Chief Financial Officer (CFO) and Treasurer, Craig A. Sheldon; and Vice President and Controller, Steven C. Anaya (collectively, the Named Executive Officers or NEOs).

Objectives of Compensation Programs

        The primary objectives of the Company's compensation program are to:

•

Closely align the interests of the executive officers with those of the stockholders, and



•

Offer compensation opportunities that attract and retain talented executive officers, motivate such officers to perform at their highest level and reward their achievements.

        The abilities and performance of the Company's executives are critical to the Company's long-term success, and the objectives of the compensation program are designed to complement each other by balancing the Company's interest in achieving both its short-term and long-term goals. Base salary and incentive-based cash bonuses are paid to reward performance and the achievement of short-term objectives and equity awards are used to align the executives' interests with the long-term success of the Company.

What the Company's Compensation Program is Designed to Reward

        The Company's business plan emphasizes growth through the expansion of existing operations and the addition of new products through acquisitions and product development. This strategy is advanced by identifying and acquiring businesses; effectively integrating acquired operations, personnel, products

and technologies into the organization; retaining and motivating key personnel throughout the Company; attracting and retaining customers; and encouraging new product development. In addition, the Company relies on its executives to sustain and efficiently manage current businesses while adapting and growing its business segments in response to the ever-changing competitive landscape, and, in general, to maximize stockholder value. The compensation program is designed to reward the NEOs for successfully managing these tasks, increasing earnings of the Company, and creating stockholder value.

Role of Compensation Consultant and Survey Data

        Although the Compensation Committee has retained and worked with an independent consulting firm in the past, it elected not to do so for fiscal 2012. In addition, it did not utilize any specific survey data or benchmarking with respect to fiscal 2012 compensation. Instead, the Committee relied on its own analyses and processes described herein in setting fiscal 2012 compensation for the NEOs. In the future, the Compensation Committee may elect to retain an independent consulting firm to provide competitive pay data and compensation trends, analysis and recommendations with respect to the Company's CEO and other executive officers.

Elements of the Compensation Program; Why the Compensation Committee Chose Each Element and How it Relates to the Company's Objectives

        The two principal elements comprising executive compensation are cash and equity awards. The cash element is divided into base salary and annual cash incentives under the Company's Annual Incentive Compensation Plan, which constitutes the short term incentive compensation plan (STIP) and the equity element consists of stock options and restricted stock awards (subject to a risk of forfeiture) under the Company's Long Term Incentive Compensation Plan (LTIP). These elements complement each other and give the Committee flexibility to create compensation packages that provide short and long-term incentives in line with the Company's approach to compensation. Such approach is designed to provide the executive sufficient cash to be competitive with other employment opportunities, while at the same time providing the executive with an incentive to build stockholder value by aligning the executive's interests with those of our stockholders.

        Base salary is the primary fixed element of the Company's compensation program and is used to attract and retain, as well as motivate and reward, executive officers. In determining the base salary of NEOs, the Compensation Committee considers the experience, skills, knowledge and responsibilities required of the executive officer in his role, specifically, the functional role of the position, the level of the individual's responsibility, the ability to replace the individual, and if applicable, the base salary of the individual at his prior employment.

        Short-term incentive compensation is an opportunity for executives to receive cash bonuses based on the Company's (or its divisions') annual financial performance. The short-term incentive compensation is intended to reward performance for the most recently completed fiscal year when financial objectives are achieved and motivate and retain qualified individuals who have the opportunity to influence future results, advance business objectives, and enhance stockholder value. Likewise, this element of compensation is designed to provide a reduced award or no award when financial objectives are not achieved. Under the STIP, target amounts for the annual bonus opportunity are required to be established within 75 days after the commencement of the fiscal year and are based on achievement of one or more metrics described in the STIP. The exact annual metrics and targets to be used under the STIP are approved by the Compensation Committee each year. In addition, under the STIP, the Compensation Committee has the flexibility to award additional discretionary bonuses to recognize and reward performance in excess of measurable performance objectives. Mr. Diker does not participate in the STIP and does not receive cash bonuses.

        For fiscal 2012, the Committee established a target level, as a percentage of base salary, for each member of senior management for purposes of determining cash bonuses under the STIP. Achievement of the target levels was based on attainment of the Company's fiscal 2012 targeted diluted earnings per share (EPS) and, in the case of division CEOs, budgeted operating income for the applicable division. Factors included in the process of determining senior management target levels, as well as discretionary additional bonuses, were business performance, scope of responsibilities and accountability, competitive and other industry compensation data, special circumstances and expertise, individual performance, comparison with compensation of our other senior managers and recommendations of the Chairman of the Board and the CEO.

        The purpose of the LTIP is to contribute to the motivation of key employees in accomplishing the Company's long-term strategic and stockholder value goals. Through equity awards, the LTIP is designed to communicate and reinforce strategic, operational and financial objectives linked to creating stockholder value, provide a competitive incentive for achievement of long-term corporate stockholder value goals and establish an objective basis for determining annual long-term incentive awards for eligible participants.

