PALL CORP, 10-K, 2000-10-26

PALL CORP
10-K, 2000-10-26
GENERAL INDUSTRIAL MACHINERY & EQUIPMENT, NEC

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<PAGE>

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the Fiscal Year Ended July 29, 2000

Commission File Number 1- 4311

PALL CORPORATION
2200 Northern Boulevard, East Hills, N.Y. 11548
(516) 484-5400

Incorporated in New York State I.R.S. Employer Identification
Number 11-1541330

Securities registered pursuant to Section 12(b) of the Act:

Name of Exchange
Title of Class on Which Registered
------------------------- -----------------------------
Common Stock $.10 par value New York Stock Exchange
Common Share Purchase Rights New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that registrant was required
to file such reports), and (2) has been subject to such filing requirement for
the past 90 days.

Yes X No
------- ------

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The aggregate market value of the voting stock held by non-affiliates of the
registrant was $2,466,000,000, based on the closing price on October 6, 2000.

The number of common shares, $.10 par value outstanding of the registrant was
122,477,260 shares on October 6, 2000.

Total number of pages - 72 Exhibit index located on page 18

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the registrant's Proxy Statement for the 2000 annual meeting of
shareholders, previously filed, (hereinafter referred to as the "Proxy
Statement") are incorporated by reference into Part III.

Portions of the registrant's Annual Report to Shareholders for the fiscal year
ended July 29, 2000, filed as Exhibit 13 hereto, (hereinafter referred to as the
"Annual Report to Shareholders") are incorporated by reference into Parts I, II
and IV of this report.

<PAGE>

PART I

ITEM 1. BUSINESS.

(a) General development of business.

Pall Corporation, incorporated in July 1946, and its subsidiaries (hereinafter
collectively called "the Company" unless the context requires otherwise) is a
leading supplier of fine filters, principally made by the Company using its
proprietary filter media, and other fluid clarification and separations
equipment for the removal of solid, liquid and gaseous contaminants from a wide
variety of liquids and gases.

The Company serves customers in two distinct businesses: Health Care and
Industrial. These businesses include the following major markets:
BioPharmaceuticals and Medical (which comprise the Health Care business) and
Aeropower and Fluid Processing (which comprise the Industrial business).

During the past five years, the Company has continued its development and sale
of fluid clarification and separations products in a wide variety of markets.

(b) Financial information about market segment information.

Reference is made to page 39 of the Annual Report to Shareholders.

1) The Company is a specialty materials and engineering company with the
broadest-based filtration, separations and purification capabilities
in the world. Its proprietary products are used to discover, develop
and produce pharmaceuticals, produce safe drinking water, protect
hospital patients, enhance the quality and efficiency of manufacturing
processes, keep equipment running efficiently and to protect the
environment. The Company actively pursues only those applications in
which Pall products can make a substantial difference to the customer.
The products sold are principally filters made with proprietary Pall
filter media produced by chemical film casting, melt-blowing of
polymer fibers, papermaking and metallurgical processes. Metal and
plastic housings for its filters and a wide variety of appurtenant
devices, are also made. Competition is intense in all of the Company's
markets and includes many large and small companies in its global
markets, however no one company has a significant presence in all of
the Company's markets.

(A) Health Care business:

(i) BioPharmaceuticals market:

The BioPharmaceuticals market includes the following sub-markets:
BioPharmaceuticals, Food & Beverage and Specialty Materials. For information
about the BioPharmaceuticals market, reference is made to the section titled
"Health Care: BioPharmaceuticals" on pages 12-13 and 18 of the Annual Report to
Shareholders.

(ii) Medical market:

The Medical market includes the following sub-markets: Blood and Critical Care.
For information about the Medical market, reference is made to the section
titled "Health Care: Medical" on pages 12-13, 16 and 19 of the Annual Report to
Shareholders.

Sales in the BioPharmaceuticals and the Medical markets are made through the
Company's own personnel and through distributors. Backlog information is
omitted, as it is not considered meaningful to an understanding of these
portions of the Company's business.

