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Exhibit 10.30
[ELECTED VICE PRESIDENT]
SPLIT BONUS
EMPLOYMENT AGREEMENT
AGREEMENT made as of August 1, 1998 between PALL CORPORATION, a New
York corporation (the "Company") and Xxxxxxx X. Xxxxx ("Executive").
WHEREAS, the parties desire to terminate, as of July 31, 1998, 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 1, 1998.
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 1, 1998 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 3, 1998 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 $172,000 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, 1999, 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, 1999, 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 1998. 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, 1999 through July 31, 2000 shall be not less than the
Original Base Salary adjusted by the percentage increase (or
decrease) of the Consumer Price Index for June 1999 over (or below)
said Index for June 1998. 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 1998 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, l999) 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, 1999 which is higher than
the Minimum Base Salary, then June 1999 would become the base month
for the purposes of making the CPI adjustment to determine the
Minimum Base Salary for subsequent Contract Years).
(b) Bonus Compensation. (i) 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
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formula:
"Formula Bonus Compensation" means the amount, if any, payable
to Executive under this Section 3(b)(i) and "Bonus Compensation"
means the total amount payable under Section 3(b)(i) and Section
3(b)(ii).
"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 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
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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%. 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.
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 28% 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 28% of Base Salary in the same
proportion that
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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%) the
Formula Bonus Compensation shall be an amount equal to 14% of
Executive's Base Salary (the midpoint between zero percent of Base
Salary and 28% of Base Salary).
(ii) 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 42% of Executive's Base Salary.
(iii) Payment of Bonus Compensation. The Bonus Compensation shall be paid
in installments as follows:
(iv) 50% of the estimated amount thereof in August
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next following the end of the fiscal year with respect to
which the Bonus Compensation is payable, and
(v) 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.
(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.
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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 terminate the Term of Employment effective
immediately by notice to Executive given within 90
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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.
(b) Retirement. (i) The Term of Employment shall end automatically,
without action by either party, on
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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
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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 entitled to injunctive relief for
a breach of this Agreement by Executive.
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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 limited to,
records, data, formulae, documents, specifications, inventions, processes,
methods and intangible
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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 entity to which
such assets shall be sold or transferred. Except as provided in the immediately
preceding sentence of
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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 of the Company hereunder shall be
deemed to be in addition to and not in substitution for its rights under the
Company's
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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 designee of which Executive shall have given notice to the Company in the
manner herein provided. Each such notice
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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 July 31,
1998 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: /s/ XXXXXX XXXXXXX-SURRY
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XXXXXX XXXXXXX-SURRY
PRESIDENT
BY: /s/ XXXXXXX X. XXXXX
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XXXXXXX X. XXXXX
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