        Equity awards (which may consist of restricted stock, stock options, stock appreciation rights or performance awards) are granted under the LTIP to NEOs in order to give them an ownership interest in the Company, thereby aligning their interests with those of the stockholders and providing a long-term incentive. Restricted stock awards consist of awards of the Company's common stock subject to specified vesting restrictions or conditions including, among other things, continued employment with the Company. Stock options and stock appreciation rights (rights to receive a payment equal to the increase in fair market value of the Company's common stock since the grant date thereof) are equity awards whose value depends on an increase in the Company's common stock price. The Compensation Committee determined at the end of fiscal 2010 to no longer grant stock options to management under the LTIP and rather, to grant only restricted stock to management. Grants of restricted stock have intrinsic value regardless of price appreciation, and may create a better identity of interests between management and other stockholders. In addition, the Committee believes that due to their intrinsic value, restricted shares may have a stronger retentive effect on management than stock options. Following fiscal 2012 restricted stock awards were granted to management under the LTIP. Mr. Diker does not participate in the LTIP but is awarded restricted stock awards and stock options as an employee of the Company from time to time based on recommendations of the Compensation Committee and approval of the Board.

        The Compensation Committee typically imposes time-based vesting conditions on stock options and restricted stock awards because it believes that time based vesting encourages recipients of awards to remain employed by the Company and continue to provide services to us, and also encourages recipients to build stockholder value over a long period of time. As with other issued shares of our common stock, recipients of restricted stock (but not stock options) awarded under the LTIP are entitled to receive dividends we pay on our common stock.

Risk in Our NEO Compensation Program

        Our Compensation Committee believes that the mix and design of the elements of executive compensation do not encourage management to assume excessive risks. We believe the base salary levels of our executives mitigate excessive risk-taking behavior by providing reasonable predictability in the level of income earned by each executive and alleviating pressure on executives to focus exclusively on stock price performance to the detriment of other important business metrics. We also provide a mixture of both short-term and long-term incentives. With a significant weighting on long-term incentives that are subject to time-based vesting, we believe NEOs' incentives are aligned with those of our stockholders and short-term risk taking is discouraged. In addition, the performance measures used for short-term incentives are intended to be challenging yet attainable, so that it is more likely than not

that the executives will earn a substantial portion of their target bonus annually, which mitigates the potential that our executives will take excessive risks. The metrics we use are typically calculable in accordance with generally accepted accounting principles (GAAP) and audited at the end of the year. Also, short-term incentives in the form of annual performance bonus payouts have been established, depending on an executive's position, at between 40-85% of base salary for on-target performance. Under the STIP, the Compensation Committee may determine that extraordinary performance warrants a higher payout but with a cap of 200% of targeted bonus, which the Compensation Committee believes mitigates the likelihood that our executives will take excessive risks. In addition, stock options and restricted stock awards granted to employees generally vest annually over three years, so executives always have a significant amount of unvested awards that could decrease significantly in value if our business is not managed for the long-term. The Compensation Committee further retains discretion under both the STIP and LTIP to reduce or not pay awards under such plans due to an NEO's misconduct or poor performance.

How the Compensation Committee Chose Amounts and Formulas for Each Element

        Base Salary.    Currently the Compensation Committee approves the base salaries of all NEOs; however, the base salary of Mr. Diker is also subject to approval by the Board. In February 2012, the base salary of the CEO was increased by 8.3%, from $485,000 to $525,000 in recognition of his contributions and the performance of the Company. The base salary of each of Messrs. Anaya, Nodiff and Sheldon was increased by 5.0% in recognition of their contributions and the performance of the Company. The Committee maintained the relative differences among them (other than the CEO) that had been established in prior fiscal years based on the NEOs' roles and responsibilities and the Committee's prior perception of executives of other similar companies of similar position, responsibility, experience, qualifications, and performance. The greater percentage increase for the CEO was due to his leadership of the Company, expanded responsibilities with the growth of the Company and the excellent fiscal 2011 operating results of the Company. The base salary of Mr. Diker, who does not provide services to the Company on a full time basis, was established by the Board in recognition of his contributions to the Company. Mr. Diker's base salary of $250,000 was not changed during fiscal 2012. The base salary of the NEOs, which will remain in effect through at least January 31, 2013, are as follows:

        Short-Term Incentive Plan.    For fiscal 2012, the Compensation Committee chose EPS as the performance metric under the STIP to maintain a focus on increasing stockholder value and driving superior financial performance. The Committee believes EPS is a key metric in measuring the Company's success and provides certainty and comparability since it is calculated in accordance with generally accepted accounting principles and audited each year. Specifically, for fiscal 2012 the performance target was EPS of $0.96.

        For fiscal 2012, the target incentive awards under the STIP, established as a percentage of base salary, were set by the Compensation Committee as follows:

        The target incentive award for Mr. Krakauer was increased from 70% to 85% and the target incentive awards for Messrs. Nodiff and Sheldon were each increased by 5% from fiscal 2011. The increases were made in consideration of the continued growth and positive performance of the Company and the increased responsibilities of the NEOs.

        In fiscal 2012, the Company exceeded the EPS performance target of $0.96 compared to our actual EPS of $1.15. Therefore, Messrs. Krakauer, Nodiff, Sheldon and Anaya each received his full target incentive award. In addition, because of the significant extent by which our actual EPS exceeded our performance target and our prior year's EPS, the surpassing of other financial targets such as cash flow and EBITDAS, as well as the successful integration of our most recent acquisitions, the Compensation Committee utilized its discretion under the STIP to award additional cash bonuses to our NEOs (exclusive of Mr. Diker, who does not participate in our STIP). Total STIP awards to NEOs for fiscal 2012 were as follows:

        These discretionary STIP awards increased the incentive-based awards by 90%. The percentage of the fiscal 2012 discretionary awards was increased relative to the fiscal 2011 awards due to the Compensation Committee's assessment of the Company's performance during fiscal 2012 relative to fiscal 2011.

