UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Introductory Note.
On June 2, 2021 (the “Closing Date”), STERIS plc, a company incorporated under the laws of Ireland (“STERIS”), completed its previously announced acquisition of Cantel Medical Corp. (now known as Cantel Medical LLC) (the “Company” or “Cantel”) pursuant to the terms of the Agreement and Plan of Merger (the “Merger Agreement”), dated as of January 12, 2021, as amended March 1, 2021, by and among STERIS, Solar New US Holding Co, LLC (now known as Solar New US Holding Corporation), a wholly owned subsidiary of STERIS (“US Holdco”), Crystal Merger Sub 1, LLC, a direct and wholly owned subsidiary of US Holdco (“Crystal Merger Sub”), and Cantel. Pursuant to the terms of the Merger Agreement, prior to the closing of the transactions contemplated by the Merger Agreement (the “Closing”), the Company incorporated Canyon HoldCo, Inc., a Delaware corporation and direct and wholly owned subsidiary of Cantel (“Canyon Newco”), and Grand Canyon Merger Sub, Inc., a Delaware corporation and direct and wholly owned subsidiary of Canyon Newco (“Canyon Merger Sub”) and on March 1, 2021, Canyon Newco, Canyon Merger Sub and Cantel entered into a joinder to the Merger Agreement through which Canyon Newco and Canyon Merger Sub became parties to the Merger Agreement. The Merger Agreement provides for, among other things, (a) the merger of Canyon Merger Sub with and into the Company, with the Company surviving the merger as a direct wholly owned subsidiary of Canyon Newco (the “Pre-Closing Merger”), (b) immediately following the Pre-Closing Merger, the conversion of the Company from a Delaware corporation to a Delaware limited liability company (the “Pre-Closing Conversion”), (c) immediately following the Pre-Closing Conversion, the merger of Crystal Merger Sub with and into Canyon Newco, with Canyon Newco surviving the merger as a direct and wholly owned subsidiary of US Holdco (the “First Merger”) and (d) immediately after the First Merger, the merger of Canyon Newco with and into US Holdco, with US Holdco surviving the merger and remaining a wholly owned subsidiary of STERIS (the “Second Merger” and, together with the Pre-Closing Merger and the First Merger, the “Mergers”).
On the Closing Date, upon the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the applicable provisions of the General Corporation Law of the State of Delaware and the Delaware Limited Liability Company Act, the Mergers and the Pre-Closing Conversion were completed. At the effective time of the Pre-Closing Conversion (the “Pre-Closing Conversion Effective Time”), the Company was converted from a Delaware corporation to a Delaware limited liability company, and the name of the Company was changed to Cantel Medical LLC. At the effective time of the Pre-Closing Merger (the “Pre-Closing Merger Effective Time”), the separate corporate existence of Canyon Merger Sub ceased, and the Company survived the Pre-Closing Merger as a wholly owned subsidiary of Canyon Newco. At the effective time of the First Merger (the “First Merger Effective Time”), the separate existence of Crystal Merger Sub ceased, and Canyon Newco survived the First Merger as a wholly owned subsidiary of STERIS. At the effective time of the Second Merger (the “Second Merger Effective Time”), the separate corporate existence of Canyon Newco ceased, and US Holdco survived the Second Merger as a wholly owned subsidiary of STERIS.
| Item 1.01 | Entry into a Material Definitive Agreement. |
On the Closing Date, the Company, STERIS and Wells Fargo Bank, National Association, as trustee (the “Trustee”), entered into the First Supplemental Indenture, dated as of June 2, 2021 (the “First Supplemental Indenture”), to the indenture, dated as of May 15, 2020 (the “Base Indenture” and, together with the First Supplemental Indenture, the “Indenture”), by and between the Company and the Trustee, relating to the Company’s 3.25% Convertible Senior Notes due 2025 (the “Convertible Notes”).
As a result of the Mergers, and pursuant to the First Supplemental Indenture, the Convertible Notes are no longer convertible into shares of common stock, par value $0.10 per share of the Company (“Company Shares”). Instead, to the extent such Convertible Notes were convertible immediately prior to the Mergers, such Convertible Notes will be convertible into cash and STERIS Shares (as defined below) in proportion to the Merger Consideration (as defined below) payable pursuant to the Merger Agreement, pursuant to the “Reference Property” provisions in the Indenture. This Current Report on Form 8-K does not constitute an offer or solicitation with respect to any securities.
The foregoing descriptions of the First Supplemental Indenture and the transactions contemplated thereby are subject to and qualified in their entirety by reference to the full text of the First Supplemental Indenture, which is filed as Exhibit 4.1 hereto and incorporated herein by reference.
| Item 1.02 | Termination of a Material Definitive Agreement. |
On the Closing Date, in connection with the consummation of the Mergers, the Company repaid in full and terminated that certain Fourth Amended and Restated Credit Agreement, dated June 28, 2018, by and among Cantel, certain subsidiaries of Cantel, the lenders party thereto, and Bank of America, N.A., as administrative agent, as amended by the First Amendment, dated as of September 6, 2019, and as further amended by the Second Amendment, dated as of May 11, 2020 (the “Credit Agreement”). In connection with the termination of the Credit Agreement, all outstanding borrowings and unpaid fees and expenses thereunder were paid in full, and all collateral securing repayment of amounts due under the Credit Agreement was released.
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
As described above, at the Second Merger Effective Time on the Closing Date, STERIS completed its previously announced acquisition of the Company. As a result of the Mergers, the Company became a wholly-owned subsidiary of STERIS. At the Pre-Closing Merger Effective Time, each Company Share issued and outstanding immediately before the Pre-Closing Merger Effective Time was converted into one share of common stock of Canyon Newco (the “NewCo Shares”). At the First Merger Effective Time, each NewCo Share issued and outstanding immediately before the First Merger Effective Time was converted into the right to receive (a) $16.93 in cash, without interest, and (b) 0.33787 ordinary shares, par value $0.001 per share, of STERIS (the “STERIS Shares”, and such consideration, the “Merger Consideration”).
At the First Merger Effective Time, each award of restricted stock units corresponding to Company Shares (each, a “Company RSU Award”) granted under the Company’s 2016 Equity Incentive Plan and the Company’s 2020 Equity Incentive Plan (other than an award contemplated by clauses (a) and (b) of the next sentence) to the extent not vested was automatically converted into a STERIS restricted stock unit award (a “STERIS RSU Award”). Each Company RSU Award (a) held by a non-employee director of the Company, certain retired employees and Charles M. Diker (the “Converted RSU Holders”) was converted into the number of Company Shares covered by such Company RSU Award prior to the Pre-Closing Merger Effective Time and was converted into a Newco Share at the Pre-Closing Merger Effective Time and ultimately into the right to receive the Merger Consideration at the First Effective Time and (b) that was subject to performance-based vesting conditions was automatically converted into a STERIS RSU Award and, subject to certain conditions, will vest pursuant to a schedule based on the date when the Company RSU Award was granted.
