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Exhibit 10.31
SERVICE AGREEMENT
AN AGREEMENT dated 1 August 1998 between PALL EUROPE LIMITED of Xxxxxx Xxxxx,
Xxxxxx Xxxxxx, Xxxxxxxxxx XX0 0XX, ("the Company") of the one part and MARCUS
XXXXXX XXXXXX of 00, Xxx Xxxx, Xxxxxxxx Xxxxxx, Xxxxxxxxx XX0 0XX ("the
Executive") of the other part
WHEREBY IT IS AGREED as follows:-
1. EMPLOYMENT AND TERM
SUBJECT as hereinafter provided the Company hereby agrees to employ the
Executive, and the Executive hereby agrees to act as an executive employee
of the Company with the duties set forth in Clause 3 hereof, from the date
hereof and thereafter until either party gives to the other not less than
two year's previous written notice such notice to expire at any time.
2. GENERAL
THERE shall be deemed to form part of the terms and conditions of this
Agreement the Terms and Conditions of Employment for Monthly Paid Staff
(as amended from time to time) and the terms of the Company's Technical
Patent and Confidentiality Agreement, copies of which the executive
acknowledges having received PROVIDED ALWAYS that in the event of conflict
between any part of those terms and this Agreement the terms and
conditions of this Agreement shall prevail.
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3. DUTIES
(A) THE Executive agrees that during the continuance of this Agreement
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 its Chairman shall direct except that
the 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 an
officer of the Company.
(B) If the Board of Directors or its Chairman so directs, the Executive
shall without further remuneration serve as an officer of or perform
services for one or more subsidiary or associated company of the
Company provided that the duties of such office are not inconsistent
with the Executive's experience and qualifications and are duties
customarily performed by an officer of the Company. The Executive
hereby agrees that the Company shall be entitled from time to time
to second the Executive to any subsidiary or associated company of
the Company without prejudice to the rights of the Executive
hereunder or the other provisions of this Agreement and the Company
shall be at liberty to appoint other persons to act jointly with the
Executive whether in such secondment or in his normal duties
hereunder.
(C) During the continuance of this Agreement the Executive shall, except
during customary periods of holiday and periods of illness, devote
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 subsidiary and associated companies and to promoting the best
interests of the Company and its subsidiary and associated
companies.
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(D) The Executive shall not during the continuance of his employment
hereunder (except as a representative of the Company or with the
consent in writing of the Board of Directors of the Company) be
directly or indirectly engaged or concerned in the conduct of any
other business nor shall he be directly or indirectly interested in
any such business save through his holding or being interested in
investments (quoted or unquoted) not representing more than five per
cent of the issued investments of any class of any one company.
4. SALARY AND OTHER BENEFITS
(A) THE Company shall pay to the Executive during the continuance of his
employment hereunder a salary at the annual rate set out in the
Schedule hereto (or such rate as may from time to time be agreed or
determined upon and notified by the Company to the Executive). In
the event of any alternation of salary being so agreed or notified
the alteration shall thereafter have effect as if it were
specifically provided for as a term of this Agreement. Such salary
shall be inclusive of any other sums receivable as Director's fees
or other remuneration from the Company or any of its subsidiary or
associated companies. The said salary shall be payable by equal
monthly payments in arrears by the last day of each month.
(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:
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"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 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 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.
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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 35% 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 35% 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 17.5% of Executive's Base Salary (the midpoint
between zero percent of Base Salary and 35% of Base Salary).
The Bonus Compensation shall be paid in instalments as follows:
(i) 50% of the amount thereof in October 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 March 31st 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
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payable with respect to the full fiscal year ending within such
five-day period.
(C) There shall be refunded to the Executive all out-of-pocket expenses
properly incurred by him in the performance of his duties including
expenses of entertainment, subsistence and travelling. The Executive
shall produce to the Company at its request all supporting vouchers
and documents in respect of such expenses.
(D) The Executive shall be entitled without loss of remuneration to such
holiday in each year (in addition to Bank and other public holidays
occurring when not on holiday) as stated in the Terms and Conditions
of Employment for Monthly Paid Staff or as may otherwise be
determined by the Board of Directors to be taken at such time or
times as may be approved by the Board of Directors. No holiday
entitlement may be carried out from year to year and the Executive
shall not be entitled to be paid in lieu of untaken holiday.
(E) The Executive shall be entitled to participate in such benefit
schemes as may be provided by the Company from time to time
including but not limited to medical insurance and life insurance,
and the executive supplementary pension scheme in accordance with
the rules and regulations and announcements applicable to the said
schemes from time to time in force.
(F) The Company shall provide a motor car for the use of the Executive
for the performance of his duties under this Agreement. The motor
car shall have an engine capacity of not less than two litres and be
of such make and model as shall be determined by the Board of
Directors to be consistent with the Executive's office or position.
The Company shall bear the cost of maintaining, insuring, testing
and
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taxing the motor car. The Executive is authorised to use the motor
car for private purposes.