        Equity Awards.    The Compensation Committee determines the number of shares of stock underlying the equity awards based upon each NEO's position and performance during the fiscal year. The Committee established fiscal 2012 equity award targets for all NEOs other than Mr. Diker based on a percentage of their base salary (described below). Mr. Diker is not a participant in the LTIP but has received equity awards from time to time upon the recommendation of the Compensation Committee and approval of the Board. All restricted stock awards to NEOs are subject to vesting in three equal annual installments beginning on the first anniversary of the grant date.

        The target incentive equity award percentages were determined by the Compensation Committee to reflect the objectives of the LTIP and to give effect to the positions, responsibilities and contributions to the Company of each NEO. The percentages also reflect the Compensation Committee's view, based on past analyses which were not updated in fiscal 2012, of market-based differences for similarly positioned executives at other companies.

        On October 15, 2012, the Compensation Committee awarded the NEOs restricted shares under the LTIP attributable to fiscal 2012 performance based on the $25.56 closing price of Cantel common stock on the NYSE on that date. In addition, the Compensation Committee awarded Mr. Diker a stock option to purchase 35,000 shares based on his contributions to the Company and for providing direction and assistance to management during fiscal 2012.

        Mr. Krakauer was awarded 39,125 shares of restricted stock, calculated by dividing $1,000,000 by $25.56. This represented a significant increase in value from the prior year's restricted stock award to Mr. Krakauer. Following fiscal 2011, Mr. Krakauer was awarded 35,812 shares, which was calculated by dividing $485,000 by $13.54 (the closing price of Cantel common stock on the NYSE on the date of grant). The increase was in recognition of the Company's significant growth since Mr. Krakauer became President, and subsequently, CEO of the Company, as well as the Committee's perception of CEO compensation of other similar companies of similar position, responsibility, experience, qualifications, and performance.

        The number of shares of restricted stock issued to Messrs. Nodiff and Sheldon was calculated by (1) multiplying such NEO's base salary by the incentive award percentage and (2) dividing the product by $25.56. The number of shares of restricted stock issued to Mr. Anaya was calculated by multiplying 50% by Mr. Sheldon's restricted stock award. There was no change in the formulas from the prior fiscal year.

        For the awards to Mr. Diker and the NEOs, the Compensation Committee established the following payment percentages and, as a result, made the grants indicated:

Post-Retirement and Other Benefits

        Each of Messrs. Krakauer, Nodiff, Sheldon and Anaya is party to a severance agreement with the Company that contains certain post-termination benefits.

        The Compensation Committee believes that post-termination benefits are an important aspect of an executive compensation program because they allow the Company to better recruit and retain executive officers by offering competitive compensation packages. Such benefits also allow the executive officers to focus on performance of their duties and eliminate distractions related to job security concerns. The severance agreements also provide benefits in the event of a change in control of the Company to further align the interests of the executive with those of the stockholders. These arrangements are primarily intended to maintain the executive's motivation to consummate the sale of the Company in circumstances where such event will maximize stockholder value, notwithstanding that such transaction may result in the executive's loss of continued employment with the Company. We believe a "double trigger" requiring actual termination following a change of control rather than simply awarding amounts in the event of a change of control best aligns the NEOs' interests by encouraging them to continue to perform their duties adequately rather than simply receiving an award for completing a transaction.

        We believe that these severance benefits are reasonable and appropriate for our NEOs in light of the anticipated time it takes high-level executives to secure new positions with responsibilities and

compensation that are commensurate with their experience. We do not include "gross-up" provisions in the severance agreements. A more detailed description of our severance agreements may be found below under the heading "Post Termination Benefits and Change in Control."

        Severance benefits also include the vesting of 100% of the executives' unvested stock options and unvested restricted stock awards and other similar rights in certain circumstances. We believe that the equity awards granted to our executive officers have been reasonable in amount and that, in the event of a change in control and certain other terminations, it is appropriate that our executive officers receive the full benefit under their equity compensation awards of the increase in Cantel's value attributable to the performance of the current management team.

        The severance agreements for our NEOs provide equal benefits for each NEO that is a party to a severance agreement, other than with respect to cash severance payable in the event of a termination in a non-change of control situation (i.e., a termination without cause). In such event, the CEO (i.e., Mr. Krakauer) is entitled to two times the sum of the CEO's base salary and target bonus at the time of termination; a 15-year executive (e.g., Mr. Sheldon) is entitled to 18 months' base salary; and the other executives (i.e., Messrs. Nodiff and Anaya) are entitled to 12 months' base salary. During fiscal 2012, the CEO was entitled to 18 months' base salary in this scenario. The Compensation Committee increased such amount on October 31, 2012 to (a) 24 months' base salary plus (b) two times Mr. Krakauer's annual target bonus based on the rate in effect as of the relevant termination date (currently 85% of his annual base salary). The change was made based on the Committee's perception of severance being paid to executives of other similar companies of similar position, responsibility, experience, qualifications, and performance. We believe that a higher severance formula for our CEO is justified and needed in order to attract the individual we believe is best suited for the office. Our CEO is the individual the public and our stockholders most closely identify as the face of the company. He has the greatest individual impact on our success, and he faces the greatest personal risks when the company takes risks. We also believe that any NEO (other than Mr. Diker) who has 15 years of employment with the Company should be entitled to additional compensation in the event of a termination of his employment in a non-change in control situation in recognition of his long service to the Company.

