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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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P A L L C O R P O R A T I O N
(Exact name of registrant as specified in its charter)
New York 11-1541330
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2200 Northern Boulevard
East Hills, New York 11548
(Address of Principal Executive Offices)
PALL CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
Mary Ann Bartlett, Secretary
Pall Corporation
2200 Northern Boulevard
East Hills, New York 11548
(Name and address of agent for service)
(516) 484-5400
(Telephone number, including area code, of agent for service)
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Copy to:
CARTER, LEDYARD & MILBURN
2 Wall Street
New York, New York 10005-2072
Attention: Heywood Shelley, Esq.
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<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Proposed Proposed Amount of
Title of securities Amount to be maximum offering maximum aggregate registration
to be registered registered price per unit offering price fee
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<S> <C> <C> <C> <C>
Common Stock,
$.10 par value 1,000,000 shs. $24.0313(1) $24,031,300 $6,680.71
Common Share
Purchase Rights 1,000,000 rights -- (2) -- (2) None
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</TABLE>
(1) Calculated pursuant to Rule 457(c) and (h) upon the basis of the average of
the high and low prices ($24.875 and $23.1875) of a share of the Common
Stock as reported for New York Stock Exchange composite transactions on
September 21, 1999.
(2) Included in the offering price of the Common Stock being registered hereby.
Until the Distribution Date, as defined in the Rights Agreement providing
for the Common Share Purchase Rights, such Rights will be transferable only
with the Common Stock and will be evidenced by the certificates evidencing
the Common Stock.
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This Registration Statement shall become effective immediately upon filing
as provided in Rule 462 under the Securities Act of 1933.
2
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Registrant hereby incorporates by reference into this Registration
Statement the following documents filed by it with the Commission (Commission
File No. 1-4311):
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended August 1, 1998;
(b) The Registrant's Quarterly Reports on Form 10-Q for the quarterly
periods ended October 31, 1998, January 30, 1999, and May 1, 1999; and
(c) The descriptions of the Common Stock and the Common Share Purchase
Rights of the Registrant contained in the Amendments No. 1, both dated
April 20, 1999, to the Registrant's Registration Statements on Form 8-A,
both dated September 10, 1992, for the registration of the Common Stock and
the Common Share Purchase Rights pursuant to Section 12(b) of the
Securities Exchange Act of 1934 (the "Exchange Act"), and any updates of
such descriptions contained in any registration statement, report or
amendment thereto of the Registrant hereafter filed under the Exchange Act.
In addition, all documents subsequently filed by the Registrant pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment to this Registration Statement which indicates that all
securities offered hereby have been sold, or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference in and
made a part of this Registration Statement from the date of filing of such
documents.
Item 4. Description of Securities.
Not required, since the Common Stock and the Common Share Purchase Rights
are registered under Section 12 of the Exchange Act.
Item 5. Interests of Named Experts and Counsel.
Carter, Ledyard & Milburn, counsel for the Registrant, has given the
opinion being filed as Exhibit 5 to this Registration Statement as to the
legality of the securities being registered hereby. Heywood Shelley, counsel to
Carter, Ledyard & Milburn, is a director of the Registrant and the owner of
12,000 shares of the Registrant's Common Stock. In addition, Mr. Shelley has
been granted options by the Registrant to purchase an additional 20,000 shares
of Common Stock.
3
<PAGE>
Item 6. Indemnification of Directors and Officers.
Reference is made to Sections 721 through 725 of the Business Corporation
Law of the State of New York, the registrant's jurisdiction of incorporation,
which provides for indemnification of directors and officers under certain
circumstances.
Section 7.02 of the Registrant's Bylaws provides as follows:
"Indemnification. The Corporation shall indemnify any person made or
threatened to be made a party to any action or proceeding, whether civil or
criminal (and whether or not by or in the right of the corporation or of
any other corporation of any type or kind, domestic or foreign, or any
partnership, joint venture, trust, employee benefit plan or other
enterprise), by reason of the fact that such person, his testator or
intestate, is or was a director or officer of the corporation or served any
other corporation of any type or kind, domestic or foreign, or any
partnership, joint venture, trust, employee benefit plan or other
enterprise in any capacity at the request of the corporation, against
judgments, fines, amounts paid in settlement and reasonable expenses,
including attorneys' fees, actually and necessarily incurred as a result of
such action or proceeding, or any appeal therein, provided that (i) no
indemnification may be made to or on behalf of any person if a judgment or
other final adjudication adverse to such person establishes that his acts
were committed in bad faith or were the result of active and deliberate
dishonesty and were material to the cause of action so adjudicated, or that
he personally gained in fact a financial profit or other advantage to which
he was not legally entitled; (ii) no indemnification shall be required in
connection with the settlement of any pending or threatened action or
proceeding, or any other disposition thereof except a final adjudication,
unless the corporation has consented to such settlement or other
disposition, and (iii) the corporation shall not be obligated to indemnify
any person by reason of the adoption of this Section 7.02 if and to the
extent such person is entitled to be indemnified under a policy of
insurance as such policy would apply in the absence of the adoption of this
Section 7.02.