In connection with the closing of the First Merger, STERIS paid approximately $716.4 million in cash and issued approximately 14.3 million STERIS Shares to former holders of Newco Shares and the Converted RSU Holders.
The issuance of STERIS Shares in connection with the Merger Agreement was registered under the Securities Act of 1933 pursuant to STERIS’s registration statement on Form S-4 (Registration No. 333-253799) declared effective by the Securities and Exchange Commission (the “SEC”) on April 1, 2021 (the “Registration Statement”). The proxy statement/prospectus in the Registration Statement contains additional information about the Mergers and incorporates by reference additional information about the Mergers from Current Reports on Form 8-K filed by STERIS and the Company.
The foregoing description of the Merger Agreement and transactions contemplated thereby is subject to and qualified in its entirety by reference to the Merger Agreement and the Amendment to the Merger Agreement, which are filed as Exhibit 2.1 and Exhibit 2.2 to this Current Report on Form 8-K, respectively, the terms of which are incorporated by reference herein.
| Item 3.01 | Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing. |
In connection with the consummation of the Mergers, the Company notified the New York Stock Exchange (the “NYSE”) that trading in Company Shares should be suspended and listing of Company common stock on the NYSE should be removed. On the Closing Date, trading of Company Shares on the NYSE was suspended prior to the
opening of trading and the NYSE filed with the SEC a notification on Form 25 to delist and deregister Company Shares under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, the Company intends to file with the SEC a Form 15 requesting that the reporting obligations of the Company under Sections 13 and 15(d) of the Exchange Act be suspended.
| Item 3.03 | Material Modification to Rights of Security Holders. |
The information set forth under Items 2.01, 3.01 and 5.03 of this Current Report on Form 8-K is incorporated herein by reference herein.
| Item 5.01 | Changes in Control of Registrant. |
As a result of the Pre-Closing Merger, at the Pre-Closing Merger Effective Time, a change of control of the Company occurred, and the Company became a direct, wholly-owned subsidiary of Canyon Newco. As a result of the First Merger, at the First Merger Effective Time, a change of control of the Company occurred, and the Company became an indirect, wholly-owned subsidiary of US Holdco and STERIS. As a result of the Second Merger, at the Second Merger Effective Time, a change of control of the Company occurred, and the Company became a direct, wholly-owned subsidiary of US Holdco and an indirect, wholly-owned subsidiary of STERIS.
STERIS used a combination of cash on hand and a mix of financing from public and private debt sources to fund the cash portion of the Merger Consideration due in connection with the First Merger and the issuance of STERIS Shares to fund the stock portion of the Merger Consideration.
The information set forth above in the Introductory Note, under Item 2.01 and Item 5.02 of this Current Report on Form 8-K is incorporated by reference herein.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Effective as of the Pre-Closing Merger Effective Time, each of Charles M. Diker, George L. Fotiades, Brian R. Capone and Seth M. Yellin ceased to be executive officers of the Company and Peter G. Clifford became the President, Jeff Z. Mann became the Secretary and Shaun M. Blakeman became the Treasurer of the Company.
At the Pre-Closing Conversion Effective Time, each of Charles M. Diker, George L. Fotiades, Alan R. Batkin, Ann E. Berman, Anthony B Evnin, Laura L. Forese, Ronnie Myers, Peter J. Pronovost, Karen N. Prange and Mark N. Diker ceased to be directors of the Company and the Company became a member-managed Delaware limited liability company with no directors.
Promptly after the First Merger Effective Time, Peter G. Clifford, Jeff Z. Mann and Shaun M. Blakeman ceased to be officers of the Company and Michael J. Tokich became the President, Renato G. Tamaro became the Vice President and Treasurer, Karen L. Burton became the Vice President and Controller, Ronald E. Snyder became the Secretary and each of Julia Kipnis and John Schloss became an Assistant Secretary of the Company.
Effective as of the Closing Date, the Board of Directors of STERIS approved an omnibus amendment to the Company’s 2016 Equity Incentive Plan and the Company’s 2020 Equity Incentive Plan (together, the “Company Equity Plans”), which is filed as Exhibit 10.1 to this Current Report on Form 8-K (the “Equity Plan Amendment”) and incorporated by reference herein, and a form of conversion notice amending the award agreements evidencing outstanding Company RSU Awards (other than Company RSU Awards held by the Converted RSU Holders) (such award agreements, “Company Award Agreements”), which is filed as Exhibit 10.2 to this Current Report on Form 8-K (the “Conversion Notice”) and incorporated by reference herein. The purpose of the Equity Plan Amendment and Conversion Notice is to make administrative changes to the Company Equity Plans and Company Award Agreements to provide for the conversion of Company RSU Awards into STERIS RSU Awards as contemplated by the Merger Agreement and for future administration of the Company Equity Plans and the outstanding Company RSU Awards issued thereunder following the Closing. Generally, effective as of the Closing Date, the Equity Plan Amendment amended the Company Equity Plans and the Conversion Notice amended the Company Award Agreements as follows: (a) all references in the Company Equity Plans and Company Award Agreements (1) to
Cantel and/or its subsidiaries were deemed to be references to STERIS and/or its subsidiaries, (2) to Company Shares were deemed to be references to STERIS Shares, and (3) to the “Board” or “Committee” were deemed to be references to STERIS’s Board of Directors or, if delegation applies, to a committee (or subcommittee) thereof; and (b) the term “Change in Control” was amended to mean the consummation of the First Merger.