<PAGE>
3

The Company feels that safety, efficacy, ease of use, technical support, as well
as price, are the principal competitive factors in this business, although
economy of use is important. The Company believes that its principal competitors
in the BioPharmaceutical market include Millipore, Sartorius and CUNO. The
principal competitors in the Medical market are Asahi Medical, Maco Pharma,
Terumo and Fresenius.

(B) Industrial business:

(i) Aeropower market:

The Aeropower market includes the following sub-markets: Industrial Hydraulics
and Aerospace. For information about the Aeropower sub-market, reference is made
to the section titled " Industrial: Aeropower" on pages 12-13 and 15 of the
Annual Report to Shareholders. Backlog at July 29, 2000 was approximately
$78,874,000 and is equal to about three months of sales. The Company's sales to
aerospace and military customers are made principally through its own personnel
and distributors; sales to Industrial Hydraulics customers are made through
Company personnel and through distributors. The Company believes that product
performance and quality, and service to the customer, as well as price, are the
principal competitive factors in this market. The principal competitors in this
market include Donaldson, Parker Hannifin, Hydac, Schroeder, Taisei and ESCO
Technologies Inc.

(ii) Fluid Processing market:

The Fluid Processing market encompasses the following sub-markets: Industrial
Process and Microelectronics. For information about the Fluid Processing market,
reference is made to the section titled "Industrial: Fluid Processing" on pages
12-13 and pages 14 and 17 of the Annual Report to Shareholders. The Company's
products are sold to customers in these sub-markets through its own personnel,
and through distributors and manufacturers' representatives. Backlog information
is omitted, as it is not considered material for an understanding of this part
of the Company's business. The Company believes that performance and quality of
product and service, as well as price, are determinative in most sales. The
principal competitors in this market are US Filter/Vivendi, CUNO, Millipore,
Ronnigen-Petter and Fuji.

(i) Raw materials:

Most raw materials used by the Company are available from multiple sources of
supply. A limited number of materials are proprietary products of major chemical
companies. The Company believes that it could find satisfactory substitutes for
these materials if they should become unavailable, and has in fact done so
several times in the past.

(ii) Patents:

The Company owns a broad range of patents covering its filter media, filter
designs and other products, but it considers these to be mainly defensive, and
relies on its proprietary manufacturing methods and engineering skills. However,
it does act against infringers when it believes such action is economically
justified.

<PAGE>

2) The following comments relate to the Company's business in general:

(a) With limited exceptions, research activities conducted by the Company
are company-sponsored. Such expenditures totaled $51,434,000 in 2000,
$56,490,000 in 1999 and $58,540,000 in 1998.

(b) There was no one customer to whom sales were made totaling 10% or more
of consolidated sales in fiscal 2000, 1999 or 1998.

(c) The Company is in substantial compliance with federal, state and local
laws regulating the discharge of materials into the environment or
otherwise relating to the protection of the environment. To date,
compliance with environmental matters has not had a material effect
upon the Company's capital expenditures or competitive position.

The Company continues the cleanup of contaminated water at its Ann
Arbor, Michigan facility that began in fiscal 1998. On February 2,
2000, the state of Michigan filed a court motion seeking approximately
$4,900,000 in penalties for alleged violations of a consent judgment
entered into between Gelman Sciences Inc., a subsidiary of the
Company, and the state concerning the cleanup.The court took the
matter of penalties "under advisement" and clearly stated its intent
to assure completion of the cleanup program already under way. The
Company's balance sheet at July 29, 2000 reflects $14,600,000 of
accruals related to environmental matters, mainly pertaining to the
Ann Arbor site. In the opinion of management, the Company is in
substantial compliance with applicable environmental laws. Because
regulatory standards under environmental laws are becoming
increasingly stringent, there can be no assurance that future
developments will not cause the Company to incur material
environmental liabilities or costs. For a further description of the
environmental issues see Item 3, Legal Proceedings.

