EXHIBIT 10.7
[Senior Vice President
Split Bonus]
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated September 12, 2005 between PALL CORPORATION,
a New York corporation (the "Company") and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Executive").
In consideration of the mutual agreements hereinafter set forth, the
parties hereto agree as follows:
SS 1. EMPLOYMENT AND TERM
The Company hereby employs Executive, and Executive hereby agrees to
serve, as an executive employee of the Company with the duties set forth in
ss.2, for a term (hereafter called The "Term of Employment") beginning September
12, 2005 (the "Term Commencement Date") and ending, unless sooner terminated
under ss.4, on the effective date specified in a notice of termination given by
either party to the other except that such effective date shall not be earlier
than the second anniversary of the date on which such notice is given.
SS 2. DUTIES
(a) Executive agrees that during the Term of Employment he will hold
such offices or positions with the Company, and perform such duties and
assignments relating to the business of the Company, as the Chief Executive
Officer of the Company shall direct except that Executive shall not be required
to hold any office or position or to perform any duties or assignment
inconsistent with his experience and qualifications.
(b) If the Chief Executive Officer of the Company so directs, Executive
shall serve as an officer of one or more subsidiaries of the Company (provided
that the duties of such office are not inconsistent with Executive's experience
and qualifications) and part or all of the compensation to which Executive is
entitled hereunder may be paid by such subsidiary or subsidiaries. However, such
employment and/or payment of Executive by a subsidiary or subsidiaries shall not
relieve the Company from any of its obligations under this Agreement except to
the extent of payments actually made to Executive by a subsidiary.
(c) During the Term of Employment Executive shall, except during
customary vacation periods and periods of illness, devote substantially all of
his business time and attention to the performance of his duties hereunder and
to the business and affairs of the Company and its subsidiaries and to promoting
the best interests of the Company and its subsidiaries and he shall not, either
during or outside of such normal business hours, engage in any activity inimical
to such best interests.
SS 3. COMPENSATION DURING TERM OF EMPLOYMENT
(a) Base Salary. With respect to the period beginning on the Term
Commencement Date and ending on the 31st day of July next following the Term
Commencement Date, the Company shall pay Executive a Base Salary (in addition to
the compensation provided for elsewhere in this Agreement) at the rate of
$318,000 per annum (hereinafter called the "original Base Salary"). With respect
to each Contract Year beginning with the Contract Year which starts on the first
day of August next following the Term Commencement Date, the Company shall pay
Executive a Base Salary at such rate as the Chief Executive Officer may
determine but not less than the Original base Salary adjusted as follows: The
Term "Contract Year" as used herein means the period from August 1 of each year
through July 31 of the following year. The term "Consumer Price Index" as herein
used means the "Consumer Price Index for all Urban Consumers" compiled and
published by the Bureau of Labor Statistics of the United States Department of
Labor for "New York - Northern N.J. - Long Island, NY-NJ-CT-PA". For each
Contract Year during the Term of Employment beginning with the Contract Year
which starts on the first day of August next following the Term Commencement
Date, the minimum compensation payable to Executive under this ss.3(a)
(hereinafter called the "Minimum Base Salary") shall be determined by increasing
(or decreasing) the Original Base Salary by the percentage increase (or
decrease) of the Consumer Price Index for the month of June immediately
preceding the start of the Contract Year in question over (or below) the
Consumer Price Index for the month of June next preceding the Term Commencement
Date. [To illustrate the operation of the foregoing provisions of the paragraph:
In an Employment Agreement as to which the Term Commencement Date was August 1,
2004, the executive's base salary for the Contract Year August 1, 2005 through
July 31, 2006 would be not less that the Original Base Salary under that
Employment Agreement adjusted by the percentage increase (or decrease) of the
Consumer price Index for June 2005 over (or below) said Index for June 2004].
Further adjustment in the Minimum Base Salary shall be made for each ensuing
Contract Year, in each case (i) using the Consumer Price Index for the month of
June next preceding the Term Commencement Date as the base except as provided in
the immediately following paragraph hereof and (ii) applying the percentage
increase (or decrease) in the Consumer Price Index since said base month to the
Original Base Salary to determine the Minimum Base Salary. The Base Salary shall
be paid in such periodic installments as the Company may determine but not less
often than monthly.