"Reasonable expenses, including attorneys' fees, incurred in defending
any action or proceeding, whether threatened or pending, shall be paid or
reimbursed by the corporation in advance of the final disposition thereof
upon receipt of an undertaking by or on behalf of the person seeking
indemnification to repay such amount to the corporation to the extent, if
any, such person is ultimately found not to be entitled to indemnification.
"Notwithstanding any other provision hereof, no amendment or repeal of
this Section 7.02, or any other corporate action or agreement which
prohibits or otherwise limits the right of any person to indemnification or
advancement or reimbursement of expenses hereunder, shall be effective as
to any person until the 60th day following notice to such person of such
action, and no such amendment or repeal or other corporate action or
4
<PAGE>
agreement shall deprive any person of any right hereunder arising out of
any alleged or actual act or omission occurring prior to such 60th day.
"The corporation is hereby authorized, but shall not be required, to
enter into agreements with any of its directors, officers or employees
providing for rights to indemnification and advancement and reimbursement
of reasonable expenses, including attorneys' fees, to the extent permitted
by law, but the corporation's failure to do so shall not in any manner
affect or limit the rights provided for by this Section 7.02 or otherwise.
"For purposes of this Section 7.02, the term 'the corporation' shall
include any legal successor to the corporation, including any corporation
which acquires all or substantially all of the assets of the corporation in
one or more transactions. For purposes of this Section 7.02, the
corporation shall be deemed to have requested a person to serve an employee
benefit plan where the performance by such person of his duties to the
corporation or any subsidiary thereof also imposes duties on, or otherwise
involves services by, such person to the plan or participants or
beneficiaries of the plan, and excise taxes assessed on a person with
respect to an employee benefit plan pursuant to applicable law shall be
considered fines.
"The rights granted pursuant to or provided by the foregoing
provisions of this Section 7.02 shall be in addition to and shall not be
exclusive of any other rights to indemnification and expenses to which any
such person may otherwise be entitled by law, contract or otherwise."
The Registrant has policies insuring its officers and directors
against certain civil liabilities, including liabilities under the
Securities Act of 1933.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The index to exhibits appears on the page immediately following the
signature pages of this Registration Statement.
5
<PAGE>
Item 9. Undertakings.
(1) The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, unless the information required to be included in
such post-effective amendment is contained in periodic reports filed with
or furnished to the Commission by the Registrant pursuant to Section 13 or
15(d) of the Exchange Act and incorporated herein by reference;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement, unless the information required to be included in
such post-effective amendment is contained in periodic reports filed with
or furnished to the Commission by the Registrant pursuant to Section 13 or
15(d) of the Exchange Act and incorporated herein by reference;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement.
(b) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(d) That, for the purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(2) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described in Item 6 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy
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<PAGE>
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Village of East Hills, State of New York, on the 23rd day of
September, 1999.
PALL CORPORATION
By:/s/Jeremy Hayward-Surry
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Jeremy Hayward-Surry
President
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes Eric Krasnoff,
Jeremy Hayward-Surry and Mary Ann Bartlett, and each of them singly, his true
and lawful attorneys-in-fact with full power to execute in the name of such
person, in the capacities stated below, and to file, such one or more amendments
to this Registration Statement as the Registrant deems appropriate, and
generally to do all such things in the name and on behalf of such person, in the
capacities stated below, to enable the Registrant to comply with the provisions
of the Securities Act of 1933, as amended, and all requirements of the
Securities and Exchange Commission thereunder, and hereby ratifies and confirms
the signature of such person as it may be signed by said attorneys-in-fact, or
any one of them, to any and all amendments to this Registration Statement.
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Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and the above power of attorney have been signed on
September 23, 1999, by the following persons in the capacities indicated.