(d) At July 29, 2000, the Company employed approximately 8,800 persons.

(d) Financial information about geographic areas.

Reference is made to page 40 of the Annual Report to Shareholders.

<PAGE>
5

ITEM 2. PROPERTIES.

<TABLE>
<CAPTION>
Location Type Markets Size (square feet)
-------- ---- ------- ------------------
OWNED:
<S> <C> <C> <C>
East Hills, NY Office, plant & Executive Office &
warehouse All markets 326,000
Pt. Washington, NY Office, laboratory All 215,000
& training center
Hauppauge, NY Plant, office Medical & Fluid
& laboratory Processing 75,000
Cortland, NY Plants, office BioPharmaceuticals & Fluid
Processing 338,000
Putnam, CT Plant All 62,000
Ft. Myers, FL Plant, office, warehouse Aeropower, Fluid Processing 111,000
New Port Richey, FL Plant, office Aeropower 175,000
Pensacola, FL Plant BioPharmaceuticals 73,000
Covina, CA Plant, office &
laboratory Medical 176,000
Ann Arbor, MI Plant , office, warehouse Medical, BioPharmaceuticals 180,000
Fajardo, Puerto Rico Plants, warehouse Medical, BioPharmaceuticals
& Fluid Processing 259,000
Portsmouth, U.K. Plant, office, warehouse All 248,000
Ilfracombe, U.K. Plant & office BioPharmaceuticals & Fluid
Processing 112,000
Redruth, U.K. Plant, office, warehouse Aeropower 163,000
Newquay, U.K . Plant & office Medical & Fluid
Processing 106,000
Tipperary, Ireland Plant Medical, Aeropower 178,000
Ascoli, Italy Plant Medical 71,000
Frankfurt, Germany Office & warehouse All 72,000
Paris, France Office & warehouse All 65,000
Limay, France Warehouse All 23,000
Tsukuba, Japan Plant, laboratory &
warehouse All 119,000
Johannesburg, South Africa Office & warehouse All 7,000

LEASED:

Clearwater, FL Office Aeropower 23,000
Cortland, NY Warehouse Fluid Processing 20,000
Northborough, MA Plant & office BioPharmaceuticals 38,000
Exton, PA Office BioPharmaceuticals &
Fluid Processing 13,000
Toronto, Montreal, Canada Office & warehouse BioPharmaceuticals, Medical
& Fluid Processing 18,000
Frankfurt, Hamburg, Germany Office & warehouse All 100,000
Tijuana, Mexico Plant Medical 65,000
Oud Beijerland, Netherlands Plant, office, warehouse Fluid Processing 12,000
Milan, Italy Office & warehouses All 54,000
Vienna, Austria Office & warehouse All 13,000
Basel, Switzerland Office & warehouse All 13,000
Madrid, Spain Office & warehouse All 28,000
Brussels, Belgium Office & warehouse All 12,000
Oslo, Norway Office & warehouse All 6,000
Warsaw, Poland Office & warehouse All 4,000
Buenos Aires, Argentina Office All 3,000
Tokyo, Osaka, Nagoya, Japan Offices All 39,000
Singapore Office & warehouse All 15,000
Seoul, South Korea Office All 2,000
Beijing, China Plant, office, warehouse All 46,000
Melbourne, Sydney
& Perth, Australia Office & warehouse All 36,000
Auckland, New Zealand Office & warehouse All 6,000
</TABLE>

In the opinion of management, these premises are suitable and adequate to meet
the Company's requirements.

<PAGE>
6

ITEM 3. LEGAL PROCEEDINGS.