        In addition to the above benefits, we provide to Messrs. Krakauer, Nodiff, Sheldon and Anaya (1) term life insurance equal to one year's base salary, (2) a car allowance equal to $750 a month plus related expenses, (3) an executive physical once every three years (up to $3,500, subject to a gross-up to make this benefit tax neutral), (4) a $7,000 allowance for disability insurance or long term care insurance and (5) a 401(k) plan match. We believe these perquisites are appropriate as part of a competitive benefits package. Mr. Diker is provided a 401(k) plan match.

Say-on-Pay Vote Response

        In evaluating our compensation process for fiscal 2012, our Compensation Committee generally considered the results of the advisory vote of our stockholders on the compensation of the executive officers named in our last proxy statement related to our prior annual meeting of stockholders. Our Compensation Committee noted that more than 97% of votes cast approved of the compensation of those executive officers as described in our last proxy statement. Our Compensation Committee considered these voting results as supportive of the Compensation Committee's general executive compensation practices.

Tax Deductibility of Compensation

        Section 162(m) of the Internal Revenue Code (the Code) limits the deduction a public company is permitted for compensation paid to the chief executive officer and to the four most highly compensated executive officers other than the chief executive officer. Generally, amounts paid in excess of $1,000,000

to a covered executive cannot be deducted, unless the compensation is paid pursuant to a plan which is performance related, non-discretionary and has been approved by stockholders. In its deliberations the Compensation Committee considers ways to maximize deductibility of executive compensation, but nonetheless retains the discretion to compensate executive officers at levels the Committee considers commensurate with their responsibilities and achievements. We have not adopted a policy that all executive compensation be fully deductible.

COMPENSATION COMMITTEE REPORT

        The Compensation Committee has reviewed the "Compensation Discussion and Analysis" section of this Proxy Statement and discussed such section with certain members of management. Based on its review and discussions and its ongoing involvement with executive compensation matters, the Compensation Committee recommended to the Board that the "Compensation Discussion and Analysis" section of this Proxy Statement be included in this Proxy Statement and incorporated by reference into our Annual Report on Form 10-K for the year ended July 31, 2012.

Compensation Committee
Alan J. Hirschfield (Chairman)
Alan R. Batkin
Joseph M. Cohen

EXECUTIVE COMPENSATION

Summary Compensation Table

        The following table sets forth compensation for our CEO, CFO and three other most highly compensated executive officers (our Named Executive Officers or NEOs).

SUMMARY COMPENSATION TABLE

Grants of Plan-Based Awards Table

        The following table sets forth certain additional information regarding grants of plan-based awards to our Named Executive Officers for the fiscal year ended July 31, 2012:

Narrative Addendum to the Summary Compensation Table and Grants of Plan-Based Awards Table

Short-Term Incentive Plan

        Under the STIP, our NEOs (other than Mr. Diker) and certain other executives and key employees of the Company are eligible to receive cash bonus awards based on their achievement of performance targets for each fiscal year ending July 31st (each year being referred to as a Plan Year).

        The STIP is administered by the Compensation Committee, which establishes annual performance targets (the Performance Targets) for each Plan Year. Awards are based on the achievement of the Performance Targets, which are based on the attainment of specified levels of one or any combination of the following: revenues, cost reductions, operating income, income before taxes, net income, adjusted net income, earnings per share, adjusted earnings per share, operating margins, working capital measures, return on assets, return on equity, return on invested capital, cash flow measures, market share, stockholder return or economic value added of the Company or the subsidiary or division of the Company for or within which the participant is primarily employed. Such Performance Targets may also be based on the achievement of specified levels of Company performance (or performance of an applicable subsidiary) under one or more of the measures described above relative to the performance of other corporations. For fiscal 2012, the Compensation Committee utilized the Company's fiscal 2012 budgeted EPS of $0.96. In fiscal 2012, the Company exceeded this Performance Target.

        The target incentive awards for each eligible position (by category) are expressed as a percentage of base salary within the ranges designated below (with the actual target incentive award percentages determined by the Compensation Committee on an annual basis):

        For fiscal 2012, the target incentive awards were set by the Compensation Committee as follows:

        Notwithstanding the foregoing, Division CEOs have 25% of their bonus target based on the annual Performance Target established for executives of Cantel. The remaining 75% is based on the annual performance target specific to the operations of such CEO's Division(s), which are established by the CEO of the Company in consultation with the Compensation Committee.

        Awards are determined as follows:

        For fiscal 2012, none of the Division CEOs were NEOs.

        The target incentive award payable to each participant for 100% achievement of the Performance Targets (the Bonus Target) is calculated by multiplying the participant's base salary earned during the relevant Plan Year by a designated percentage established by the Compensation Committee for such participant for such Plan Year. If more or less than 100% of the Performance Target is achieved, the Compensation Committee has the discretion to increase the Bonus Target (not to exceed 200% of the Bonus Target) or decrease the Bonus Target (not to be less than 50% of the Bonus Target, provided that a minimum threshold performance level has been achieved); provided, however, that the Compensation Committee in its discretion may establish minimum Performance Targets that must be achieved in order for any incentive award to be paid. The Compensation Committee will determine the degree to which any applicable Performance Target has been achieved and any incentive award paid. At the sole discretion of the Compensation Committee, a participant may not receive an award, or the amount of an award may be decreased, due to substantiated poor individual performance or misconduct and may be declared ineligible under the STIP.