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Signature Title
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/s/Eric Krasnoff
- ---------------- Chairman and Chief Executive
Eric Krasnoff Officer (Principal Executive
Officer) and Director
/s/John Adamovich
- ------------------ Chief Financial Officer,
John Adamovich Group Vice President and Treasurer
(Principal Financial Officer)
/s/Viraj Patel
- --------------- Chief Corporate Accountant
Viraj Patel (Principal Accounting Officer)
/s/Abraham Appel
- ----------------- Director
Abraham Appel
/s/John H.F. Haskell, Jr.
- -------------------------- Director
John H.F. Haskell, Jr.
/s/Ulric Haynes, Jr.
- --------------------- Director
Ulric Haynes, Jr.
/s/Jeremy Hayward-Surry
- ------------------------ Director
Jeremy Hayward-Surry
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Signature Title
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/s/Edwin W. Martin, Jr.
- ----------------------- Director
Edwin W. Martin, Jr.
/s/Katharine L. Plourde
- ------------------------ Director
Katharine L. Plourde
- -------------------------- Director
Chesterfield F. Seibert
/s/Heywood Shelley
- ------------------- Director
Heywood Shelley
/s/Alan B. Slifka
- ------------------ Director
Alan B. Slifka
/s/James D. Watson
- ------------------- Director
James D. Watson
10
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EXHIBIT INDEX
Exhibit No.
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(4)(a)* Rights Agreement dated as of November 17, 1989,
between the Registrant and United States Trust Company
of New York, as Rights Agent, filed as Exhibit I to
the Registrant's Registration Statement on Form 8-A
(File No. 1-4311) dated September 10, 1992, for the
registration of the Common Share Purchase Rights
pursuant to Section 12(b) of the Securities Exchange
Act of 1934 (the "Form 8-A")
(4)(b)* Amendment No. 1, dated as of April 20, 1999, to the
above listed Rights Agreement, filed as Exhibit II to
Amendment No. 1, dated April 20, 1999, to the Form 8-A
(5) Opinion of Carter, Ledyard & Milburn
(23)(a) Consent of Carter, Ledyard & Milburn
(included in Exhibit 5)
(23)(b) Consent of KPMG LLP
(24) Powers of Attorney (included in the signature page of this
Registration Statement)
(99) Pall Corporation Employee Stock Purchase Plan
__________
* Incorporated herein by reference.
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E X H I B I T 5
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<PAGE>
CARTER, LEDYARD & MILBURN
Counsellors at Law
2 Wall Street
New York, New York 10005
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(212) 732-3200
Fax (212) 732-3232
September 23, 1999
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Pall Corporation
Ladies and Gentlemen:
We have acted as counsel for Pall Corporation, a New York corporation (the
"Corporation"), in connection with the adoption of its Employee Stock Purchase
Plan (the "Plan"). The Plan provides for the offer and sale of up to 1,000,000
shares (the "Shares") of the common stock, $.10 par value per share, of the
Corporation (the "Common Stock") and up to 1,000,000 Common Share Purchase
Rights (the "Rights"). Section 14 of the Plan provides that the Shares may be
purchased in the open market, or may be previously acquired treasury shares,
authorized and unissued shares, or any combination of the foregoing. Each Right
will be issued in connection with the issuance of one of the Shares and, prior
to the Distribution Date (as defined in the Rights Agreement providing for the
Rights), will be transferable with and only with, and will be evidenced by the
certificate evidencing, such Share.
We have examined the originals, or copies certified or otherwise identified
to our satisfaction, of such corporate records and such other documents as we
have deemed relevant as a basis for our opinion hereinafter expressed.
Based on the foregoing, we are of the opinion that up to 1,000,000
authorized but previously unissued Shares and Rights which may be issued by the
Corporation under the Plan, when issued and paid for in accordance with the
terms of the Plan, will be legally issued, and such Shares will be fully-paid
and non-assessable.
<PAGE>
We hereby consent to the filing of this opinion as an exhibit to the
Corporation's Registration Statement on Form S-8 for the Shares and the Rights.
Heywood Shelley, counsel to this Firm, is a director of the Corporation.
Very truly yours,
/s/Carter, Ledyard & Milburn
HS:lrh
2
E X H I B I T 23(b)
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<PAGE>
CONSENT OF INDEPENDENT AUDITORS
Board of Directors
Pall Corporation:
We consent to the incorporation by reference, in the Registration Statement on
Form S-8 of Pall Corporation relating to 1,000,000 shares of its common stock
and 1,000,000 of its common share purchase rights authorized for issuance under
its Employee Stock Purchase Plan adopted June 29, 1999, of our reports dated
September 2, 1998 with respect to the consolidated balance sheets of Pall
Corporation and its subsidiaries as of August 1, 1998, and August 2, 1997, and
the related consolidated statements of earnings, stockholders' equity and cash
flows and related schedule for each of the years in the three-year period ended
August 1, 1998, which reports are incorporated by reference or appear in the
Annual Report on Form 10-K of Pall Corporation for the fiscal year ended August
1, 1998.