In February 1988, an action was filed in the Circuit Court for Washtenaw County,
Michigan ("Court") by the State of Michigan ("State") against Gelman Sciences
Inc. ("Gelman")(a subsidiary acquired by the Company in February 1997)
requesting reimbursement of costs the State had expended in investigating
contamination near Gelman's Ann Arbor facility, which the State alleged was
caused by Gelman's disposal of waste water from its manufacturing process.
Pursuant to a consent judgment entered into by Gelman and the State in October
1992 (amended September 1996 and October 1999), which resolved that litigation,
Gelman is remediating the contamination without admitting wrongdoing. In
February 2000, the State Assistant Attorney General filed a Motion to Enforce
Consent Judgement in the Court seeking approximately $4,900,000 in stipulated
penalties for the alleged violations of the consent judgment and additional
injunctive relief. Gelman disputed these assertions and in July 2000, the Court
took the matter of penalties "under advisement" and clearly stated its intent to
assure completion of the cleanup program already under way. Also during the
fourth quarter of 2000, the Company received funds aggregating approximately
$5,000,000 from its insurance carrier as final settlement of its insurance
obligations for the Gelman remediation. These funds were added to the reserve
for environmental matters, principally to cover revised estimates for the future
costs of remediation and ongoing legal expenses. The reserve of nearly
$14,600,000 of accruals reflected in the Company's balance sheet at July 29,
2000 relates mainly to the aforementioned proceedings. In the opinion of
management, the Company is in substantial compliance with applicable
environmental laws and its current accruals for environmental remediation are
adequate.

Reference is also made to Contingencies and Commitments on page 37 of the Annual
Report to Shareholders.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There were no matters submitted to a vote of shareholders during the fourth
quarter of fiscal year 2000.

<PAGE>

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS.

Reference is made to the section titled "Common Stock Prices and Cash Dividends"
on page 41 of the Annual Report to Shareholders.

ITEM 6. SELECTED FINANCIAL DATA.

Reference is made to page 42 of the Annual Report to Shareholders.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

Reference is made to pages 21-24 of the Annual Report to Shareholders.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company is exposed to interest rate risk in connection with its uncommitted
credit lines and senior revolving credit facility. The interest rate with
respect to this facility is based on LIBOR. Changes in these variable interest
rates will have a positive or negative effect on the Company's interest expense.
Reference is made to page 24 (Liquidity and Capital Resources) of the Company's
Annual Report to Shareholders.

In addition, the Company is exposed to market risk resulting from adverse
changes in foreign currency exchange rates. Reference is made to page 38 of the
Annual Report to Shareholders under the caption "Financial Instruments and Risks
and Uncertainties".

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Reference is made to pages 25-41 of the Annual Report to Shareholders.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURES.

None.

<PAGE>

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

(a) Identification of directors:

Reference is made to "Election of Directors" on page 3 of the Proxy
Statement.

None of the persons listed in the section of the Proxy Statement referred
to in the preceding paragraph has been involved in those legal proceedings
required to be disclosed by Item 401(f) of Regulation S-K during the past
five years.

(b) Identification of executive officers:

Year in which
Service as
Age at Officer of
Oct. 16 Pall Corp.
Name 2000 Position Held Began
---- ---- ------------- --------

Eric Krasnoff* 48 Chairman and Chief
Executive Officer 1986
Jeremy Hayward-Surry* 57 President 1989
John Adamovich, Jr. 47 Group Vice President and Treasurer,
Chief Financial Officer 1998
Clifton Hutchings 62 Group Vice President 1993
Paul Kohn 54 Group Vice President 1996
Donald B. Stevens 55 Group Vice President 1996
Marcus Wilson 45 Group Vice President 1998
Samuel T. Wortham 53 Group Vice President 1990
Steven Chisolm 42 Senior Vice President 1998
Charles Grimm 60 Senior Vice President 1998
Heinz Ulrich Hensgen 48 Senior Vice President 2000
Neil MacDonald 50 Senior Vice President 2000
John Miller 55 Senior Vice President 2000
Akio Satake 63 Senior Vice President 1995

* Member of the Executive Committee of the Board of Directors.

None of the persons listed above is related.

