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EXHIBIT 10.7
SERVICE AGREEMENT
AN AGREEMENT dated 28 November, 1995 between PALL EUROPE LIMITED of Xxxxxx
Xxxxx, Xxxxxx Xxxxxx, Xxxxxxxxxx XX0 0XX, ("the Company") of the one part and
XXXXX XXXXXX XXXXXX XXXXXXXX of "Martas Plat", St. Patricks Lane, Rake, Liss,
Hampshire, GU33 7HQ ("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,
for two years from the date hereof and thereafter until either party
gives to the other not less than two year's previous written notice
until the Executive reaches age 65 and one year's previous written
notice after age 65 such notice in either case 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 within 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 of 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 alteration 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 arrear by the last day of
each month.
(B) Bonus Compensation. With respect to each fiscal year of Pall
Corporation 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 4(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 4(B).
"Average Equity" means the average of stockholders' equity as
shown on the fiscal year-end consolidated balance sheet of Pall
Corporation 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 August 3, 1996 will be the average of stockholders' equity
as of July 29, 1995 and August 3, 1996) 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
Pall Corporation 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 1996, "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 1996 Pall
Corporation 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 percentage 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 Formula
Bonus Compensation payable to Executive shall be 45% 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 45% 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 1996 is 16.25% (the midpoint between 12.5%
and 20.0%) the Bonus Compensation shall be an amount equal to 22.5% of
Executive's Base Salary (the midpoint between zero percent of Base
Salary and 45% of Base Salary).
(C) The Bonus Compensation shall be paid in instalments as follows:
(1) 50% of the estimated amount thereof in the October following the
end of the fiscal year with respect to which the Bonus
Compensation is payable (e.g., 50% in October 1996 with respect to
Bonus Compensation for the fiscal year ending August 3, 1996),
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 April 30 next following the end
of the fiscal year with respect to which the Bonus Compensation is
payable.
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With respect to any fiscal year of Pall Corporation which falls in
part but not in whole within the Term of Employment, the Bonus
Compensation to which Executive is entitled under 4(B) shall be
pro rated 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.
(D) 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.
(E) 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 over from year to year and
the Executive shall not be entitled to be paid in lieu of untaken
holiday.
(F) 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.
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(G) 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 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 this 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;
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(B) In the event of a Change in Control (as hereinafter defined) of
the Company, the Executive shall have the right to terminate this
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 so to do 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 subsidiaries or associated companies
(other than ceasing to be Executive Vice President and Chief
Operating Officer of Pall Corporation) this Agreement shall not
hereby automatically terminate.
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 any 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.
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7. HEADINGS
THE headings 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 heading is inconsistent with
any provisions of this Agreement, the said provisions shall govern.
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
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(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
(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.
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II. 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 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 ) /s/ Xxxx Xxxxxxxx
was hereunto affixed )
in the presence of: )
SIGNED SEALED AND DELIVERED )
by the said ) /s/ Xxxxx Xxxxxx Xxxxxx Xxxxxxxx
XXXXX XXXXXX XXXXXX XXXXXXXX ) /s/ Xxxxxx Xxxxxx
in the presence of: XXXXXX XXXXXX )
SCHEDULE
Pursuant to Clause 4 (A) the annual salary of the Executive shall be Pound
Sterling 145,600.00