/s/KPMG LLP
KPMG LLP
Melville, New York
September 23, 1999
E X H I B I T 99
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PALL CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of the Pall Corporation Employee Stock Purchase Plan
(the "Plan") is to offer certain Employees of Pall Corporation (the "Company")
and Affiliated Companies an incentive to invest in common shares, par value $.10
per share (each, a "Share") of the Company, by permitting eligible Employees to
purchase Shares at below-market prices. The Plan is intended to qualify as an
"employee stock purchase plan" within the meaning of Section 423 of the Internal
Revenue Code of 1986, as amended (the "Code"). The stock purchase plan of the
same name maintained by the Company prior to November 1, 1999 (the "Prior Plan")
is hereby amended and superseded by this Plan. In the event that the Plan is
adopted by any non-U.S. Affiliated Company and is subject to the laws of another
country, a separate document may be prepared for such company reflecting the
specific requirements of applicable law, and such document, and not this
document, shall determine all rights of all Employees of such company.
2. Definitions. Capitalized terms used in this Plan shall have the following
meanings unless defined elsewhere herein.
"Affiliated Company" means, at the time of the granting of an option under the
Plan, any corporation of which not less than 80% of the voting shares are held
by the Company or a subsidiary within the meaning of Section 424 of the Code
(except that 80% stock ownership shall be substituted for 50% stock ownership in
such definition), whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a subsidiary.
"Board of Directors" means the Board of Directors of Pall Corporation.
"Change in Control" means the occurrence of any of the following:
(a) the "Distribution Date" as defined in Section 3 of the Rights
Agreement dated as of November 17, 1989 between the Company and United
States Trust Company of New York, as Rights Agent as the same may have
been amended or extended to the time in question or in any successor
agreement (the "Rights Agreement"); or
(b) any event described in Section 11(a)(ii)(B) of the Rights Agreement;
or
(c) any event described in Section 13 of the Rights Agreement; or
(d) the date on which the number of duly elected and qualified directors
of the Company who were not either elected by the Board of Directors
or nominated by the Board of Directors or its Nominating Committee for
election by the shareholders shall equal or exceed one-third of the
total number of directors of the Company as fixed by its by-laws;
<PAGE>
provided, however, that no Change in Control shall be deemed to have occurred,
and no rights arising upon a Change in Control as provided in Section 16(c)
shall exist, to the extent that the Board of Directors so determines by
resolution adopted prior to the Change in Control. Any such resolution may be
rescinded or countermanded by the Board of Directors at any time with or without
retroactive effect.
"Committee" means the group of individuals appointed by the Board of Directors
of the Company to administer the Plan.
"Compensation" means, for any pay period, the gross base salary payable for such
period. Compensation shall not include overtime, incentive compensation,
incentive payments or bonuses, shift differentials, expense reimbursements,
long-term disability and workers' compensation payments, lump-sum payments due
to death, termination of employment or layoff, non-taxable fringe benefits,
payments or discounts under any stock purchase or option plan, or any other
extraordinary compensation or other payments to an Employee.
"Employee" means a common law employee of an Employer whose customary employment
is at least twenty (20) hours per week. Any person who is not initially
recognized by an Employer as a common law employee, but who is subsequently
determined to be an Employee by the proper authority, shall be an Employee for
purposes of participation in the Plan after such determination.
"Employer" means the Company and any Affiliated Company that adopts the Plan
with the prior written approval of the Committee.
"Exercise Date" means the last Trading Day of each Offering Period.
"Fair Market Value" means the value of a Share on a given date, determined based
on the mean of the highest and lowest sale prices for a Share on such date, as
reported on the New York Stock Exchange or, if the Shares are not traded on the
New York Stock Exchange on such date, the exchange on which the Shares are
listed ("Exchange"), or if the Exchange is not open for trading on such date, on
the nearest preceding date on which the Exchange is open for trading.
"Participant" means any individual who is eligible to participate in the Plan as
provided in Section 4 and enrolls in the Plan in the manner set forth in Section
5.
"Offering Period" means each six consecutive calendar month period during which
an option to purchase Shares is granted and may be exercised.