If with respect to any Contract Year (including the Contract Year
beginning on the first day of August next following the Term Commencement Date)
the Chief Executive Officer fixes the Base Salary at an amount higher than the
Minimum Base Salary, then (unless the order fixing such higher Base Salary
provides otherwise), for the purpose of determining the Minimum Base Salary for
subsequent Contract Years: (i) the amount of the higher Base Salary so fixed
shall be deemed substituted for the Original Base Salary wherever the Original
Base Salary is referred to in the immediately preceding paragraph hereof, and
(ii) the base month for determining the Consumer Price Index adjustment shall be
June of the calendar year in which the Contract Year to which such higher Base
Salary is applicable begins. [To illustrate the operation of the foregoing
provisions of this paragraph: If the Chief Executive Officer were to fix a Base
Salary for a Contract Year beginning, say, August 1, 2006 which is higher than
the Minimum Base Salary for the Contract Year, then June 2006 would become the
base month for the purpose of making the Consumer Price Index adjustment to
determine the Minimum Base Salary for subsequent Contract Years unless and until
the Chief Executive Officer were to fix a Base Salary higher than the Minimum
Base Salary for a subsequent Contract Year.]
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(b) Bonus Compensation.
(i) Plan Bonus. 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 on the Saturday nearest to the
31st day of the month of July next following the Term Commencement
Date, Executive shall be entitled to receive a Bonus pursuant to this
Agreement in an amount determined in accordance with, and subject to
all of the terms of, the Pall Corporation Executive Incentive Bonus
Plan adopted by the Compensation Committee of the Board of Directors of
the Company on October 16, 2003, approved by shareholders at the annual
meeting of shareholders on November 19, 2003, effective for the Fiscal
Year beginning August 3, 2003, a copy of which is annexed hereto and
incorporated herein by reference (the "Bonus Plan"). Words and terms
used herein with initial capital letters and not defined herein are
used herein as defined in the Bonus Plan. For purposes of determining
the amount of the Bonus payable to Executive for any Fiscal Year under
the Bonus Plan (the "Plan Bonus"), Executive's Target Bonus Percentage
shall be 42% of his Base Salary for such Fiscal Year.
(ii) Business Segment Bonus. Inasmuch as Executive's services
for the company relate primarily to the operations of a subsidiary, a
division or other segment of the overall operations of the Company and
its subsidiaries (a "Business Segment"), Executive shall be considered
for additional bonus compensation for each fiscal year based on the
results of operations of such Business Segment for such fiscal year.
The amount of such additional bonus compensation, if any, shall be
determined by the Chief Executive Officer in his sole discretion but in
no event shall such additional bonus compensation exceed 63% of
Executive's Base Salary.
(iii) Payment of Bonus Compensation. Executive's Bonus
Compensation (which term as used herein includes both the Plan Bonus
and the Business Segment Bonus, if any) shall be paid in accordance
with ss.5 of the Bonus Plan. With respect to any Fiscal Year which
falls in part but not in whole within the Term of Employment, the pro
rata portion of the Bonus Compensation to which Executive is entitled
under this ss.3(b) shall be determined in accordance with ss.3(c) of
the Bonus Plan.
(c) Fringe Benefits and Perquisites. During the Term of Employment,
Executive shall enjoy the customary perquisites of office, including, but not
limited to, office space and furnishings, secretarial services, expense
reimbursements and any similar emoluments customarily afforded to senior
executive officers of the Company at the same level as Executive. Executive
shall also be entitled to receive or participate in all "fringe benefits" and
employee benefit plans provided or made available by the Company to its
executives or management personnel generally (such as, but not limited to, group
hospitalization, medical, life and disability insurance, and pension,
retirement, profit-sharing and stock option or purchase plans), at such time and
on such terms and conditions as each such plan provides.
(d) Vacations. Executive shall be entitled each year to a vacation or
vacations in accordance with the policies of the Company as determined by the
Board or by an authorized senior officer of the Company from time to time. The
Company shall not pay Executive any additional compensation for any vacation
time not used by executive.