Messrs. Krasnoff and Hayward-Surry are directors of Pall Corporation.
For more than the past five years, the principal occupation of each person
listed above has been their employ by the registrant, except for Mr. Adamovich,
who joined the Company in January 1998. Previously, Mr. Adamovich was
partner-in-charge of Professional Practice in the Long Island office of KPMG LLP
and while at that firm, he served as engagement partner for its audits of the
Company's financial statements for each of the years in the seven year period
ending July 29, 1995.

Executive officers are elected by the Board of Directors annually, to serve
until the next annual organizational meeting of the Board.

None of the above persons has been involved in those legal proceedings required
to be disclosed by Item 401(f) of Regulation S-K, during the past five years.

<PAGE>
9

ITEM 11. EXECUTIVE COMPENSATION.

Reference is made to "Compensation and Other Benefits of Senior Management"
beginning on page 6 of the Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

Reference is made to "Beneficial Ownership of Common Stock" beginning on page 23
of the Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Reference is made to "Election of Directors" starting on page 3 of the Proxy
Statement.

Reference is made to "Indebtedness of Officers and Directors under Stock Option
Plans" beginning on page 10 of the Proxy Statement.

Disclosure of information relating to delinquent filers required by Item 405 of
Regulation S-K is set forth on page 24 of the Proxy Statement.

<PAGE>
10

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

a. Documents filed as part of the Form 10-K:

(1) The following financial statements are incorporated by reference to
the indicated pages of the 2000 Annual Report to Shareholders, filed
as Exhibit 13 hereto.

Page Number in
Annual Report
--------------

Independent Auditors' Report 25
Consolidated Statements of Earnings - years ended
July 29, 2000, July 31, 1999 and August 1, 1998 25
Consolidated Balance Sheets - July 29, 2000
and July 31, 1999 26
Consolidated Statements of Stockholders' Equity -
years ended July 29, 2000, July 31, 1999 and August 1, 1998 27
Consolidated Statements of Cash Flows - years ended
July 29, 2000, July 31, 1999 and August 1, 1998 28
Notes to Consolidated Financial Statements 29-41

(2) Financial Statement Schedule

The following schedules are filed herewith: Page Number in
Form 10-K
--------------

Report of Independent Auditors on Financial Statement Schedule 15
Schedule II - Valuation and Qualifying Accounts 16

All other schedules are omitted because they are not applicable or the required
information is shown in the financial statements or in the notes thereto.

<PAGE>

(3) Exhibits filed herewith:

Exhibit
Number Description of Exhibit
--------------------------------------------------------------------------------

3(i)* Restated Certificate of Incorporation of the Registrant as amended
through November 23, 1993, filed as Exhibit 3(i) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended July 30, 1994 (the
"1994 10-K").

3(ii)* By-Laws of the Registrant as amended on October 5, 1999, filed as
Exhibit 3(ii) to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1999 (the "1999 10-K").

4 Note: The exhibits filed herewith do not include the instruments with
respect to long-term debt of the Registrant and its subsidiaries,
inasmuch as the total amount of debt authorized under any such
instrument does not exceed 10% of the total assets of the Registrant
and its subsidiaries on a consolidated basis. The Registrant agrees,
pursuant to Item 601(b) (4) (iii) of Regulation S-K, that it will
furnish a copy of any such instrument to the Securities and Exchange
Commission upon request.

10.1*(a) Amended And Restated Employment Agreement dated October 6, 1997 between
the Registrant and Eric Krasnoff, filed as Exhibit 10.3 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
August 2, 1997 (the "1997 10-K").

10.2*(a) Letter agreement dated July 17, 1997 between the Registrant and Eric
Krasnoff, filed as Exhibit 10.4 to the 1997 10-K.

10.3*(a) Amended And Restated Employment Agreement dated October 6, 1997 between
the Registrant and Jeremy Hayward-Surry, filed as Exhibit 10.5 to the
1997 10-K.

10.4*(a) Service Agreement dated November 28, 1995 between Pall Europe Limited
and Clifton Stanley Hutchings, filed as Exhibit 10.9 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
August 3, 1996 (the "1996 10-K").