Prior to the First Merger Effective Time, pursuant to the terms of the Merger Agreement, the Company entered into agreements with certain executive officers, the form of which is filed as Exhibit 10.3 to this Current Report on Form 8-K (each, a “Make Whole Agreement”) and incorporated by reference herein, providing that, in the event that a covered executive receives any payments or benefits that are subject to tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), the covered executive will receive a payment that puts the covered executive in the same after-tax position as if the tax under Section 4999 of the Code did not apply. The Make Whole Agreements include certain restrictive covenants, including a non-compete. Each of George L. Fotiades, Peter G. Clifford, Jeff Z. Mann and Shaun M. Blakeman entered into a Make Whole Agreement that includes a 2-year non-compete.
| Item 5.03 | Amendment to the Articles of Incorporation or Bylaws; Change in Fiscal Year. |
Pursuant to the Merger Agreement, at the Pre-Closing Conversion Effective Time, as a result of the Pre-Closing Conversion, the Certificate of Formation of the Company attached as Exhibit 3.1 to this Current Report on Form 8-K and incorporated by reference herein, and the Limited Liability Company Agreement of the Company attached as Exhibit 3.2 to this Current Report 8-K on Form and incorporated by reference herein. Promptly after the Second Merger Effective Time the fiscal year of the Company was changed to March 31. The information set forth in the Introductory Note of this Current Report on Form 8-K and incorporated by reference herein.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits:
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CANTEL MEDICAL LLC | ||
| By | /s/ Michael J. Tokich | |
| Name: | Michael J. Tokich | |
| Title: | President | |
Dated: June 8, 2021
Exhibit 3.1
STATE OF DELAWARE
CERTIFICATE OF FORMATION
OF
CANTEL MEDICAL LLC
June 2, 2021
The undersigned authorized person, desiring to form a limited liability company pursuant to the Limited Liability Company Act of the State of Delaware, hereby certifies as follows:
1. Name. The name of the limited liability company is:
Cantel Medical LLC
2. Registered Office; Registered Agent. The address of the registered office of the limited liability company in the State of Delaware is located at:
Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
The name of the registered agent at such address upon whom process against this limited liability company may be served is:
The Corporation Trust Company
Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
3. Effective Time. The conversion to a limited liability company is to become effective at 8:40 a.m. Eastern Time on June 2, 2021.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate of Formation as of the date first written above.
| By: | CANYON HOLDCO, INC. | |
| its sole member | ||
| By: | /s/ Jeff Mann | |
| Jeff Mann | ||
| Secretary | ||
Signature Page to Certificate of Formation of Cantel Medical LLC
Exhibit 3.2
LIMITED LIABILITY COMPANY AGREEMENT
OF
CANTEL MEDICAL LLC
A Delaware Limited Liability Company
This LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) of Cantel Medical LLC (the “Company”), dated as of June 2, 2021, is adopted, executed and agreed to by Canyon HoldCo, Inc., a Delaware corporation and the sole member of the Company (the “Member”).
1. Name. The name of the Company is “Cantel Medical LLC”.
2. Term. The Company shall have perpetual existence.
3. Purposes. The purposes of the Company are to carry on any lawful business, purpose or activity for which limited liability companies may be formed under the Act.
4. Sole Member. The Member shall be the sole member of the Company. The Member shall not have any liability for the obligations or liabilities of the Company except to the extent provided for in the Act.
5. Contributions. Without creating any rights in favor of any third party, the Member may, from time to time, make capital contributions of cash or property to the capital of the Company, but shall have no obligation to do so.
6. Distributions. The Member shall be entitled (a) to receive all distributions (including, without limitation, liquidating distributions) made by the Company, and (b) to enjoy all other rights, benefits and interests in the Company.
7. Taxes. At any time that the Company has only one Member, it is the intention of the Member that the Company shall, to the extent permitted by applicable law, be disregarded as separate from its owner for U.S. federal (and applicable state and local) income tax purposes and that all items of income, gain, loss, deduction, credit or the like of the Company shall be treated as items of income, gain, loss, deduction, credit or the like of the Member. The Member shall prepare and timely file (on behalf of the Company) all state and local tax returns, if any, required to be filed by the Company.
8. Management.
(a) The management of the Company shall be exclusively vested in the Member, and the Company shall not have “managers,” as that term is used in the Act. The powers of the Company shall be exercised by or under the authority of, and the business and affairs of the Company shall be managed under the direction of, the Member, which shall make all decisions and take all actions for the Company.
(b) The Member may, from time to time, designate one or more persons to be officers or authorized representatives of the Company (each, an “Authorized Representative”) on such terms and conditions as the Member may determine. Any Authorized Representative so designated shall have such title and authority and perform such duties as the Member may, from time to time, designate or as are normally associated with such office. Any such Authorized Representative may be removed from their office with or without cause by a vote of the Member.
9. Exculpation and Indemnity. Notwithstanding any other provisions of this Agreement, whether express or implied, or any obligation or duty at law or in equity, neither the Member nor the Authorized Representatives (individually a “Covered Person” and, collectively, the “Covered Persons”) shall be liable or accountable in damages or otherwise to the Company for any act or omission done or omitted by a Covered Person in good faith, unless such act or omission constitutes willful misconduct. The Company shall indemnify each Covered Person to the fullest extent permitted by law against any loss, liability, damage, judgment, demand, claim, cost or expense incurred by or asserted against the Covered Person (including, without limitation, reasonable attorneys’ fees and disbursements incurred in the defense thereof) arising out of any act or omission of the Covered Person in connection with the Company, unless such act or omission constitutes bad faith, gross negligence or willful misconduct on the part of the Covered Person.
10. Dissolution. The Company shall dissolve and its affairs shall be wound up at such time, if any, as the Member may elect. No other event will cause the Company to dissolve.
11. Governing Law. This Agreement is governed by and shall be construed in accordance with the laws of the State of Delaware (excluding its conflict-of-laws rules).
12. Amendments. This Agreement may be modified, altered, supplemented or amended at any time by a written agreement executed and delivered by the Member.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned, being the Member, has caused this Agreement to be duly executed as of the date first set forth above.
| MEMBER: | ||
| CANYON HOLDCO, INC. | ||
| By: | /s/ Jeff Mann | |
| Name: | Jeff Mann | |
| Title: | Secretary | |
[Signature Page to Limited Liability Company Agreement]
Exhibit 4.1
CANTEL MEDICAL LLC
AND
STERIS PLC
AND
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee
FIRST SUPPLEMENTAL INDENTURE
June 2, 2021
3.25% Convertible Senior Notes due 2025
FIRST SUPPLEMENTAL INDENTURE, dated as of June 2, 2021 (this “First Supplemental Indenture”), among CANTEL MEDICAL LLC, a Delaware limited liability company (formerly known as Cantel Medical Corp., the “Company”), STERIS PLC, a company incorporated under the laws of Ireland (“Parent”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as trustee under the Original Indenture referred to below (the “Trustee”).