"Purchase Price" means an amount equal to 85% of the lower of the Fair Market
Value of a Share on the first Trading Day of an Offering Period or on the
Exercise Date, but in no event less than the par value of a Share.
"Stock Account" means the account established pursuant to Section 8 for a
Participant with such investment service provider as the Committee shall select
in its discretion.
"Trading Day" means any day on which the Exchange is open for trading.
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3. Offering Periods. The Plan shall be implemented by consecutive Offering
Periods, with the first Offering Period commencing on November 1, 1999 and
ending on April 30, 2000, and each subsequent Offering Period thereafter,
continuing until the Plan is terminated in accordance with Sections 17 or 20
hereof.
4. Eligibility.
(a) Eligible Employees. Each Employee of an Employer shall be eligible to
participate in the Plan on the earlier of the November 1st or May 1st coincident
with or next following his or her completion of two (2) consecutive years of
employment with an Employer; provided, however, that each Employee who, as of
August 1, 1999 has completed six (6) consecutive months of employment with an
Employer and each Employee who immediately prior to November 1, 1999 was a
participant in the Prior Plan shall be eligible to participate in the Plan
effective November 1, 1999. Notwithstanding the preceding sentence, no Employee
of any Employer shall be eligible to participate in the Plan if that Employee
(i) is a "highly compensated employee", as defined in Section 414(q) of the
Code, who is eligible to participate in the Management Stock Purchase Plan, or
(ii) has received a hardship distribution from the Pall Corporation
Profit-Sharing Plan within the preceding twelve (12) months.
(b) Leave of Absence. Each Participant shall continue to participate while
he or she is on medical leave, family leave, military leave or any other paid
leave of absence approved by an Employer. Each Participant who is on an unpaid
leave of absence shall have payroll deductions suspended at the commencement of
such leave, but shall participate in the exercise of options under Section 7 to
the extent of amounts credited to his or her account prior to the Participant's
leave of absence. Upon such Participant's return from unpaid leave of absence,
his or her payroll deductions shall automatically begin with the commencement of
the Offering Period next following his or her return.
(c) Termination of Eligibility. If a Participant ceases to be eligible to
participate in the Plan for any reason on or before an Exercise Date, the
Participant's payroll deductions shall cease as of the effective date of such
termination of eligibility, as determined by the Committee. All payroll
deductions credited to the Participant's account as of the effective date of his
or her termination of eligibility, shall be distributed to the Participant as
soon as practicable thereafter.
5. Enrollment and Payroll Deductions.
(a) Enrollment. Any Employee who satisfies the eligibility requirements of
Section 4(a) shall participate by enrolling in the Plan and authorizing payroll
deductions in the manner prescribed by the Committee not later than fifteen (15)
days prior to the commencement of any Offering Period. An eligible Employee who
has elected to enroll in the Plan for an Offering Period and whose payroll
deductions have not ceased during the Offering Period as provided in Section
5(d) shall automatically continue to participate in the Plan in each successive
Offering Period with the same terms applicable.
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<PAGE>
(b) Amount. At the time a Participant enrolls in the Plan, the Participant
shall elect to have payroll deductions made on each pay day during each Offering
Period equal to an amount not to exceed the Compensation which the Participant
received on each such pay day; provided, however, that in the case of the
Offering Period beginning on November 1, 1999, no Participant shall be permitted
to make payroll deductions during the first two months thereof that, in the
aggregate, exceed Four Thousand, Two Hundred Dollars ($4,200). All payroll
deductions shall be withheld in whole units of currency only. All payroll
deductions shall be credited to a bookkeeping account maintained by the Company
for each Participant under the Plan. No interest will be paid on any amounts
credited to any account. A Participant may not make any additional payments into
such account.
(c) Payroll Deductions. Payroll deductions shall commence with the first
practicable payroll period of the Offering Period following the Participant's
enrollment in the Plan and shall end in the last practicable payroll period of
the Offering Period during which the Participant is enrolled in the Plan, or, if
earlier (i) after the Participant notifies the Committee of his or her
suspension of payroll deductions pursuant to Section 5(d), (ii) when the
Participant ceases to participate in the Plan for any of the reasons stated in
Sections 4(b), 4(c) or Section 11, or (iii) the first practicable payroll period
after the Participant receives a hardship distribution from the Pall Corporation
Profit-Sharing Plan.
(d) Adjustments to Payroll Deductions. A Participant may decrease the
amount of payroll deductions or suspend all future payroll deductions during an
Offering Period by notifying the Committee in the manner prescribed by the
Committee. In the event a Participant suspends all payroll deductions, the
Participant shall not be entitled to begin payroll deductions until the
commencement of a subsequent Offering Period. The Committee may, in its
discretion, limit the number of payroll deduction rate changes and prescribe the
effective dates thereof during any Offering Period.