10.5*(a) Service Agreement dated November 28, 1995 between Pall Deutschland GmbH
Holding and Gerhard Friedrich Weich, filed as Exhibit 10.10 to the 1996
10-K.

10.6*(a) Employment Agreement dated February 1, 1992 between the Registrant and
Samuel Wortham, filed as Exhibit 10.15 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended August 1, 1992
(the "1992 10-K").

10.7*(a) Amendment dated July 19, 1993 to Employment Agreement dated February 1,
1992 between the Registrant and Samuel Wortham, filed as Exhibit 10.4
to the Registrant's Annual Report on Form 10-K for the fiscal year
ended July 31, 1993 (the "1993 10-K").

10.8*(a) Second Amendment dated August 1, 1995 to Employment Agreement dated
February 1, 1992 between the Registrant and Samuel Wortham, filed as
Exhibit 10.16 to the 1996 10-K.

* Incorporated herein by reference.

(a) Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 14(c) of Form 10-K.

<PAGE>

Exhibit
Number Description of Exhibit
--------------------------------------------------------------------------------

10.9*(a) Third Amendment dated August 1, 1998 to Employment Agreement dated
February 1, 1992 between the Registrant and Samuel Wortham, filed as
Exhibit 10.15 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended August 1, 1998 (the "1998 10-K").

10.10*(a) Employment Agreement dated September 26, 1994 between the Registrant
and Donald B. Stevens, filed as Exhibit 10.17 to the 1994 10-K.

10.11*(a) Amendment dated August 1, 1995 to Employment Agreement dated September
26, 1994 between the Registrant and Donald B. Stevens, filed as
Exhibit 10.24 to the 1996 10-K.

10.12*(a) Second Amendment dated August 1, 1998 to Employment Agreement dated
September 26, 1994 between the Registrant and Donald B. Stevens, filed
as Exhibit 10.24 to the 1998 10-K.

10.13*(a) Employment Agreement dated August 5, 1996 between the Registrant and
Paul Kohn, filed as Exhibit 10.25 to the 1996 10-K.

10.14*(a) First Amendment dated August 1, 1998 to Employment Agreement dated
August 5, 1996 between the Registrant and Paul Kohn, filed as Exhibit
10.26 to the 1998 10-K.

10.15*(a) Employment Agreement made as of January 5, 1998 between the Registrant
and John Adamovich, filed as Exhibit 10 to the Registrant's Quarterly
Report on Form 10-Q for the quarterly period ended November 1, 1997.

10.16*(a) Employment Agreement made as of January 12, 1998 between the
Registrant and Steven Chisolm, filed as Exhibit 10 to the Registrant's
Quarterly Report on Form 10-Q for the quarterly period ended January
31, 1998.

10.17*(a) First Amendment dated August 1, 1998 to Employment Agreement dated
January 12, 1998 between the Registrant and Steven Chisolm, filed as
Exhibit 10.29 to the 1998 10-K.

10.18*(a) Employment Agreement made as of August 1, 1998 between the Registrant
and Charles R. Grimm, filed as Exhibit 10.30 to the 1998 10-K.

10.19*(a) Service Agreement dated August 1, 1998 between Pall Europe Limited and
Marcus Albert Wilson, filed as Exhibit 10.31 to the 1998 10-K.

10.20*(a) Employment Agreement made as of February 1, 1992 between the
Registrant and John Miller, filed as Exhibit 10.1 to the Registrant's
Quarterly Report on Form 10-Q for the quarterly period ended April 29,
2000.

* Incorporated herein by reference.

(a) Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 14(c) of Form 10-K.

<PAGE>

Exhibit
Number Description of Exhibit
--------------------------------------------------------------------------------

10.21*(a) Amendment dated July 19, 1993 to Employment Agreement dated February
1, 1992 between the Registrant and John D. Miller, filed as Exhibit
10.2 to the Registrant's Quarterly Report on Form 10-Q for the
quarterly period ended April 29, 2000.