        For fiscal 2012, the Compensation Committee established the following payment criteria based on the achievement of the Performance Target:

        The actual awards for our NEOs under the STIP for fiscal 2012 are shown in the tables and discussed in Compensation Discussion and Analysis above.

Long-Term Incentive Plan

        The purpose of the LTIP is to contribute to the motivation of key employees in accomplishing the Company's long-term strategic and stockholder value goals. All equity awards under the LTIP are granted under the Company's 2006 Equity Incentive Plan (the Plan), which is described below, and are subject to the terms thereof.

        Under the LTIP, NEOs (other than Mr. Diker) and other executives and certain key employees of the Company, are eligible to receive annual equity awards for each Plan Year. Participants are identified by title and recommended by the CEO of the Company each year, subject to the approval of the Compensation Committee. The Compensation Committee administers the LTIP with respect to all participants. The annualized expected value of the participants' target awards under the LTIP are reviewed annually by the Compensation Committee. Except as described above with respect to the CEO, the Compensation Committee did not modify the annualized expected value of the participants' target awards under the LTIP for fiscal 2012 from the prior year.

        Performance based awards under the LTIP are contingent on acceptable individual performance as well as predetermined financial objectives of the Company or one or more of its subsidiaries or operating segments determined by the Compensation Committee. Performance based awards vest upon achievement of the designated performance criteria, which will be based on the attainment of specified levels of one or any combination of the following: revenues, cost reductions, operating income, income before taxes, net income, adjusted net income, earnings per share, adjusted earnings per share, operating margins, working capital measures, return on assets, return on equity, return on invested capital, cash flow measures, market share, stockholder return or economic value added of the Company or the subsidiary or division of the Company for or within which the participant is primarily employed. Such performance goals also may be based on the achievement of specified levels of Company performance (or performance of an applicable subsidiary) under one or more of the measures described above relative to the performance of other corporations. Notwithstanding the specific performance criteria established, in making a determination as to whether or not such criteria such as earnings growth was achieved, the Compensation Committee takes into consideration factors such as unanticipated taxes, acquisition costs, non-recurring and extraordinary items, and other equitable factors, as determined by the Compensation Committee in its discretion. If a participant's employment with the Company is terminated for any reason, the participant will forfeit any non-vested performance based awards. The Compensation Committee did not grant any performance based awards in fiscal 2012.

        Service-based awards under the LTIP vest ratably over three years following the date of grant, or such other period of time determined by the Compensation Committee, subject to the terms and conditions set forth in the Plan and the agreement reflecting the award. Under the LTIP, in the event a participant's employment is terminated prior to the end of the vesting period due to (A) death, all of the service-based awards granted to the participant under the LTIP will automatically vest as of the date of termination of employment, (B) Retirement (as defined in the LTIP), all of the service-based stock options granted to the participant under the LTIP will automatically vest and the participant will forfeit any non-vested restricted stock awards or portions thereof granted under the LTIP unless the Compensation Committee, in its discretion, accelerates the vesting of such non-vested restricted stock awards, or (C) disability, any service-based awards that would have vested within the 12 month period following the termination date but for the participant's termination of employment (e.g., stock options and restricted stock awards subject only to time vesting) will automatically vest as of the termination date.

        At the sole discretion of the Compensation Committee, a participant may not receive an award or may receive a reduced award due to substantiated poor individual performance or misconduct and may be declared ineligible under the Plan.

        The actual awards for our NEOs under the LTIP for fiscal 2012 are shown in the tables and discussed in Compensation Discussion and Analysis above.

2006 Equity Incentive Plan

        The Plan provides for the granting of stock options, restricted stock awards, stock appreciation rights (SARs) and performance awards to our employees, including our executive officers. Non-employee directors also participate in the Plan. The Plan does not permit the granting of discounted options or discounted SARs. The selection of employee participants in the Plan and the level of participation of each participant are determined by the Compensation Committee (the Board makes determinations relating to awards to directors). The number of shares that may be granted to a participant under the Plan during any calendar year may not exceed 75,000. Subject to the limitations set forth in the Plan, the Compensation Committee may delegate to our Chief Executive Officer or other executive officers such duties and powers as the Compensation Committee may deem advisable with respect to the designation of employees to be recipients of Plan awards and the nature and size of such awards, except that no delegation may be made in the case of awards to executive officers or directors or awards intended to qualify under Section 162(m) of the Code, or individual awards in excess of 1,500 restricted shares or 5,000 stock options (or aggregate awards during any fiscal quarter in excess of 5,000 restricted shares or 25,000 stock options) or such other parameters as may be set forth by the Compensation Committee in a subsequent resolution.

        The Plan permits the grant of non-qualified stock options, incentive stock options qualifying under Section 422 of the Code (ISOs) and SARs. SARs permit the recipient to receive a payment measured by the increase in the fair market value of a specified number of our shares from the date of grant to the date of exercise. Distributions to the recipient of a SAR may be made in common stock, in cash, other property or in any combination of the preceding as determined by the Compensation Committee. The Compensation Committee determines the terms of each stock option and SAR at the time of the grant. The exercise price of a stock option may not be less than the fair market value of our common stock on the date the option is granted; likewise, no SAR may be granted at less than the fair market value of our common stock on the date the SAR is granted. The Compensation Committee determines the exercise period of each stock option and SAR; however, the terms of stock options and SARs granted under the Plan may not exceed ten years.