Notwithstanding other provisions of the Plan, to the extent necessary to
comply with Section 6(b), the Company may decrease a Participant's payroll
deductions or suspend same at any time during an Offering Period.
6. Options.
(a) Grant of Option. On the first day of each Offering Period, each
Participant shall be granted an option to purchase, exercisable on each Exercise
Date, that number of Shares determined by dividing the aggregate amount credited
to the Participant's account as of such Exercise Date, by the Purchase Price;
provided however, that such purchase shall be subject to the limitations set
forth in Sections 6(b) and 14.
(b) Limitation on Option Grant. Notwithstanding any other provisions of the
Plan, no Participant shall be granted an option under the Plan if immediately
after the grant, (i) such
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Participant (or any other person whose stock would be attributed to such
Participant pursuant to Section 424(d) of the Code) would own capital stock of
the Company and/or hold outstanding options to purchase any class of capital
stock possessing five percent (5%) or more of the total combined voting power or
value of all classes of the capital stock of the Company or any Affiliated
Company thereof, or (ii) such Participant's rights to purchase capital stock
under all Section 423 employee stock purchase plans of the Company and
Affiliated Companies would accrue at a rate which exceeds Twenty-Five Thousand
Dollars ($25,000) of Fair Market Value of such capital stock (determined at the
time such option is granted) for each calendar year in which such option is
outstanding at any time. In the event that a Participant's account is maintained
in a unit of currency other than U.S. dollars, for purposes of determining
whether the limitation in the preceding sentence is exceeded, the unit of
currency in which such Participant's account is maintained shall be notionally
exchanged for U.S. dollars at a rate equal to the exchange rate of such currency
and U.S. dollars at the close of the first day of the Offering Period.
7. Exercise of Option. As soon as administratively practicable after each
Exercise Date, each Participant's option to purchase Shares under the Plan shall
be exercised automatically, and the maximum number of whole or fractional Shares
subject to such option shall be purchased for the Participant at the Purchase
Price, with the aggregate amount credited to the Participant's account, unless
the Participant has terminated participation as provided in Section 4(c) or
employment as provided in Section 11. In the event that a Participant's account
is maintained in a unit of currency other than U.S. dollars, prior to the
exercise of any option, such currency will be exchanged for U.S. dollars at a
rate equal to the exchange rate of such currency and U.S. dollars at the close
of the Exercise Date as of which such options are exercised.
8. Participant Stock Accounts.
(a) Establishment of Stock Account. A Stock Account shall be maintained for
each Participant. Shares purchased for the Stock Account of each Participant
shall be credited thereto as of the close of business on the Exercise Date. All
brokerage commissions attributable to the exercise of options under the Plan
shall be paid by the Company or an Affiliated Company.
(b) Statement. As soon as practicable following each Offering Period, a
statement of Stock Account shall be sent to each Participant, setting forth the
amount of payroll deductions accumulated during the Offering Period, the
Purchase Price, the number of Shares purchased and the amount of any cash
remaining credited to the Participant's Stock Account.
(c) Participant Shares. Shares purchased for each Participant shall be held
in the Participant's Stock Account. A Participant may request that a certificate
in the Participant's name be issued for all or a portion of the whole Shares
credited to the Participant's Stock Account. A Participant may sell such Shares
at any time thereafter, subject to compliance with any applicable federal or
state securities laws. Each Participant agrees, by enrolling in the Plan, to
notify the Committee of any sale or other disposition of Shares held by the
Participant under the Plan which occurs within eighteen (18) months from the
Exercise Date, indicating the number of such Shares
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disposed of. The Committee shall be entitled to presume that a Participant has
disposed of any Shares for which the Participant has requested a certificate.
All certificates for Shares delivered under the Plan shall be subject to such
stock transfer orders and other restrictions as the Company may deem advisable
under all applicable laws, rules, and regulations, and the Company may cause a
legend or legends to be put on any such certificates to make appropriate
references to such restrictions. In the event that a Participant requests a
withdrawal of all amounts credited to his Stock Account, any fractional Shares
then held in the Participant's Stock Account will be converted to an equivalent
unit of currency and such amount shall be distributed to the Participant in cash
along with the requested Shares.