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SS 4. TERMINATION BY REASON OF DISABILITY, DEATH, RETIREMENT OR CHANGE IN
CONTROL
(a) Disability or Death. If, during the Term of Employment, Executive,
by reason of physical or mental disability, is incapable of performing his
principal duties hereunder for an aggregate of 130 working days out of any
period of twelve consecutive months, the Company at its option may terminate the
Term of Employment effective immediately by notice to Executive given within 90
days after the end of such twelve-month period. If Executive shall die during
the Term of Employment or if the Company terminates the Term of Employment
pursuant to the immediately preceding sentence by reason of Executive's
disability, the Company shall pay to Executive, or to Executive's legal
representatives, or in accordance with a direction given by Executive to the
Company in writing, the following: (i) Executive's Base Salary to the end of the
month in which such death or termination for disability occurs and Executive's
Bonus Compensation prorated to said last day of the month and (ii) for each
month in the period from the end of the month in which such death or termination
for disability occurs until the earlier of (x) the first anniversary of the date
of death or termination and (y) the date on which the Term of Employment would
have ended but for such death or termination for disability, monthly payments of
(I) an amount equal to 1/12th of one-half of the annual Base Salary in effect
for Executive immediately prior to the date on which Executive's death or
termination for disability occurs plus (II) an amount equal to 1/12th of
one-half of the maximum Bonus Compensation that Executive could receive with
respect to each of such months based on (A) the Target Bonus Percentage
specified in ss.3(b)(i) of this Agreement (as amended to the date on which
Executive's death or disability occurs) and (B) the maximum percentage of Base
Salary specified in ss.3(b)(ii) of this Agreement (as so amended).
(b) Retirement. (i) The Term of Employment shall end automatically,
without action by either party, on Executive's 65th birthday unless, prior to
such birthday, Executive and the Company have agreed in writing that the Term of
Employment shall continue past such 65th birthday. In that event, unless the
parties have agreed otherwise, the Term of Employment shall be automatically
renewed and extended each year, as of Executive's birthday, for an additional
one-year term, unless either party has given a Non-Renewal Notice. A Non-Renewal
Notice shall be effective as of Executive's ensuing birthday only if given not
less than 60 days before such birthday, and shall state that the party giving
such notice elects that this Agreement shall not automatically renew itself
further, with the result that the Term of Employment shall end on Executive's
ensuing birthday. (ii) If the Term of Employment ends pursuant to this paragraph
by reason of a notice given by either party as herein permitted or automatically
at age 65 or any subsequent birthday, the Company shall pay to Executive, or to
another payee specified by Executive to the company in writing, Executive's Base
Salary and Bonus Compensation prorated to the date on which the Term of
Employment ends, (iii) Anything hereinabove to the contrary notwithstanding, if
any provision of this paragraph violates federal or applicable state law
relating to discrimination on account of age, such provision shall be deemed
modified or suspended to the extent necessary to eliminate such violation of
law. If at a later date, by reason of changed circumstances or otherwise, the
enforcement of such provision as set forth herein would no longer constitute a
violation of law, then it shall be enforced in accordance with its terms as set
forth herein.
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(c) Change in Control. In the event of a Change in Control (as defined
in the Bonus Plan), Executive shall have the right to terminate the Term of
Employment, by notice to the Company given at any time after such Change in
Control, effective on the date specified in such notice, which date shall not be
more than (but can be less than) one year after the giving of such notice.
SS 5. COVENANT NOT TO COMPETE
For a period of eighteen months after the end of the Term of Employment
if the Term of Employment is terminated by notice to the Company given by
Executive under ss.1 or ss.4 hereof, or for a period of twelve months after the
end of the Term of Employment if the Term of Employment is terminated by notice
to Executive given by the Company under ss.1 or ss.4 hereof or terminates under
ss.4 by reason of Executive attaining the age of 65, Executive shall not render
services to any corporation, individual or other entity engaged in any activity,
or himself engage directly or indirectly in any activity, which is competitive
to any material extent with the business of the Company or any of its
subsidiaries, provided, however, that if the Company terminates under ss.1
following a Change in Control (as defined in ss.4(c)), the foregoing covenant
not to compete shall not apply.
SS 6. COMPANY'S RIGHT TO INJUNCTIVE RELIEF
Executive acknowledges that his services to the Company are of a unique
character, which gives them a peculiar value to the Company, the loss of which
cannot be reasonably or adequately compensated in damages in an action at law,
and that therefore, in addition to any other remedy which the Company may have
at law or in equity, the company shall be entitled to injunctive relief for a
breach of this agreement by Executive.
SS 7. INVENTIONS AND PATENTS
All inventions, ideas, concepts, processes, discoveries, improvements
and trademarks (hereinafter collectively referred to as intangible rights),
whether patentable or registrable or not, which are conceived, made, invented or
suggested either by Executive alone or by Executive in collaboration with others
during the Term of Employment, and whether or not during regular working hours,
shall be disclosed to the Company and shall be the sole and exclusive property
of the Company. If the Company deems that any of such intangible rights are
patentable or otherwise registrable under any federal, state or foreign law,
Executive, at the expense of the Company, shall execute all documents and do all
things necessary or proper to obtain patents and/or registrations and to vest
the Company with full title thereto.