        Unless otherwise provided by the Compensation Committee, in the event of the termination of a participant's service as an employee or non-employee director for any reason other than the participant's Retirement (as defined in the Plan), death or disability, stock options and SARs (to the extent exercisable) will remain exercisable for a period of 90 days from such date or until the expiration of the stated term of such stock options or SARs, whichever period is shorter (except that in the case of a termination of employment for cause, such stock options and SARs will immediately expire). Unless otherwise provided by the Compensation Committee, upon the termination of a participant's employment due to death or disability, stock options and SARs granted to such participant will remain exercisable (to the extent vested) for a period of one year from such date or until the expiration of the stated term of such stock options or SARs, whichever period is shorter. In addition, when an employee or non-employee director who has at least ten years of service with the Company and is at least 65 years of age (or at least 60 years of age with at least fifteen years of service) terminates his or her service as an employee or director (i.e., Retires), all stock options and SARs granted to such employee or director under the Plan will, upon such termination, become immediately exercisable in full and remain exercisable through the original term of the award.

        Generally, no stock option granted under the Plan may be exercised during the first year of its term or such longer period as may be specified in the option grant. However, the Plan gives the Compensation Committee the authority, in its discretion, to accelerate the vesting of stock options. The Plan also provides that unvested stock options and SARs will immediately vest if the recipient's

employment or service with the Company is terminated as a result of the recipient's death or Retirement, or is terminated without cause during the 12-month period following a change in control. The Plan similarly provides for the acceleration of vesting of the next tranche of stock options and SARs in the event of a termination of employment or service as a result of disability. The Plan also provides for the acceleration of vesting of a stock option or SAR if such accelerated vesting is provided under any benefit plan of the Company to which the recipient is subject. In addition, under the Plan, the Compensation Committee may in its discretion "cash out" any award, whether vested or unvested, upon a change in control by paying the recipient the amount by which the Change in Control Price (as defined in the Plan) exceeds the exercise or grant price per share under the stock option or SAR award multiplied by the number of shares granted under the stock option or SAR award.

        Under the Plan, the Compensation Committee may also grant restricted stock awards and performance awards, subject to specified restrictions or vesting conditions, including but not limited to continued employment or service of the recipient with us (in the case of restricted stock awards) or the achievement of one or more specific goals relating to our performance or the performance of a business unit or the recipient over a specified period of time (in the case of performance awards). Performance-based measures could be based on various factors such as our revenues, cost reductions, operating income, income before taxes, net income, adjusted net income, earnings per share, adjusted earnings per share, operating margins, working capital measures, return on assets, return on equity, return on invested capital, cash flow measures, market share, and/or economic value added or such factors as they apply to one of its business units within which the recipient is primarily employed. The performance goals of the performance awards will be set by the Compensation Committee within the time period prescribed by Section 162(m) of the Code.

        Except to the extent that the Compensation Committee specifies a longer vesting schedule in the award agreement, restricted stock awards given to non-employee Directors (and to employee Directors in their capacities as directors) will vest on the first anniversary of the grant date. Except as otherwise provided in the award agreement, restricted stock awards given to employees will vest ratably on the first, second and third anniversaries of the grant date. The Plan provides that if the recipient's service with the Company as a Director or employee terminates as a result of the recipient's death, any restricted stock awarded under the Plan will automatically vest, and if such service terminates as a result of disability, the next tranche of shares will automatically vest. The Plan also provides for the acceleration of vesting of a restricted stock award if such accelerated vesting is provided under any benefit plan of the Company to which the recipient is subject. In addition, the Plan gives the Compensation Committee the authority, in its discretion, to accelerate the vesting of any restricted stock award and, in connection with a change in control, to "cash out" any restricted stock award, whether vested or unvested.

Risk Considerations in Our Compensation Program

        The Compensation Committee has considered the risks that may exist in the Company's compensation plans and the factors that mitigate against the plans creating material risks to the Company and believes that risks arising from our compensation policies and practices for our employees are not likely to have a material adverse effect on the Company.

Outstanding Equity Awards at Fiscal Year-End Table

        The following table sets forth information regarding unexercised options and unvested restricted stock held by each of our Named Executive Officers as of July 31, 2012.

Equity Compensation Plan Information

        The following sets forth certain information as of July 31, 2012 with respect to our compensation plans under which Cantel securities may be issued:

Option Exercises and Stock Vested Table

        The following table provides information on stock option exercises and vesting of restricted stock during fiscal 2012:

Post-Termination Benefits and Change in Control

        The severance agreements with Messrs. Krakauer, Nodiff, Sheldon and Anaya expire on July 31, 2014 but automatically renew on July 31 of each year for another year unless either the Company or the NEO has provided at least 6 months' notice prior to such date that the term will not be extended. However, if a Change in Control (as defined in the severance agreements to generally include a person or group acquiring more than 50% of our stock, a majority of our Board being replaced during any 12-month period if not endorsed by our current Board, a merger or consolidation unless the Company's stockholders hold at least 80% of the voting stock of the surviving entity, a sale of all or substantially all of the Company's assets, or the approval of a plan of complete liquidation by the Company's stockholders) occurs, the term will not end before the second anniversary of the Change in Control.