(d) Voting Rights; Dividends. A Participant shall have all ownership rights
with respect to the Shares credited to the Participant's Stock Account,
including the right to direct the vote of such Shares. Any dividends or
distributions which may be declared thereon by the Board of Directors will be
reinvested in additional Shares for the Participant. Such additional shares
shall be purchased on the open market as soon as practicable after the dividend
payment is received.
9. Taxes. The Company or Affiliated Company may, but shall not be obligated to,
withhold from the Participant's compensation the amount necessary for the
Company or Affiliated Company to meet applicable withholding obligations,
including any withholding required to make available to the Affiliated Company
any tax deductions or benefits attributable to any sale or early disposition of
Shares by the Participant.
10. Hardship Distributions. In the event that during an Offering Period a
Participant experiences a "hardship" as defined in the Pall Corporation
Profit-Sharing Plan, the Participant may file a written request with the
Committee for a refund of all amounts then credited to his account. If the
Committee determines in its discretion that the Participant meets the
requirements of a "hardship," it shall cause the Participant's account to be
paid to the Participant as soon as practicable after such determination, without
regard to whether a distribution is made on account of such hardship from the
Pall Corporation Profit-Sharing Plan.
11. Termination of Plan Participation.
(a) Termination of Participation. A Participant may terminate participation
in the Plan by notifying the Committee thereof in the manner prescribed by the
Committee. Following the effective date of such notice, the Participant's
payroll deductions shall cease with the next practicable payroll period. The
Participant shall participate in the exercise of options under Section 7 to the
extent of amounts credited to his or her account as of the cessation of his or
her payroll deductions.
(b) Renewal of Participation. If a Participant terminates participation in
the Plan, the Participant must re-enroll in the Plan as provided in Section 5(a)
to renew participation.
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(c) Termination of Employment. As soon as practicable following a
Participant's termination of employment for any reason, including retirement, a
Participant shall receive cash equal to the amount credited to the Participant's
account during the Offering Period in which occurs the Participant's
termination.
12. Transfer. A Participant may not assign, transfer, pledge or otherwise
dispose of (other than by will, the laws of descent and distribution or as
provided in Section 13 hereof) any payroll deductions credited to the account of
the Participant or any right to exercise an option or receive Shares under the
Plan. Any such assignment, transfer, pledge or other disposition shall be
without effect. Each option is exercisable during the lifetime of the
Participant only by such Participant.
13. Participant Beneficiaries.
(a) Designation. A Participant may file with the Committee, a written
designation of a beneficiary who is entitled to receive any Shares, accumulated
payroll deductions or other amounts, if any, held for the Participant under the
Plan, in the event of the Participant's death.
(b) Failure of Designation. If a Participant dies without a valid
beneficiary designation on file with the Committee, or if no designated
beneficiary survives the Participant, the following automatic beneficiaries
surviving the Participant shall be entitled to receive any Shares, accumulated
payroll deductions, dividends and other amounts, if any, held for the
Participant: (i) Participant's surviving spouse, or (ii) if the Participant is
not married, the Participant's estate.
14. Shares. The maximum number of Shares which may be purchased by all
Participants under the Plan is 1,000,000, subject to adjustment upon changes in
the capitalization of the Company as set forth in Section 16. Shares purchased
for Participants' Stock Accounts may be purchased in the open market (on an
exchange or in negotiated transactions), may be previously acquired treasury
Shares, authorized and unissued Shares, or any combination of Shares purchased
in the open market, previously acquired treasury Shares or authorized and
unissued Shares. If, on a given Exercise Date, the number of Shares with respect
to which options are to be exercised exceeds the number of Shares then available
under the Plan, the Committee shall make a pro rata allocation of the Shares
remaining available for purchase in as uniform a manner as shall be practicable
and as it shall determine to be equitable.
15. Administration. The Plan shall be administered by the Committee, which shall
have full and exclusive discretionary authority to construe, interpret and apply
the terms of the Plan, to determine eligibility and to adjudicate all disputed
claims filed under the Plan. The Committee may change the frequency of payroll
deductions, limit the frequency or number of changes in the amount of payroll
deductions to be made during an Offering Period, permit payroll withholding in
excess of the amount designated by a Participant in order to adjust for delays
or mistakes in the Company's processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting
and crediting procedures to ensure that amounts applied toward the purchase of
Shares for each Participant properly correspond with the Participant's payroll
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deductions, and establish such other limitations or procedures as the Committee
determines in its sole discretion are advisable and consistent with the Plan.
