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EXHIBIT 10.25
[Elected Vice President]
EMPLOYMENT AGREEMENT
AGREEMENT made as of August 5, 1996 between PALL CORPORATION, a New
York corporation (the "Company") and Xxxx Xxxx ("Executive").
WHEREAS, the parties desire to terminate, as of August 4, 1996, any
employment agreement between them then in effect, and to enter into a new
employment agreement, on the terms and conditions hereinafter set forth, for a
term beginning August 5, 1996.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, the parties hereto agree as follows:
SECTION 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
Section 2, for a term (hereinafter called the "Term of Employment") beginning
August 5, 1996 and ending, unless sooner terminated under Section 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.
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SECTION 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 Board of Directors or 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 or not customarily performed by a corporate
officer. The Company represents to Executive that the Board of
Directors (acting by its Compensation Committee) has authorized
the making of this Agreement and expressed its present intention
that during the Term of Employment Executive will be an elected
officer of the Company. The failure of any future Board of
Directors to elect Executive as an officer of the Company shall
not, however, be deemed to relieve either party hereto of any of
his or its obligations under this Agreement.
(b) If the Board of Directors or 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
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qualifications and are duties customarily performed by a
corporate officer) 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.
SECTION 3. COMPENSATION DURING TERM OF EMPLOYMENT
(a) Base Salary. With respect to the period beginning August 5, 1996
and ending at the end of the Term of Employment, the Company
shall pay to Executive base compensation (in addition to the
compensation provided for elsewhere in this Agreement) at such
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rate as the Board of Directors may determine (the amount so
determined by the Board being herein called the "Base Salary")
but at not less than the rate of $154,024 per annum (hereinafter
called the "Original Base Salary") adjusted for each Contract
Year (as hereinafter defined) beginning with the Contract Year
which starts August 1, 1997, 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. For each Contract Year
during the Term of Employment beginning with the Contract Year
which starts August 1, 1997, the minimum compensation payable to
Executive under this Section 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 (as hereinafter
defined) for the month of June immediately preceding the start
of the Contract Year in question over (or below) the Consumer
Price Index for June 1996. 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 New Jersey - Long Island,
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NY-NJ-CT". To illustrate the operation of the foregoing
provisions of this Section 3(a): Executive's Base Salary for the
Contract Year August 1, 1997 through July 31, 1998 shall be not
less than the Original Base Salary adjusted by the percentage
increase (or decrease) of the Consumer Price Index for June 1997
over (or below) said Index for June 1996. 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 June
1996 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 August 1, 1996) the Board of Directors fixes the
Base Salary at an amount higher than the Minimum Base Salary,
then (unless the resolution fixing such higher Base Salary
provides otherwise), for the purpose of determining the Minimum
Base Salary for subsequent Contract Years: (1) the amount of the
higher Base
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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 (e.g., if the Board
fixes a Base Salary for the Contract Year beginning August 1,
1997 which is higher than the Minimum Base Salary, then June
1997 would become the base month for the purposes of making the
CPI adjustment to determine the Minimum Base Salary for
subsequent Contract Years) .
(b) Formula 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 in which the Term
Commencement Date occurs, 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:
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"Formula Bonus Compensation" means the amount, if any, payable
to Executive under this Section 3(b) and "Bonus Compensation"
means the total amount payable under Sections 3(b) and
3(c).
"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
Formula 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 August 2, 1997 will be the average of
stockholders' equity as of August 3, 1996 and August 2, 1997)
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
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stockholders.
"Return on Equity" means Net Earnings as a percentage of Average
Equity.
For fiscal year 1997, "Zero Bonus Percentage" shall mean a
Return on Equity of 12.5% and "Maximum Bonus Percentage" shall
mean a Return on Equity of 20.0%. For fiscal years after fiscal
1997 the Company shall determine the Zero Bonus Percentage and
the Maximum Bonus Percentage, consistent in 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 Formula Bonus Compensation shall be
payable. If Return on Equity equals or exceeds the Maximum Bonus
Percentage, the Formula Bonus Compensation payable to Executive
shall be 42% of his Base Salary. If Return on Equity is more
than the Zero Bonus Percentage and less than the Maximum Bonus
Percentage, the Formula Bonus Compensation shall be increased
from zero percent of Base Salary towards 42% of Base Salary in
the same proportion that Return on Equity increases from the
Zero Bonus
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Percentage to the Maximum Bonus Percentage. Thus, for example,
if Return on Equity for fiscal 1997 Is 16.25% (the midpoint
between 12.5% and 20.0%) the Formula Bonus Compensation shall be
an amount equal to 21% of Executive's Base Salary (the midpoint
between zero percent of Base Salary and 42% of Base Salary) .
(c) Business Segment Bonus Compensation. 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
28% of Executive's Base Salary.
(d) 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
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July 1997 with respect to Bonus Compensation for the fiscal
year ending August 2, 1997), based on the then current
projections of Return on Equity and results of operations
of Executive's Business Segment, 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) and Section 3(c) 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 .
(e) 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
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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.
(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.
Section 4. Termination by Reason of Disability, Death, Retirement or Change of
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
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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 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 at one-half of the rate of
Executive's Base Salary plus one-half of Executive's Bonus
Compensation (prorated to the last day of such period) which
would have been payable with respect to such period but for such
death or termination.
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(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)
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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.
(c) Change of Control. In event of a Change of Control (as
hereinafter defined), Executive shall have the right to
terminate the Term of Employment, by notice to the Company given
at any time after such Change of 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. A
Change of Control shall be deemed to have occurred at such time
as a majority of the directors then in office are not Continuing
Directors as defined in subparagraph (C) (6) of Article 12 of
the Company's Restated Certificate of Incorporation dated
November 23, 1993 and filed by the New York Department of State
on December 7, 1993.
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Section 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 Section 1 or Section 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 Section 1 or
Section 4 hereof or terminates under Section 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 Section 1 following a Change of Control (as
defined in Section 4(c)), the foregoing covenant not to compete shall not apply.
Section 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
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entitled to injunctive relief for a breach of this Agreement by Executive.
Section 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.
Section 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
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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.
Section 9. Mergers and Consolidations; Assignability
In the event that the Company, or any entity resulting from any
merger or consolidation referred to in this Section 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
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entity to which such assets shall be sold or transferred. Except as provided in
the immediately preceding sentence of this Section 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 effectuate the terms hereof.
Section 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.
Section 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.
Section 12. Entire contract
This instrument contains the entire agreement of the parties on the
subject matter hereof except that the rights
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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.
Section 13. Notices
All notices given hereunder shall be in writing and shall be sent by
registered or certified mail 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 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) at his most recent residence
address shown in the Company's employment records or at such other address or to
such
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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, if delivered personally, on the date so delivered.
Section 14. Termination of Any Prior Employment Agreement
Any Employment Agreement in effect between the Company and Executive
on the date hereof is hereby terminated by mutual consent effective August 4,
1996 and is superseded and replaced by this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PALL CORPORATION
By:_____________________________________
Xxxxxx Xxxxxxx-Surry
President and
Chief Financial Officer
By:_____________________________________
Xxxx Xxxx
Executive
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