        Under the severance agreements, upon termination of employment for any reason, the NEO will be entitled to his (a) earned but unpaid base salary through the termination date, (b) accrued and unused paid time off through the termination date, and (c) reimbursement of expenses. Subject to certain conditions (such as signing a release), if an NEO is terminated (1) by the Company for any reason other than for Cause, Unacceptable Performance, Disability or death or (2) by the NEO for Adequate Reason (each such capitalized term as defined in the severance agreements), then the NEO will be entitled to certain benefits, unless termination occurs during a Change in Control Coverage Period (as defined in the severance agreements). Specifically, the NEO would be entitled to (1) in the case of the CEO only, two times base salary plus target bonus, paid in a lump sum (prior to October 31, 2012 such benefit was limited to 18 months' salary), (2) for NEOs other than the CEO, one year's base salary (18 months in the case of any NEO who has completed at least 15 years of employment with the Company), paid in a lump sum, (3) if the termination occurs subsequent to a fiscal year end in which the NEO did not yet receive his earned bonus, then the NEO will be entitled to the bonus he would have been entitled to receive for such fiscal year under his applicable bonus plan if his employment had continued through the bonus payment date, (4) for the partial fiscal year in which the termination occurs, the NEO will be entitled to a pro-rated bonus (based on number of full or partial months the NEO worked in the partial fiscal year) to the extent he would have been entitled to receive the bonus for such fiscal year under his applicable bonus plan if his employment had continued through the next bonus payment date, (5) all unvested stock options and unvested stock held by the NEO will automatically fully vest, (6) 12 months (18 months in the case of the CEO or any NEO who has completed at least 15 years of employment with the Company) of COBRA benefit premiums and (7) 12 months of outplacement services, up to $20,000.

        Subject to certain conditions (such as signing a release), under their severance agreements, if the employment of Messr. Krakauer, Nodiff, Sheldon or Anaya is terminated during a Change in Control Coverage Period (generally, the period commencing 6 months prior to a Change in Control and ending 2 years following a Change in Control), the NEO will be entitled to certain compensation if (A) the Company terminates the NEO's employment (other than a termination for Cause or death), or (B) the NEO voluntarily terminates his employment for Adequate Reason or Good Reason (as defined in the severance agreements to generally include certain reductions in the authority, duties or responsibilities, certain reductions in compensation, certain reductions in the authority, duties or responsibilities of a supervisor of the NEO, certain reductions in the budget overseen by the NEO and certain changes in location). Specifically, the NEO would be entitled to (1) two times the sum of (i) the NEO's base salary and (ii) the greater of (A) a percentage of the NEO's base salary (which may range from 40% to 85%) or (B) the average of the NEO's prior two years' bonuses, (2) for the partial fiscal year in which the termination occurs, the NEO will be entitled to a pro rated bonus equal to the product of the (i) greater of (A) a percentage of the NEO's base salary (which may range from 40% to 85%) or (B) the average of the NEO's prior two years' bonuses, and (ii) a fraction, (x) the numerator of which is the number of full or partial months the NEO worked in the partial fiscal year, and (y) the denominator of which is 12;provided, however, that if the termination occurs subsequent to the end of

the preceding fiscal year as to which the NEO did not yet receive the bonus he would have received if his employment had continued through the bonus payment date, the numerator will be the number of full or partial months the NEO worked since the beginning of the preceding fiscal year to the termination date, (3) 24 months of COBRA benefits, (4) term life insurance policy for 24 months, and (5) 12 months of outplacement services, up to $20,000.

        In the case of a termination of employment of Messr. Krakauer, Nodiff, Sheldon or Anaya due to Disability (at any time during the term of the severance agreement other than during a Change in Control Coverage Period) or death, the Company will continue to pay the NEO's base salary for a 3-month period. In addition, for the partial fiscal year in which the termination occurs, the NEO will be entitled to a pro rated bonus (based on the number of full or partial months the NEO worked in the partial fiscal year) to the extent such bonus would have been earned under his applicable bonus plan if his employment had continued through the next bonus payment date.

        If Messr. Krakauer, Nodiff, Sheldon or Anaya intentionally and materially breaches any provision of the separate non-compete agreement he entered into in conjunction with the severance agreements, and fails to cure such breach (if curable) within 30 days, the severance agreements require such NEO to promptly repay to us any and all severance amounts previously paid to him under the severance agreement.

        Under the severance agreements, in the event (A) the Company terminates the employment of Messr. Krakauer, Nodiff, Sheldon or Anaya for any reason other than for Cause, Unacceptable Performance, Disability, or death, or (B) during a Change in Control Coverage Period, the Company terminates the NEO's employment for any reason other than for Cause or death, or (C) the NEO terminates his employment for Adequate Reason or Good Reason or (D) the NEO's employment terminates due to death, all unvested stock options and restricted stock awards then held by the NEO will automatically vest upon the termination of such NEO's employment. In the event of a termination of the NEO's Employment due to Retirement (as defined in the severance agreements), all unvested stock options then held by the NEO will automatically vest upon the termination of such NEO's employment. In the event of a termination of the NEO's Employment due to Disability, any stock option or restricted stock award that would have vested within the 12 month period following the termination date but for the NEO's termination of employment will automatically vest as of the termination date. In addition, the Company may, in its discretion, accelerate the vesting of any stock option or restricted stock award held by an NEO in the event the NEO's employment terminates for any reason.

        Mr. Diker is not entitled to any post-termination benefits other than benefits applicable to all employees of the Company. Such benefits include the immediate vesting of stock options and stock appreciation rights upon retirement if the employee or non-employee director has at least ten years of service with the Company and is at least 65 years of age (or at least 60 years of age with fifteen years of service).