SS 8. TRADE SECRETS AND CONFIDENTIAL INFORMATION
Executive shall not, either directly or indirectly, except as required
in the course of his employment by the Company, disclose or use at any time,
whether during or subsequent to the Term of Employment, any information of a
proprietary nature owned by the Company, including but not limited to, records,
data, formulae, documents, specifications, inventions, processes, methods and
intangible rights which are acquired by him in the performance of his duties for
the Company and which are of a confidential information or trade-secret nature.
All records, files, drawings, documents, equipment and the like, relating to the
Company's business, which Executive shall prepare, use, construct or observe,
shall be and remain the Company's sole property. Upon the termination of his
employment or at any time prior thereto upon request by the Company, Executive
shall return to the possession of the Company any materials or copies thereof
involving any confidential information or trade secrets and shall not take any
material or copies thereof from the possession of the Company.
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SS 9. MERGERS AND CONSOLIDATIONS; ASSIGNABILITY
In the event that the Company, or any entity resulting from any merger
or consolidation referred to in this ss.9 or which shall be a purchaser or
transferee so referred to, shall at any time be merged or consolidated into or
with any other entity or entities, or in the event that substantially all of the
assets of the Company or any such entity shall be sold or otherwise transferred
to another entity, the provisions of this Agreement shall be binding upon and
shall inure to the benefit of the continuing entity in or the entity resulting
from such merger or consolidation or the entity to which such assets shall be
sold or transferred. Except as provided in the immediately preceding sentence of
this ss.9, this Agreement shall not be assignable by the Company or by any
entity referred to in such immediately preceding sentence. This Agreement shall
not be assignable by Executive, but in the event of his death it shall be
binding upon and inure to the benefit of his legal representatives to the extent
required to the benefit of his legal representatives to the extent required to
effectuate the terms hereof.
SS 10. CAPTIONS
The captions in this Agreement are not part of the provisions hereof,
are merely for the purpose of reference and shall have no force or effect for
any purpose whatsoever, including the construction of the provisions of this
Agreement, and if any caption is inconsistent with any provisions of this
Agreement, said provisions shall govern.
SS 11. CHOICE OF LAW
This Agreement is made in, and shall be governed by and construed in
accordance with the laws of, the State of New York.
SS 12. ENTIRE CONTRACT
This instrument contains the entire agreement of the parties on the
subject matter hereof except that the rights of the Company hereunder shall be
deemed to be in addition to and not in substitution for its rights under the
Company's standard printed form of "Employee's Secrecy and Invention Agreement"
or "Employee Agreement" if heretofore or hereafter entered into between the
parties hereto so that the making of this Agreement shall not be construed as
depriving the Company of any of its rights or remedies under any such Secrecy
and Invention Agreement or Employee Agreement. This Agreement may not be changed
orally, but only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification, extension or discharge is
sought.
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SS.13. NOTICES
All notices given hereunder shall be in writing and shall be sent by
registered or certified mail, overnight courier service such as Federal Express
or UPS Next Day Air or delivered by hand, and, if intended for the Company,
shall be addressed to it (if sent by mail) or delivered to it (if delivered by
hand) at its principal office for the attention of the corporate Secretary of
the Company, or at such other address and for the attention of such other person
of which the Company shall have given notice to Executive in the manner herein
provided, and, if intended for Executive, shall be delivered to him personally
or shall be addressed to him (if sent by mail or overnight courier service) at
his most recent residence address shown in the Company's employment records or
at such other address or to such designee of which Executive shall have given
notice to the Company in the manner herein provided. Each such notice shall be
deemed to be given on the date of mailing thereof or delivery to the overnight
courier service or, if delivered personally, on the date so delivered.
SS 14. TERMINATION OF EXISTING AGREEMENT
With the exception of the letter dated November 24, 2004, signed by
▇▇▇▇▇ ▇▇▇▇ and the Executive, which is annexed hereto, the terms of which letter
remain in full force and effect, and to the extent they provide benefits and
compensation above what is provided in this Agreement will supercede this
Agreement, any employment agreement between the parties hereto which is in
effect on the date hereof is hereby terminated and replaced and superseded by
this Agreement, effective on the Term Commencement Date. All payments, of Base
Salary or otherwise, made by the Company under any such existing agreement with
respect to any period commencing on or after the Term Commencement Date shall be
credited against the corresponding payment obligations of the Company under this
Agreement with respect to such period.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PALL CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
EXECUTIVE
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇
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