5. TERMINATION
(A) THIS Agreement shall be subject to termination by the Company:-
(i) by not less than six months' notice given at any time while
the Executive is incapacitated by reason of ill health, mental
disability or accident and shall have been so incapacitated
for an aggregate of 130 working days (whether or not
consecutive);
(ii) by summary notice if the Executive shall have committed any
serious breach or have repeated or have continued (after
warning) any material breach of his obligations hereunder or
shall have been guilty of conduct tending to bring himself or
the Company or any of its subsidiary or associated companies
into disrepute or shall have become bankrupt or compounded
with his creditors generally or have been convicted of any
criminal offence involving a custodial sentence;
(iii) at any time after the Executive's 65th birthday (irrespective
of whether the Executive is age 65 when this Agreement is
entered into), by notice to the Executive effective on the
date specified in such notice,
(B) In the event of a Change in Control (as hereinafter defined) of the
Company, the Executive shall have the right to terminate this
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Agreement by giving not less than 3 months' and not more than 24
months' prior written notice to the Company such notice to be given
not more than 24 months following such Change in Control
(C) Upon the termination of this Agreement howsoever arising the
Executive shall at any time or from time to time thereafter upon the
request of the Company, resign without claim for compensation from
Office as a Director of the Company and all offices held by him in
subsidiary and associated companies of the Company and should he
fail to do so the Company is hereby irrevocably authorised to
appoint some person in his name and on his behalf to sign and do any
documents or things necessary or requisite to give effect thereto.
If the Executive shall cease to be an officer of the Company or any
of its subsidiary or associated companies this Agreement shall not
hereby automatically determine.
6. COMPANY'S RIGHTS TO INJUNCTIVE RELIEF
THE 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 the
Executive.
7. HEADINGS
THE headings in this Agreement are not part of the provisions hereof, are
merely for the purposes 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 heading is inconsistent with any provisions of
this Agreement, the said provisions shall govern.
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8. IN this Agreement:-
(i) words and phrases defined for the purposes of Section 736 of the
Companies Xxx 0000 shall bear the same meaning;
(ii) "associated company" means any company which is (a) a company having
an ordinary share capital of which not less than 25 per cent is
owned directly or indirectly by the Company applying the provisions
of Section 838 of the Income and Corporation Taxes Act 1988 in the
determination of ownership or (b) a holding company of the Company
or a subsidiary of any such holding company or (c) a company to
which the Company or any of its subsidiaries renders managerial,
administrative or technical service otherwise than in the ordinary
course of its business;
(iii) "the Board of Directors" means the Board of Directors of the Company
as the same may be constituted from time to time and includes any
duly appointed committee thereof;
(iv) "Change of Control" - a Change in control of the Company shall be
deemed to have occurred if:
(a) the Company or its holding company sells or agrees to sell the
whole or substantially the whole of the undertaking and assets
of the Company; or
(b) the Company or its holding company sells or agrees to sell the
whole or not less than 50% of the equity share capital of the
Company; or
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(c) a member of the Company or its holding company obtains control
of the composition of the Board of Directors of the Company.
For the purpose of this paragraph (c) the composition of the
Company's Board of Directors shall be deemed to be controlled
by a member if (but only if) the member by the exercise of
some power exercisable by it without the consent or
concurrence of any other person can appoint or remove all or a
majority of the Directors of the Company.
9. CHOICE OF LAW
THIS Agreement is made in, and shall be governed by and construed in
accordance with the laws of England.
10. 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 form of Technical Patent and
Confidentiality 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 Technical Patent and Confidentiality Agreement. This Agreement
may not be changed orally, but only by an agreement in writing signed by
the parties hereto.
11. NOTICES
ALL notices given hereunder shall be in writing and shall be sent by
registered post or delivered by hand, and, if intended for the Company,
shall be addressed to it (if sent by post) or delivered to it (if
delivered by hand) at
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its registered 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 the Executive in the manner
herein provided, and, if intended for the Executive, shall be delivered to
him personally or shall be addressed to him (if sent by post) at his most
recent residence address shown in the Company's employment records or at
such other address or to such designee of which the 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 posting thereof or, if
delivered personally, on the date so delivered.
12. TERMINATION OF ANY PRIOR EMPLOYMENT AGREEMENT
THIS Agreement is in substitution for all previous employment agreements
in effect between the Company and Executive on the date hereof which shall
be deemed to have been terminated by mutual consent as from the date of
commencement of this Agreement.
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IN WITNESS WHEREOF the Company has affixed its Common Seal and the Executive has
set his hand and seal the day and year first above written.
THE COMMON SEAL OF )
PALL EUROPE LIMITED )
was hereunto affixed )
in the presence of:- ) /s/ DTD XXXXXXXX
/s/ XX XXXXX
SIGNED SEALED AND DELIVERED )
by the said ) /s/ MARCUS XXXXXX XXXXXX
)
in the presence of: ) /s/ XX XXXXXXX-SURRY
SCHEDULE
Pursuant to Clause 4 (A) the annual salary of the Executive shall be pound
sterling