W I T N E S S E T H:
WHEREAS, the Company and the Trustee are parties to an Indenture, dated as of May 15, 2020 (the “Original Indenture”), pursuant to which the Company issued its 3.25% Convertible Senior Notes due 2025 (the “Notes”);
WHEREAS, the Company entered into an Agreement and Plan of Merger, dated as of January 12, 2021, as amended by Amendment to Agreement and Plan of Merger, dated as of March 1, 2021 (the “Merger Agreement”), by and among the Company, Parent, Solar New US Holding Corporation (formerly known as Solar New US Holding Co, LLC), a Delaware corporation and indirect and wholly-owned subsidiary of Parent (“US HoldCo”) and Crystal Merger Sub 1, LLC, a Delaware limited liability company and direct and wholly-owned subsidiary of US HoldCo (“Crystal Merger Sub”);
WHEREAS, pursuant to the terms of the Merger Agreement, prior to the closing of the transactions contemplated by the Merger Agreement (the “Closing”), the Company incorporated Canyon HoldCo, Inc., a Delaware corporation and direct and wholly owned subsidiary of the Company (“Canyon Newco”), and Grand Canyon Merger Sub, Inc., a Delaware corporation and direct and wholly owned subsidiary of Canyon Newco (“Canyon Merger Sub”), and on March 1, 2021, Canyon Newco, Canyon Merger Sub and the Company entered into a joinder to the Merger Agreement through which Canyon Newco and Canyon Merger Sub became parties to the Merger Agreement. The Merger Agreement provided for, among other things, (a) the merger of Canyon Merger Sub with and into the Company with the Company surviving the merger as a
direct and wholly-owned subsidiary of Canyon Newco (the “Pre-Closing Merger”), (b) immediately following the Pre-Closing Merger, the conversion of the Company from a Delaware corporation to a Delaware limited liability company (the “Pre-Closing Conversion”), (c) immediately following the Pre-Closing Conversion, the merger of Crystal Merger Sub with and into Canyon Newco with Canyon Newco surviving the merger as a direct and wholly-owned subsidiary of US Holdco (the “First Merger”) and (d) immediately after the First Merger, the merger of Canyon Newco with and into US Holdco, with US Holdco surviving the merger and remaining an indirect and wholly-owned subsidiary of Parent (the “Second Merger” and, together with the Pre-Closing Merger and the First Merger, the “Mergers”);
WHEREAS, pursuant to the Merger Agreement and subject to the terms and conditions therein, at the effective time of the Pre-Closing Merger (the “Pre-Closing Merger Effective Time”), each share of common stock, par value $0.10 per share, of the Company (the “Company Common Stock”) issued and outstanding immediately prior to the Pre-Closing Merger Effective Time will be automatically converted into the right to receive one share of common stock of Canyon Newco (the “Canyon Newco Common Stock”);
WHEREAS, pursuant to the Merger Agreement and subject to the terms and conditions therein, (x) at the effective time of the First Merger (the “First Merger Effective Time”), each share of Canyon Newco Common Stock (previously Company Common Stock) issued and outstanding immediately prior to the First Merger Effective Time will be automatically converted into the right to receive a combination of (i) ordinary shares, par value $0.001 per share, of Parent (“Parent Shares”) and (ii) cash (as described herein), the separate existence of Crystal Merger Sub will cease, and Canyon Newco will survive the First Merger as an direct and wholly-owned subsidiary of US Holdco, and (y) immediately thereafter, at the effective time of the Second Merger, the separate corporate existence of Canyon Newco will cease, and US Holdco will survive the Second Merger as an indirect and wholly-owned subsidiary of Parent;
WHEREAS, Section 10.01 of the Original Indenture provides that the Company, when authorized by the resolutions of the Board of Directors of the Company, and the Trustee, at the Company’s expense, may from time to time and at any time enter into a supplemental indenture, to provide, among other things, in connection with any Merger Event that the Notes are convertible into Reference Property (as defined below), subject to the provisions of Section 14.02 of the Original Indenture, and make such related changes to the terms of the Notes to the extent expressly required by Section 14.07 of the Original Indenture;
WHEREAS, Section 14.07 of the Original Indenture provides that in the case of a consolidation, merger or combination involving the Company, as a result of which Company Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets (a “Merger Event”), the Holder of each Note shall have the right to convert each $1,000 principal amount of Notes into a right to convert such principal amount of Notes into the kind and amount of shares of stock, other securities or other property or assets that a holder of a number of shares of Company Common Stock equal to the Conversion Rate immediately prior to such Merger Event would have owned or been entitled to receive (the “Reference Property,” with each “unit of Reference Property” meaning the kind and amount of Reference Property that a holder of one share of Company Common Stock is entitled to receive);
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WHEREAS, upon such Merger Event and, prior to or at the effective time of such Merger Event, the Company or the successor or purchasing Person, as the case may be, shall execute with the Trustee a supplemental indenture permitted under Section 10.01(h) of the Original Indenture providing for such right to convert each $1,000 principal amount of Notes into the Reference Property; provided, however, that the Company shall have the continued right, subject to Section 14.02 of the Original Indenture, to determine the Settlement Method with respect to any conversion of Notes;
WHEREAS, in connection with the execution and delivery of this First Supplemental Indenture, the Trustee has received an Officer’s Certificate as contemplated by Sections 10.05 and 14.07(b) of the Original Indenture and Opinion of Counsel as contemplated by Section 10.05 of the Original Indenture; and
WHEREAS, the Company and Parent have requested and hereby request that the Trustee execute and deliver this First Supplemental Indenture and have satisfied all requirements necessary to make this First Supplemental Indenture a valid and binding instrument, enforceable against each of the Company and the Parent in accordance with its terms.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Company, Parent and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions in this First Supplemental Indenture. A term defined in the Original Indenture has the same meaning when used in this First Supplemental Indenture unless such term is otherwise defined herein or amended or supplemented pursuant to this First Supplemental Indenture. The words “herein,” “hereof,” “hereunder,” and words of similar import refer to this First Supplemental Indenture as a whole and not to any particular Article, Section or other subdivision.
ARTICLE II
EFFECT OF MERGER ON CONVERSION RIGHT
Section 2.01 Parent to Provide Parent Shares. Parent hereby irrevocably and unconditionally agrees to be bound by the terms of this First Supplemented Indenture applicable to it and to issue Parent Shares as necessary to satisfy the Company’s obligations with respect to any Notes validly surrendered for conversion pursuant to Article 14 of the Original Indenture.