10.22*(a) Employment Agreement made as of June 7, 2000 between Pall Europe
Limited and Neil MacDonald, filed as Exhibit 10.3 to the Registrant's
Quarterly Report on Form 10-Q for the quarterly period ended April 29,
2000.

10.23*(a) Pall Corporation Supplementary Profit Sharing Plan as amended and
restated February 15, 1995, filed as Exhibit 10.26 to the 1996 10-K.

10.24*(a) Pall Corporation Supplementary Pension Plan (As amended effective
October 6, 1997), filed as Exhibit 10.25 to the 1997 10-K.

10.25*(a) Pall Corporation Profit Sharing Plan, as amended and restated as of
January 1, 1997, filed as Exhibit 10.26 to the 1997 10-K.

10.26*(a) Pall Corporation 1988 Stock Option Plan, as amended through October 8,
1991, filed as Exhibit 10.32 to the Registrant's Annual Report on Form
10-K for the fiscal year ended August 3, 1991 (the "1991 10-K").

10.27*(a) Pall Corporation 1991 Stock Option Plan, as amended effective November
19, 1998, filed as Exhibit 10.1 to the Registrant's Quarterly Report
on Form 10-Q for the quarterly period ended October 31, 1998.

10.28*(a) Pall Corporation 1993 Stock Option Plan, as amended effective November
19, 1998, filed as Exhibit 10.2 to the Registrant's Quarterly Report
on Form 10-Q for the quarterly period ended October 31, 1998.

10.29*(a) Pall Corporation 1995 Employee Stock Option Plan, as amended effective
November 19, 1998, filed as Exhibit 10.3 to the Registrant's Quarterly
Report on Form 10-Q for the quarterly period ended October 31, 1998.

10.30*(a) Pall Corporation 1998 Employee Stock Option Plan, filed as Exhibit 99
to the Registrant's Registration Statement on Form S-8 (Registration
No. 333-68371).

10.31*(a) Pall Corporation Stock Option Plan for Non-Employee Directors, as
amended effective November 19, 1998, filed as Exhibit 10.5 to the
Registrant's Quarterly Report on Form 10-Q for the quarterly period
ended October 31, 1998.

* Incorporated herein by reference.

(a) Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 14(c) of Form 10-K.

<PAGE>

Exhibit
Number Description of Exhibit
--------------------------------------------------------------------------------

10.32*(a) Pall Corporation Management Stock Purchase Plan, as amended on January
19, 2000, filed as Exhibit 10 to the Registrant's Quarterly Report on
Form 10-Q for the quarterly period ended January 29, 2000.

10.33*(a) Principal Rules of the Pall Supplementary Pension Scheme, filed as
Exhibit 10.25 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 29, 1995.

10.34*(a) Pall Deutschland GmbH Holding, Concept Of An Additional Pension Plan
For Senior Executives, filed as Exhibit 10.35 to the 1996 10-K.

13 Annual Report to Shareholders for the year ended July 29, 2000.

21 Subsidiaries of Pall Corporation.

23 Consent of Independent Auditors.

27 Financial Data Schedule.

* Incorporated herein by reference.

(a) Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 14(c) of Form 10-K.

b. Reports on Form 8-K:

The Registrant filed no reports on Form 8-K during its fourth fiscal
quarter ended July 29, 2000.
<PAGE>

KPMG LETTERHEAD

Independent Auditors' Report on Schedule

The Board of Directors
Pall Corporation:

Under date of August 30, 2000, we reported on the consolidated balance sheets of
Pall Corporation and subsidiaries as of July 29, 2000 and July 31, 1999, and the
related consolidated statements of earnings, stockholders' equity and cash flows
for each of the years in the three-year period ended July 29, 2000, as contained
in the Company's fiscal 2000 annual report to stockholders. These consolidated
financial statements and our report thereon are incorporated by reference in the
Company's annual report on Form 10-K for fiscal year 2000. In connection with
our audits of the aforementioned consolidated financial statements, we also have
audited the related financial statement schedule as listed in the accompanying
index. This financial statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion on this financial
statement schedule based on our audits.

