[Elected Vice President Form]
Amendment Dated July 19, 1993
to Employment Agreement Dated February 1, 1992
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PALL CORPORATION, a New York Corporation ("the Company") and
Xxxx X. Xxxxxx ("Executive") hereby agree that the Employment Agreement between
them dated February 1, 1992 is hereby amended by changing ss. 3(b) thereof to
read and provide as follows:
(b) Bonus Compensation. With respect to each fiscal year of
the Company falling in whole or in part within the Term of Employment beginning
with the fiscal year ending July 31, 1993, Executive shall be entitled to a
bonus (in addition to his Base Salary) in such amount and computed in such
manner as shall be determined by the Board of Directors but in no event shall
the bonus payable to Executive under this ss.3(b) be less than an amount
computed by applying to the fiscal year in question the following bonus formula:
"Bonus Compensation" means the amount, if any, payable to
Executive under this ss.3(b).
"Average Equity" means the average of stockholders' equity as
shown on the fiscal year-end consolidated balance sheet of the Company as of the
end of the fiscal year with respect to which Bonus Compensation is being
computed hereunder and as of the end of the immediately preceding fiscal year
(e.g., "Average Equity" to be used in computing Bonus Compensation for the
fiscal year ending July 31, 1993 will be the average of stockholders' equity as
of August 1, 1992 and July 31, 1993) except that the amount shown as the
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"equity adjustment from foreign currency translation" on each such consolidated
balance sheet shall be disregarded and the amount of $3,744,000 shall be the
equity adjustment (increase) from foreign currency translation used to determine
stockholders' equity at each such year-end balance sheet date.
"Net Earnings" means the after-tax consolidated net earnings of the
Company and its subsidiaries as certified by its independent accountants for
inclusion in the annual report to stockholders except that the restructuring
charge in the amount of $17,301,000 (after tax) taken by the Company in fiscal
1993 shall be disregarded (i.e., shall not be treated as a charge to income) in
determining Net Earnings for that year.
"Return on Equity" means Net Earnings as a percentage of Average
Equity.
For fiscal years 1993, 1994 and 1995, "Zero Bonus Percentage" shall
mean a Return on Equity of 12.5%. For fiscal years 1993 and 1994, "Maximum Bonus
Percentage" shall mean a Return on Equity of the following respective
percentages:
Fiscal year 1993 - 18.5%
Fiscal year 1994 - 19.0%
For fiscal years after fiscal 1995 the Company shall determine the Zero Bonus
Percentage, and for fiscal years after fiscal 1994 the Company shall determine
the Maximum Bonus Percentage, consistent in each case with expected
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results based upon the Company's normal projection procedures, or based
on sound statistical or trend data, and the determination by the
Company of such percentages shall be conclusive and binding on
Executive.
If Return on Equity for the fiscal year in question is the Zero Bonus Percentage
or less, no Bonus Compensation shall be payable. If Return on Equity equals or
exceeds the Maximum Bonus Percentage, the Bonus Compensation payable to
Executive shall be 70% of his Base Salary. If Return on Equity is more than the
Zero Bonus Percentage and less than the Maximum Bonus Percentage, the Bonus
Compensation shall be increased from zero percent of Base Salary towards 70% of
Base Salary in the same proportion that Return on Equity increases from the Zero
Bonus Percentage to the Maximum Bonus Percentage. Thus, for example, if Return
on Equity for fiscal 1993 is 15.50% (the midpoint between 12.5% and 18.5%) the
Bonus Compensation shall be an amount equal to 35% of Executive's Base Salary
(the midpoint between zero percent of Base Salary and 70% of Base Salary).
The Bonus Compensation shall be paid in installments as
follows:
(i) 50% of the estimated amount thereof in July of the fiscal
year with respect to which the Bonus Compensation is payable (e.g., 50%
in July 1993 with respect to Bonus Compensation for the fiscal year
ending July 31, 1993), based on the then current projections of Return
on Equity, and
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(ii) the balance thereof not later than January 15th next
following the end of the fiscal year with respect to which the Bonus
Compensation is payable.
With respect to any fiscal year of the Company which falls
in part but not in whole within the Term of Employment, the Bonus Compensation
to which Executive is entitled under this ss.3(b) shall be prorated on the basis
of the number of days of such fiscal year falling within the Term of Employment
except that if the Term of Employment ends within five days before or after the
end of a fiscal year, there shall be no proration and the Bonus Compensation
shall be payable with respect to the full fiscal year ending within such
five-day period.
* * * * *
Except as expressly amended hereby, said Employment
Agreement dated February 1, 1992 shall remain in full force and effect in
accordance with its terms.
PALL CORPORATION
/s/ Xxxx Xxxxxxxx
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Executive Vice President
/s/ Xxxx X. Xxxxxx
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Executive
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