Section 2.02 Conversion Right. (a) The Company and Parent expressly agree that, in accordance with Section 14.07 of the Original Indenture, immediately after the Pre-Closing Merger Effective Time and before the First Merger Effective Time, the Holder of each Note that was outstanding as of the Pre-Closing Merger Effective Time shall have the right to convert each $1,000 principal amount of such Note into a number of units of Reference Property equal to the Conversion Rate (as defined in the Original Indenture). The Conversion Rate immediately following the Pre-Closing Merger Effective Time will be 24.0912 Units of Reference Property for each $1,000 principal amount of Notes. As used in this Section 2.02(a), “Unit of Reference Property” shall mean one share of Canyon NewCo Common Stock.
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(b) The Company and Parent expressly agree that, in accordance with Section 14.07 of the Original Indenture, at and after the First Merger Effective Time, the Holder of each Note that was outstanding as of the First Merger Effective Time shall have the right to convert each $1,000 principal amount of such Note into a number of units of Reference Property equal to the Conversion Rate (as defined in the Original Indenture). The Conversion Rate immediately following the First Merger Effective Time will be 24.0912 Units of Reference Property for each $1,000 principal amount of Notes (prior to giving effect to any Additional Shares added to the Conversion Rate in accordance with Section 14.03). As used in this Section 2.02(b), “Unit of Reference Property” shall mean, collectively, (i) $16.93 in cash and (ii) 0.33787 Parent Shares.
(c) The provisions of the Original Indenture, as modified herein, including without limitation, (i) all references and provisions respecting the terms “Common Stock,” “Conversion Price,” “Conversion Rate,” “Daily Conversion Value,” “Daily VWAP,” “Ex-Dividend Date,” “Last Reported Sale Price,” “Observation Period,” “Settlement Amount,” “Cash Settlement,” “Market Disruption Event,” and “Trading Day” shall continue to apply, mutatis mutandis, to the Holders’ right to convert their Notes into applicable Units of Reference Property. The Conversion Rate shall be adjusted as a result of events occurring subsequent to the date hereof with respect to the Reference Property as nearly equivalent as may be practicable to the adjustments of the Conversion Rate provided for in Article 14 of the Original Indenture.
ARTICLE III
MISCELLANEOUS
Section 3.01 Ratification of Original Indenture. The Original Indenture, as supplemented by this First Supplemental Indenture, is in all respects ratified and confirmed, and this First Supplemental Indenture shall be deemed part of the Original Indenture in the manner and to the extent herein and therein provided.
Section 3.02 Conflict with Original Indenture. To the extent not expressly amended or modified by this First Supplemental Indenture, the Original Indenture shall remain in full force and effect. If any provision of this First Supplemental Indenture is inconsistent with any provision of the Original Indenture, the provision of this First Supplemental Indenture shall control.
Section 3.03 Successors. All agreements of the Company, the Parent and the Trustee in this First Supplemental Indenture shall bind their respective successors.
Section 3.04 Governing Law. THIS FIRST SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS FIRST SUPPLEMENTAL INDENTURE, THE ORIGINAL INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY AND THEREBY.
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Section 3.05 Counterparts. This First Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. The exchange of copies of this First Supplemental Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this First Supplemental Indenture as to the parties hereto and may be used in lieu of the original First Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.
The words “execution,” “signed,” “signature,” and words of like import in this First Supplemental Indenture shall be deemed to include electronic signatures or electronic records, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
Section 3.06 Headings. The headings of the Articles and Sections of this First Supplemental Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.
Section 3.07 Severability. In case any provision in this First Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.
Section 3.08 Trustee Not Responsible for Recitals. The recitals and statements herein contained are made solely by the Company and the Parent and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity, adequacy or sufficiency of this First Supplemental Indenture. All of the provisions contained in the Original Indenture in respect of the rights, privileges, protections, benefits, immunities, powers, and duties of the Trustee shall be applicable in respect of this First Supplemental Indenture (and any action or inaction hereunder or in connection herewith) as fully and with like force and effect as though set forth in full herein.
[Signature Pages Follows]
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IN WITNESS WHEREOF, the parties have caused this First Supplemental Indenture to be duly executed as of the date first written above.
| CANTEL MEDICAL LLC | ||
| By: | /s/ Michael J. Tokich | |
| Name: | Michael J. Tokich | |
| Title: | President | |
| STERIS PLC | ||
| By: | /s/ Michael J. Tokich | |
| Name: | Michael J. Tokich | |
| Title: | Senior Vice President and Chief Financial Officer | |
| WELLS FARGO BANK, NATIONAL ASSOCIATION, | ||
| as Trustee | ||
| By: | /s/ Patrick Giordano | |
| Name: | Patrick Giordano | |
| Title: | Vice President | |
[Signature Page to the First Supplemental Indenture]
Exhibit 10.1
OMNIBUS AMENDMENT TO CANTEL MEDICAL CORP. 2016 EQUITY INCENTIVE PLAN
AND CANTEL MEDICAL CORP. 2020 EQUITY INCENTIVE PLAN
STERIS plc, a public limited company incorporated under the laws of Ireland (the “Company”), hereby adopts this Omnibus Amendment (this “Amendment”) to Cantel Medical Corp. 2016 Equity Incentive Plan (the “2016 Plan”) and Cantel Medical Corp. 2020 Equity Incentive Plan (the “2020 Plan”) (collectively, the “Plans”) effective as of June 2, 2021.
1. In each of the Plans, the definition of “Benefit Plan” in each Section 2 is hereby amended in its entirety to read as follows:
“‘Benefit Plan’ means any employment agreement, severance agreement or similar agreement between the Participant and the Company (or a Subsidiary) or any long-term incentive plan or similar plan of the Company (or a Subsidiary) which covers the Participant, in each case which includes provisions relating to an Award granted hereunder.”
2. In each of the Plans, the definition of “Board” in each Section 2 is hereby amended in its entirety to read as follows:
“‘Board’ means the Board of Directors of the Company, and, to the extent of any delegation by the Board of Directors of the Company to the Compensation Committee of the Board of Directors of the Company or any other Committee of the Board of Directors of the Company (or subcommittee thereof) such Committee (or subcommittee).
3. In each of the Plans, the definition of “Change in Control” in each Section 2 is hereby amended in its entirety to read as follows:
“‘Change in Control’ means the consummation of the transactions (the “Mergers”) contemplated by that certain Agreement and Plan of Merger, dated as of January 12, 2021, entered between the Company, Cantel Medical Corp., Solar New US Holding Co, LLC, and Crystal Merger Sub 1 LLC, as amended (the “Merger Agreement”). For the avoidance of doubt, no other transactions and/or events that occur following the Closing Date will constitute a Change in Control.”
4. In each of the Plans, the following definition is added to Section 2 thereof:
“Closing Date” shall mean the date of consummation of the Mergers.