Post-Termination Benefits and Change in Control Table

        The table below sets forth our reasonable estimate of the potential payments to each of our NEOs, in each case, assuming a termination date of July 31, 2012 if such NEO (1) was terminated due to Disability, (2) died, (3) Retired, (4) were terminated in connection with a change in control of the Company by us (other than for Cause or death) or by the NEO for Adequate Reason or Good Reason (Change in Control Termination), or (5) was terminated by us for any reason other than for Cause,

Unacceptable Performance, Disability, or death or by the NEO for Adequate Reason (Non-Change in Control Termination).

Director Compensation

Since February 1, 2005,        The table below summarizes the compensation paid by us to our directors for the fiscal year ended July 31, 2012, other than Messrs. Krakauer and Diker, whose compensation is included in the Summary Compensation Table above.

        During fiscal 2012, the annual fee of $20,000 per year and $1,000 per Board meeting attended ($2,000 for meetings longer than a half-day),payable to our non-employee directors was increased to $35,000 plus reimbursement for expenses.expenses, however, the meeting fee for attendance at Board meetings was eliminated. In addition, the Presiding Director is paid aan annual fee of $5,000, and the ChairmenChair of each of the Audit Committee, the Compensation Committee and the Nominating Committee are paid annual fees of $15,000, $6,000$10,000 and $3,000, respectively. Each member of the Audit Committee iswas paid $1,000 for each committee meeting attended and each member of the other committees iswas paid $750 for each committee meeting attended. Our 1998 Directors’ Stock OptionDuring fiscal 2013 members of the Compensation Committee

will be paid $1,000 for each committee meeting attended. In addition, Mr. Fotiades is paid an annual retainer to serve as Vice Chairman of the Board, in which role he serves as liaison between the Board and management. His services are provided solely as a member of the Board and for the benefit of the Board. The annual retainer was $50,000 through January 31, 2012 and increased to $100,000 on February 1, 2012. In addition, in October 2012, Mr. Fotiades was granted 4,000 restricted shares in consideration of the significant services provided by him as Vice Chairman.

        In addition, commencing July 31, 2012, non-employee directors receive under our Plan provides for an automatic grantannual award of options to purchase 15,000restricted shares of common stock to persons who first become a director of Cantel. The options are exercisable in three equal annual installments commencingCommon Stock on the last day of the fiscal year (commencing July 31, 2012) having a value on such grant date of $35,000, based on the grant. Such Plan further provides for the automatic grant to eachclosing price of our directors of an option to purchase 1,500 shares of common stock on the lastNYSE on the first business day immediately preceding the grant date. Based on the closing price of our fiscal year. In addition, an option to purchase 750 shares of common stock ison July 30, 2012, each director was granted automatically1,340 restricted shares on July 31, 2012. The shares are subject to forfeiture, vesting on the last business dayfirst anniversary of the grant date. Also, upon his or her joining the Board, each fiscal quarter to eachnew non-employee director provided that the director attended any regularly scheduled meetingmember of the Board if any, held duringis granted a restricted stock award of 5,000 shares which will vest ratably over three years commencing on the first anniversary of the grant date.

        Mr. Diker, as our employee, was paid an annual fee of $250,000 for his services as Chairman of the Board.

AUDIT COMMITTEE REPORT

        The Audit Committee is providing this report to enable stockholders to understand how it monitors and oversees our 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.

        This report confirms that the Audit Committee has (1) reviewed and discussed the audited financial statements for the year ended July 31, 2012 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's independent registered public accounting firm; (2) discussed with our independent registered public accounting firm the matters required to be reviewed pursuant to the Statement on Auditing Standards No. 61 (Communications with Audit Committees), as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T; (3) received the written disclosures and the letter from our independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm communications with the Audit Committee concerning independence; and (4) discussed with our independent registered public accounting firm their independence. The Audit Committee has considered the compatibility of the independent registered public accounting firm's provision of non-audit services with maintaining the firm's independence and found the provision of such quarter.services to be compatible with the firm's independence.

        Based upon the above review and discussions, the Audit Committee recommended to the Board that the Company's audited financial statements for the year ended July 31, 2012 be included in our Annual Report on Form 10-K for filing with the Securities and Exchange Commission.

PROPOSAL 2

APPROVAL OF AMENDMENT OF TO
CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK

The Board of Directors has adopted a resolution declaring it advisable and in the best interests of Cantel and the stockholders to amend our Certificate of Incorporation, as amended (the “Certificate”)Certificate) to increase the authorized number of shares of our common stock, par value $.10 per share, from 20,000,00030,000,000 to 30,000,00075,000,000 shares.

The Certificate presently authorizes 20,000,00030,000,000 shares of common stock, of which XX,XXX,XXX27,171,293 shares were issued and outstanding as of November 15, 2005,14, 2012, 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, XXX,XXX14, 2012, 2,823,939 shares of common stock were held by us as treasury shares. As such, a total of 29,995,232 shares were issued as of November 14, 2012. Additionally, as of that date an aggregate of XXX,XXX895,638 shares of common stock were reserved for issuance upon the exercise of outstanding options granted or available for grantupon grants of stock options or other awards under our various2006 Equity Incentive Plan. Therefore, upon the exercise of outstanding options or upon grant of stock option plansawards 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 issuance of X,XXX,XXX4,768 shares of common stock.stock or the reissuance of our treasury shares.

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 shareholderstockholder approval if favorable opportunities arise to raise additional equity capital or to acquire companies or products by the issuance of shares 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 judgment of the Board 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,2006 Equity Incentive Plan, 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