The Plan is intended to qualify as an "employee stock purchase plan" within
the meaning of Section 423 of the Code. Each Participant shall have the same
rights and privileges as afforded by Section 423 of the Code. Accordingly, the
provisions of the Plan shall be construed so as to extend and limit
participation in a manner consistent with the requirements of that section of
the Code. Every finding, decision and determination made by the Committee shall,
to the fullest extent permitted by law, be final and binding upon all parties.
16. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Change
in Control.
(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of Shares covered by each option under
the Plan which has not yet been exercised and the number of Shares which have
been authorized for issuance under the Plan but not yet placed under option, the
maximum number of Shares each Participant may purchase per Offering Period
(pursuant to Section 6) as well as the Purchase Price, shall be proportionately
adjusted for any increase or decrease in the number of issued Shares resulting
form a stock split, reverse stock split, stock dividend, combination or
reclassification of the Shares, or any other increase or decrease in the number
of Shares effected without receipt of consideration by the Company. Such
adjustment shall be made by the Committee, whose determination in that respect
shall be final, binding and conclusive.
(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, any Offering Period then in progress shall be
shortened by setting a new Exercise Date (the "New Exercise Date"), and any
Offering Period then in progress shall end on the New Exercise Date. The New
Exercise Date shall be established by the Committee, and shall be before the
date of the Company's proposed dissolution or liquidation. The Committee shall
notify each Participant in writing, at least ten (10) business days prior to the
New Exercise Date, that the Exercise Date for the Participant's option has been
changed to the New Exercise Date and that the Participant's option shall be
exercised automatically on the New Exercise Date in accordance with Section 7.
(c) Change in Control. In the event of a Change in Control of the Company,
any Offering Period then in progress shall be shortened by setting a new
Exercise Date (the "Change of Control Exercise Date") and any Offering Period
then in progress shall end on the Change of Control Exercise Date. The Change of
Control Exercise Date shall be established by the Committee and shall be before
the date of the Company's proposed sale or merger. The Committee shall notify
each Participant in writing, at least ten (10) business days prior to the Change
of Control Exercise Date, that the Exercise Date for the Participant's option
has been changed to the Change of Control Exercise Date and that the
Participant's option shall be exercised automatically on the Change of Control
Exercise Date in accordance with Section 7.
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17. Amendment or Termination. The Board of Directors may at any time and for any
reason terminate or amend the Plan, and/or delegate authority for any amendments
to the Committee. Except as provided in Section 16, no such termination or
amendment shall affect options previously granted or adversely affect the rights
of any Participant with respect thereto. Without shareholder consent and without
regard to whether any Participant rights may have been considered to have been
"adversely affected," the Plan may be amended to change the Offering Periods,
increase the Purchase Price or change the maximum amount of payroll deductions
permitted. To the extent necessary to comply with Section 423 of the Code (or
any successor rule or provision or any other applicable law, regulation or stock
exchange rule), the Company shall obtain shareholder approval of any amendment
to the Plan in such a manner and to such a degree as required.
18. Notices. All notices or other communications by a Participant to the Company
under or in connection with the Plan shall be deemed to have been duly given
when received in the form specified by the Committee at the location, or by the
person, designated by the Committee for the receipt thereof.
19. Conditions Upon Issuance of Shares. Shares shall not be issued with respect
to an option unless the exercise of such option and the issuance and delivery of
Shares pursuant thereto shall comply with all applicable provisions of law,
domestic or foreign, including, without limitation, the Securities Act of 1933,
as amended, the Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the Shares may then be listed.
As a condition to the exercise of an option, the Company may require a
Participant to represent and warrant at the time of any such exercise that the
Shares are being purchased only for investment and without any present intention
to sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required by any of the aforementioned applicable
provisions of law.
20. Term. The Plan shall be effective upon its adoption by the Board of
Directors subject to the approval by the shareholders of the Company which
approval must occur within the 12-month period after the Plan is adopted by the
Board of Directors. It shall continue in effect indefinitely thereafter until
the maximum number of Shares available for sale under the Plan (as provided in
Section 14 hereof) has been purchased, unless terminated pursuant to Section 17
hereof. In the event that the shareholders of the Company do not approve the
Plan, all payroll deductions that have accumulated in Participants' accounts
shall be refunded to Participants as soon as possible following the
shareholder's action.
21. Use of Funds. Payroll deductions credited to a Participant's account shall
remain the general assets of the Company or an Affiliated Company and shall not
be held in trust or required to be segregated in any manner.
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22. No Right to Continued Employment. Nothing in the Plan or in any option shall
confer on any Participant any right to continue in the employ of the Company or
any Affiliated Company.
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