5. In each of the Plans, the definition of “Company” in each Section 2 is hereby amended in its entirety to read as follows:
“‘Company’ means STERIS plc, a public limited company incorporated under the laws of Ireland.”
6. In each of the Plans, the definition of “Shares” in each Section 2 is hereby amended in its entirety to read as follows:
“‘Shares’ means ordinary shares of $0.001 each (nominal value) in the capital of the Company.”
7. All references to “Committee” in each of the Plans, excluding such references contained in the Plans’ definitions of “Board” as amended by Section 3 hereof, are hereby deleted and replaced with “Board.”
8. Section 4 of the Plans shall be amended to add a new subsection (subsection (h) for the 2020 Pan and subsection (i) for the 2016 Plan) to the end thereof as follows:
“Notwithstanding any provision of the Plan to the contrary, no new Awards shall be granted under the Plan following the Closing Date.”
9. Except as specifically modified herein, the Plans shall remain in full force and effect in accordance with all of the terms and conditions thereof.
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Exhibit 10.2
Notice of Conversion in Connection with Merger
Cantel Restricted Stock Units
Introduction
As you may know, effective January 12, 2021, Cantel Medical Corp. (“Cantel”) and STERIS plc (“STERIS”) entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which STERIS will acquire Cantel through a series of merger transactions (the “Mergers”).
You were previously granted restricted stock units pursuant to the terms of the Cantel 2016 Equity Incentive Plan and/or the Cantel 2020 Equity Incentive Plan, as applicable (the “Plan”), and related award agreement(s) (the “Award Agreement”). You are receiving this notice because you hold unvested restricted stock units (“Cantel RSUs”) in respect of Cantel common stock (“Cantel Stock”). In connection with the Mergers, and pursuant to the applicable Plan and the Award Agreement, each Cantel RSU held by you immediately prior to the consummation of the Mergers will be adjusted and converted into an award denominated in restricted stock units of STERIS (“STERIS RSUs”) in respect of STERIS ordinary shares (“STERIS Shares”), as explained in more detail below.
How Your Award(s) Will Be Adjusted
Upon the consummation of the Mergers, time-based Cantel RSUs outstanding immediately prior to the Mergers will be converted into STERIS RSUs with respect to the aggregate number of STERIS RSUs equal to the product of (1) the number of Cantel RSUs outstanding immediately prior to the Mergers multiplied by (2) the exchange ratio set forth in the Merger Agreement, which takes into account the average trading price of STERIS Shares in the ten days prior to consummation of the Mergers. Because the exchange ratio cannot be determined until the Mergers are complete, the number of new STERIS RSUs is not yet known.
[Upon the consummation of the Mergers, performance-based Cantel RSUs outstanding immediately prior to the Mergers will be converted into STERIS RSUs with respect to the aggregate number of STERIS RSUs equal to the product of (1) the number of Cantel RSUs (assuming achievement of target level of performance) outstanding immediately prior to the Mergers multiplied by (2) the exchange ratio set forth in the Merger Agreement, which takes into account the average trading price of STERIS Shares in the ten days prior to consummation of the Mergers. Because the exchange ratio cannot be determined until the Mergers are complete, the number of new STERIS RSUs is not yet known.]1
Additional Terms of Your New STERIS RSUs
Except as described in this notice, your STERIS RSUs will continue to be governed by the applicable Award Agreement and Plan. Upon consummation of the Mergers, you will be subject to STERIS’s Insider Trading Policy, which contains various restrictions on transactions including the timing of sales of owned STERIS Shares.
[Following consummation of the Mergers and conversion of your Cantel RSUs, your performance-based Cantel RSUs will no longer be subject to performance-based vesting conditions. Instead, your STERIS RSUs issued in exchange for your performance-based Cantel RSUs will vest over time conditioned on your continued employment depending on when the Mergers occur in relation to the original grant date of your performance-based Cantel RSUs as shown in the table below:
| 1 | To be included only for equity award holders who hold performance-based RSUs. |
1
| If the consummation of the Mergers occurs: |
Then my STERIS RSUs will vest: | |
| Prior to the first anniversary of the original grant date | In equal installments upon the first, second, and third anniversaries of the original grant date | |
| On or after the first anniversary of the original grant date but prior to the second anniversary of the original grant date | In equal installments upon the second and third anniversaries of the original grant date | |
| On or after the second anniversary of the original grant date but prior to the third anniversary of the original grant date | In one installment upon the third anniversary of the original grant date | |
]2
Each Plan will be adopted by STERIS and amended to reflect the result of the Mergers effective as of the consummation of the Mergers. Generally, all references in your Award Agreement and each Plan: (A) to Cantel and/or its subsidiaries are hereby deemed to be references to STERIS and/or its subsidiaries, (B) to Cantel Stock are hereby deemed to be references to STERIS Shares, and (C) to the Board or Committee are hereby deemed to be references to STERIS’s Board of Directors, or, if delegation applies, to a committee (or subcommittee) thereof. The term “Change in Control” for purposes of your STERIS RSUs and each Plan shall mean the consummation of the Mergers. Otherwise, all other terms and conditions in each Award Agreement and each Plan, including vesting [(with respect to time-based Cantel RSUs)]3 and acceleration provisions, shall continue to apply to your STERIS RSUs.
Where You Can Go For Additional Information
For more information about the Mergers, please refer to the proxy statement/prospectus filed by STERIS with the U.S. Securities and Exchange Commission on March 30, 2021, which is available online through a search for “STERIS” at www.sec.gov/edgar/searchedgar/companysearch.html.
Your STERIS RSUs will be held in an account at Charles Schwab which will be set up for you. Fidelity will not be the record keeper for any STERIS RSUs. Following confirmation of the Mergers, you can obtain more information regarding your STERIS RSUs by logging into your account at Charles Schwab. You will receive more information on establishing an account with Charles Schwab in a separate communication. Please be aware that the account establishment process may take several days.
For questions about this notice, the treatment of your Cantel RSUs or your new STERIS RSUs, please contact Hilary Morton, 440-392-7221, hilary_morton@steris.com. A summary plan prospectus for each Plan (as amended and adopted by STERIS) will be provided to you following consummation of the Mergers.
| 2 | To be included only for equity award holders who hold performance-based RSUs. |
| 3 | To be included only for equity award holders who hold performance-based RSUs. |
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Exhibit 10.3
FORM OF MAKE WHOLE AGREEMENT
MAKE WHOLE AGREEMENT (this “Agreement”), by and between Cantel Medical Corp. (the “Company”), a Delaware corporation and [•] (the “Executive”), dated as of the [•] day of May, 2021.
