1
Exhibit 10.26
FIRST AMENDMENT
Amendment Dated August 1, 1998 to Employment Agreement Dated
August 5, 1996
Pall Corporation, a New York Corporation ("The Company") and Xxxx
Xxxx ("Executive") hereby agree that the Employment Agreement between them
dated August 5, 1996 is hereby amended effective August 1, 1998 by
changing Section 3(b) 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, 1999, 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 Section 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 Section 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
2
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, 1999 will be the average of stockholders' equity as of
August 2, 1998 and July 31, 1999) except that the amount shown as the
"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.
"Return on Equity" means Net Earnings as a percentage of Average
Equity.
For fiscal year 1999, "Zero Bonus Percentage" shall mean a Return on
Equity of 12.5% and "Maximum Bonus Percentage" shall mean a Return on
Equity of 17.0%. For fiscal years after fiscal 1999 the Company shall
determine the Zero Bonus Percentage and the Maximum Bonus Percentage,
consistent in
2
3
each case with expected 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 1999 is 14.75% (the midpoint between 12.5% and 17.0%) 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:
3
4
(i) 50% of the amount thereof in August next following the end of the
fiscal year with respect to which the Bonus Compensation is payable,
and
(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 Section 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.
4
5
Except as Expressly amended hereby, said Employment Agreement dated
August 5, 1996 shall remain in full force and effect in accordance with
its terms.
PALL CORPORATION
BY: /s/ XXXXXX XXXXXXX-SURRY
-----------------------------------
XXXXXX XXXXXXX-SURRY
PRESIDENT
EXECUTIVE
/s/ XXXX XXXX
-----------------------------------
XXXX XXXX
5