In our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.

/s/ KPMG LLP
--------
KPMG LLP

Melville, New York
August 30, 2000

<PAGE>

PALL CORPORATION AND SUBSIDIARIES SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED JULY 29, 2000,
JULY 31, 1999 AND AUGUST 1, 1998

<TABLE>
<CAPTION>
Balance at Charged to Write-off of Balance
Beginning Costs and Uncollectible at End
Description of Year Expenses Accounts of Year
----------- ---------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Year ended July 29, 2000:
Allowance for doubtful
accounts $6,623,000 2,468,000 1,259,000 $7,832,000

Year ended July 31, 1999:
Allowance for doubtful
accounts $5,879,000 1,891,000 1,147,000 $6,623,000

Year ended August 1, 1998:
Allowance for doubtful
accounts $6,602,000 1,915,000 2,638,000 $5,879,000
</TABLE>

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Pall Corporation

October 26, 2000 By: /s/ Jeremy Hayward-Surry
------------------------
Jeremy Hayward-Surry
President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

/s/ Eric Krasnoff Chairman of the Board and October 26, 2000
--------------------------- Chief Executive Officer
Eric Krasnoff

/s/ Jeremy Hayward-Surry President and Director October 26, 2000
---------------------------
Jeremy Hayward-Surry

/s/ John Adamovich, Jr. Chief Financial Officer October 26, 2000
--------------------------- and Treasurer
John Adamovich, Jr.

/s/ Lisa Kobarg Chief Accountant (Chief October 26, 2000
--------------------------- Accounting Officer)
Lisa Kobarg

/s/ Abraham Appel Director October 26, 2000
---------------------------
Abraham Appel

/s/ Daniel J. Carroll, Jr. Director October 26, 2000
---------------------------
Daniel J. Carroll, Jr.

/s/ John H. F. Haskell, Jr. Director October 26, 2000
---------------------------
John H. F. Haskell, Jr.

/s/ Ulric S. Haynes, Jr. Director October 26, 2000
---------------------------
Ulric S. Haynes, Jr.

/s/ Edwin W. Martin Director October 26, 2000
---------------------------
Edwin W. Martin

/s/ Katharine L. Plourde Director October 26, 2000
---------------------------
Katharine L. Plourde

/s/ Chesterfield F. Seibert Director October 26, 2000
---------------------------
Chesterfield F. Seibert

/s/ Heywood Shelley Director October 26, 2000
---------------------------
Heywood Shelley

/s/ Alan B. Slifka Director October 26, 2000
---------------------------
Alan B. Slifka

/s/ James D. Watson Director October 26, 2000
---------------------------
James D. Watson

<PAGE>

EXHIBIT INDEX

Exhibit
Number Description of Exhibit
--------------------------------------------------------------------------------

3(ii)* By-Laws of the Registrant as amended on October 5, 1999, filed as
Exhibit 3(ii) to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1999 (the "1999 10-K").

10.1*(a) Amended And Restated Employment Agreement dated October 6, 1997
between the Registrant and Eric Krasnoff, filed as Exhibit 10.3 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
August 2, 1997 (the "1997 10-K").

10.2*(a) Letter agreement dated July 17, 1997 between the Registrant and Eric
Krasnoff, filed as Exhibit 10.4 to the 1997 10-K.

10.3*(a) Amended And Restated Employment Agreement dated October 6, 1997
between the Registrant and Jeremy Hayward-Surry, filed as Exhibit 10.5
to the 1997 10-K.

10.5*(a) Service Agreement dated November 28, 1995 between Pall Deutschland
GmbH Holding and Gerhard Friedrich Weich, filed as Exhibit 10.10 to
the 1996 10-K.

10.7*(a) Amendment dated July 19, 1993 to Employment Agreement dated February
1, 1992 between the Registrant and Samuel Wortham, filed as Exhibit
10.4 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1993 (the "1993 10-K").