WHEREAS, the Company has entered into an Agreement and Plan of Merger (“Merger Agreement”), by and among STERIS plc, Solar New US Holding Co, LLC, Crystal Merger Sub 1 LLC and the Company, pursuant to which the Mergers will occur;
[WHEREAS, Executive previously entered into a Confidentiality and Non-Competition Agreement with the Company, dated [•] (the “Non-Compete Agreement”) pursuant to which Executive agreed to restrictions on competing with the Company for the [•] month period (the “Original Restricted Period”) following Executive’s termination of employment with the Company;
WHEREAS, because Executive has intimate and valuable knowledge and experience in the operation of the Company’s business and other confidential information related to the Company’s business, the Company has determined that it is in the best interests of the Company to induce Executive to agree to extend the Original Restricted Period by [•] months for a total of [•] months (the “Extended Restricted Period”);]1
[WHEREAS, because Executive has intimate and valuable knowledge and experience in the operation of the Company’s business and other confidential information related to the Company’s business, the Company has determined that it is in the best interests of the Company to induce Executive to agree not to compete with the Company or to solicit the Company’s customers, employees or consultants following Executive’s termination of employment with the Company, as further set forth in this Agreement (collectively, the “Restrictive Covenants”);]2
[WHEREAS, as an inducement for Executive agreeing to the [Restrictive Covenants] [Extended Restricted Period], the Company has determined to offer Executive the consideration described in Section 1(a) of this Agreement, provided that Executive agrees to the [Extended Restricted Period] [Restrictive Covenants];
WHEREAS, the Company would not have agreed to provide Executive with the Make Whole Payment (as defined below) but for Executive’s agreement to [the Extended Restricted Period] [abide by the Restrictive Covenants and provided further that it is the parties’ intention that the reasonable compensation valuation described in Section 1(f) of this Agreement not be limited to the amount of the consideration described in Section 1(a) of this Agreement;]
| 1 | For executives with existing non-competes |
| 2 | For executives with no existing non-compete |
and
WHEREAS, capitalized terms used in this Agreement that are not defined shall have the meanings ascribed to such terms in the Merger Agreement;
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Make Whole.
(a) In the event it shall be determined pursuant to Section 1(b) below that any Payment (as defined below) would be subject to the Excise Tax (as defined below), then the Executive shall be entitled to receive from the Company an additional payment (the “Make-Whole Payment”) in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income and employment taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Make-Whole Payment, but excluding any taxes and penalties imposed pursuant to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), the Executive retains an amount of the Make-Whole Payment equal to the Excise Tax imposed upon the Payments. The Company’s obligation to make Make-Whole Payments under this Section 1 shall not be conditioned upon the Executive’s termination of employment.
(b) Subject to the provisions of Section 1(c), all determinations required to be made under this Section 1, including whether and when a Make-Whole Payment is required and the amount of such Make-Whole Payment and the assumptions to be utilized in arriving at such determination, shall be made by a firm mutually selected and agreed to by the Company and Parent (the “Designated Firm”). The Designated Firm shall provide detailed supporting calculations both to the Company, Parent and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company or Parent. All fees and expenses of the Designated Firm shall be borne solely by the Company. Any determination by the Designated Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Designated Firm hereunder as to whether a Make-Whole Payment should be made, it is possible that Make-Whole Payments that were not made by the Company should have been made (an “Underpayment”) or that Make-Whole Payments that have been made by the Company should not have been made (an “Overpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 1(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Designated Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive. In the event that the Designated Firm subsequently determines that there has been an Overpayment, the Designated Firm shall determine the amount
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of any Overpayment that has occurred and the Executive shall pay the amount of such Overpayment to the Company, unless the Executive has paid such amounts to the Internal Revenue Service in which case the Executive shall take reasonable actions with the assistance of the Company (and at the Company’s expense) to secure a refund of such Overpayment from the Internal Revenue Service, which refund, when received, shall be paid over to the Company.
(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Make-Whole Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Executive is informed in writing of such claim. The Executive shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which the Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due after exhausting all extensions). If the Company notifies the Executive in writing prior to the expiration of such period that the Company desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the Company relating to such claim,
(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order to effectively contest such claim, and
(iv) permit the Company to participate in any proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties, but excluding taxes and penalties imposed pursuant to Code Section 409A) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties related thereto, but excluding taxes and penalties imposed pursuant to Code Section 409A) imposed as a result of such contest. Without limitation on the foregoing provisions of this Section 1(c), the Company shall control all proceedings taken in connection with such contest and, at its sole discretion, upon approval by Parent, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the applicable taxing authority in respect of such claim and may, at its sole discretion upon approval by Parent, either pay the tax claimed to the appropriate taxing authority on behalf of the Executive and direct the
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Executive to sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company pays such claim and directs the Executive to sue for a refund, the Company shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto, but excluding taxes and penalties imposed pursuant to Code Section 409A) imposed with respect to such payment or with respect to any imputed income in connection with such payment; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which the Make-Whole Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of a Make-Whole Payment or payment by the Company of an amount on the Executive’s behalf pursuant to Section 1(c), the Executive becomes entitled to receive any refund with respect to the Excise Tax to which such Make-Whole Payment relates or with respect to the payment of such claim pursuant to Section 1(c), the Executive shall (subject to the Company’s complying with the requirements of Section 1(c) to the extent applicable) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after payment by the Company of an amount on the Executive’s behalf pursuant to Section 1(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then the amount of such payment shall offset, to the extent thereof, the amount of any Make-Whole Payment required to be paid.
(e) Any Make-Whole Payment, as determined pursuant to this Section 1, shall be paid by the Company to the Executive within ten days of the receipt of the Designated Firm’s determination (or on the due date of the Excise Tax, if later); provided that the Make-Whole Payment shall in all events be paid no later than the end of the Executive’s taxable year next following the Executive’s taxable year in which the Excise Tax (and any income or other related taxes or interest or penalties thereon) on a Payment are remitted to the Internal Revenue Service or any other applicable taxing authority or, in the case of amounts relating to a claim described in Section 1(c) that does not result in the remittance of any federal, state, local and foreign income, excise, social security and other taxes, the calendar year in which the claim is finally settled or otherwise resolved. Notwithstanding any other provision of this Section 1, the Company may, in its sole discretion, withhold and pay to the Internal Revenue Service or any other applicable taxing authority, for the benefit of the Executive, all or any portion of the Make-Whole Payment, and the Executive hereby consents to such withholding.
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(f) The Executive shall cooperate with the Company in good faith in valuing, and the Designated Firm shall take into account the value of, services provided or to be provided by the Executive (including without limitation, the Executive agreeing to refrain from performing services pursuant to a covenant not to compete or similar covenant) before, on or after the date of a change in ownership or control of the Company (within the meaning of Q&A-2(b) of Section 280G of the Code), such that payments in respect of such services (or refraining from performing such services) may be considered reasonable compensation within the meaning of Q&A-9 and Q&A-40 to Q&A-44 of Section 280G of the Code and/or exempt from the definition of the term “parachute payment” within the meaning of Q&A-2(a) of Section 280G of the Code in accordance with Q&A-5(a) of Section 280G of the Code.
(g) The following terms shall have the following meanings for purposes of this Section 1.
(i) “Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax.
(ii) A “Payment” shall mean any payment, benefit, vesting or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of the Executive that constitutes a “parachute payment” under Section 280G(b)(2) of the Code as a result of the Merger.
[2. Extended Restricted Period. Executive agrees that the reference in [Section 4] of the Non-Compete Agreement to [“six (6) months”][“twelve (12) months”] shall be replaced with “[•] ([•]) months”. For the avoidance of doubt, the provisions of the Non-Compete Agreement shall not be amended except as provided in this Section 2 and remain in full force and effect.]1
2. [Restrictive Covenants.2
(a) Non-interference. Executive agrees that for a period of two years following termination of Executive’s employment with the Company, he will not (i) induce or attempt to induce any other employee of the Company to leave the employ of the Company, or in any way interfere with the relationship between the Company and any other employee, or (ii) induce or attempt to induce any customer, supplier, franchisee, licensee, distributor or other business relation of the Company to cease doing business with the Company, or in any way interfere with the relationship between any customer, franchisee or other business relation and the Company without prior written consent of the Board of Directors of the Company.
| 1 | For executives with existing non-competes |
| 2 | For executives with no existing non-compete |
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(b) Non-Compete. Executive agrees that for a period of [•] ([•]) months following the termination of Executive’s employment hereunder, Executive will not, directly or indirectly, render services to or for any business within the continental United States or Canada to the extent such services by Executive are directly and materially competitive with a material business of the Company and are similar to the services Executive provided to the Company within the two years prior to Executive’s termination or that would require the use of Company’s confidential information or trade secrets in Executive’s possession, provided, however, that the foregoing shall not be deemed to prevent the ownership by Executive of up to three (3%) percent of any class of securities of any corporation which is regularly traded on any stock exchange or over-the-counter market.
(c) Executive Covenants Generally.
(i) Executive’s covenants as set forth in this Section 2 are from time to time referred to herein as the “Executive Covenants.” If any of the Executive Covenants is held to be invalid, illegal or unenforceable (whether in whole or in part), such Executive Covenants shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability and the remaining Executive Covenants shall not be affected thereby; provided, however, that if any of the Executive Covenants is held to be invalid, illegal or unenforceable because it exceeds the maximum scope determined to be acceptable to permit such provision to be enforceable, such Executive Covenants will be deemed to be modified to the minimum extent necessary to modify such scope in order to make such provision enforceable hereunder.
(ii) Executive understands that the Executive Covenants may limit Executive’s ability to earn a livelihood in a Competing Business.
(iii) Any termination of Executive’s employment or of this Agreement shall have no effect on the continuing operation of this Section 2.
(iv) Executive acknowledges that the Company would be irreparably injured by a violation of this Section 2 and that it is impossible to measure in money the damages that will accrue to the Company by reason of a failure by Executive to perform any of Executive’s obligations under this Section 2. Accordingly, if the Company institutes any action or proceeding to enforce any of the provisions of this Section 2, to the extent permitted by applicable law, Executive hereby waives the claim or defense that the Company has an adequate remedy at law, and Executive shall not urge in any such action or proceeding the defense that any such remedy exists at law. Furthermore, in addition to other remedies that may be available, the Company shall be entitled to specific performance and other injunctive relief, without the requirement to post bond.
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(d) Nothing in this Agreement supersedes or in any way limits or otherwise affects any restrictive covenants to which Executive may be bound, pursuant to another agreement with the Company or an affiliate thereof.]
3. Successors. (a) This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors (including by operation of law) and assigns.
(c) As used in this Agreement, “the Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise.
4. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of [New Jersey] [Texas] [Minnesota], without reference to principles of conflict of laws. Executive and the Company agree to submit to the jurisdiction of the state and federal courts of the State of New Jersey.
(b) The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.
(c) This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.
(d) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
| If to Executive: | At the most recent address on file at the Company. | |||
| If to the Company: | STERIS plc 5960 Heisley Road Mentor, OH 44060 Attention: J. Adam Zangerle, Senior Vice President, General Counsel, and Company Secretary | |||
or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
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(e) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(f) This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
(g) Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right Executive or the Company may have hereunder shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.
(h) This Agreement supersedes Section 9.2 of the Executive Severance Plan.
(i) In the event that the Merger Agreement is terminated for any reason prior to the consummation of the Merger, this Agreement shall be null and void and of no force or effect.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Executive has hereunto set Executive’s hand and, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above written.
| [EXECUTIVE] | ||
|
| ||
| CANTEL MEDICAL CORP | ||
| By | ||
| Name: | ||
| Title: |
[SIGNATURE PAGE TO MAKE WHOLE AGREEMENT]
Document and Entity Information |
Jun. 02, 2021 |
|---|---|
| Cover [Abstract] | |
| Amendment Flag | false |
| Entity Central Index Key | 0000019446 |
| Current Fiscal Year End Date | --07-31 |
| Document Type | 8-K |
| Document Period End Date | Jun. 02, 2021 |
| Entity Registrant Name | CANTEL MEDICAL LLC |
| Entity Incorporation State Country Code | DE |
| Entity File Number | 001-31337 |
| Entity Tax Identification Number | 22-1760285 |
| Entity Address, Address Line One | 150 Clove Road |
| Entity Address, City or Town | Little Falls |
| Entity Address, State or Province | NJ |
| Entity Address, Postal Zip Code | 07424 |
| City Area Code | (937) |
| Local Phone Number | 890-7220 |
| Entity Information, Former Legal or Registered Name | CANTEL MEDICAL CORP. |
| Written Communications | false |
| Soliciting Material | false |
| Pre Commencement Tender Offer | false |
| Pre Commencement Issuer Tender Offer | false |
| Security 12b Title | Common Stock |
| Trading Symbol | CMD |
| Security Exchange Name | NYSE |
| Entity Emerging Growth Company | false |
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