PALL CORP
EX 10.2(A) -- EMPLOYMENT AGREEMENT
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<TYPE>EX-10
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<FILENAME>b312043ex10_2a.txt
<DESCRIPTION>EX 10.2(A) -- EMPLOYMENT AGREEMENT
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                                             [Elected Executive Vice President]
                                                                  Single Bonus

                              EMPLOYMENT AGREEMENT
                              --------------------

                  AGREEMENT made as of January 22, 2001 between PALL
CORPORATION, a New York corporation (the "Company") and Donald B. Stevens
("Executive").

                  WHEREAS, the parties desire to terminate, as of January 21,
2001, any employment agreement between them then in effect, and to enter into a
new employment agreement, on the terms and conditions hereinafter set forth, for
a term beginning January 22, 2001.

                  NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, the parties hereto agree as follows:


ss.1.      Employment and Term

         The Company hereby employs Executive, and Executive hereby agrees to
serve, as an executive employee of the Company with the duties set forth in
ss.2, for a term (hereinafter called the "Term of Employment") beginning January
22, 2001 and ending, unless sooner terminated under ss.4, on the effective date
specified in a notice of termination given by either party to the other except
that such effective date shall not be earlier than the second anniversary of the
date on which such notice is given.

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ss.2.      Duties

(a)      Executive agrees that during the Term of Employment he will hold such
         offices or positions with the Company, and perform such duties and
         assignments relating to the business of the Company, as the Board of
         Directors or the Chief Executive Officer of the Company shall direct
         except that Executive shall not be required to hold any office or
         position or to perform any duties or assignment inconsistent with his
         experience and qualifications or not customarily performed by a
         corporate officer. The Company represents to Executive that the Board
         of Directors (acting by its Compensation Committee) has authorized the
         making of this Agreement and expressed its present intention that
         during the Term of Employment Executive will be an elected officer of
         the Company. The failure of any future Board of Directors to elect
         Executive as an officer of the Company shall not, however, be deemed to
         relieve either party hereto of any of his or its obligations under this
         Agreement.

(b)      If the Board of Directors or the Chief Executive Officer of the Company
         so directs, Executive shall serve as an officer of one or more
         subsidiaries of the Company (provided that the duties of such office
         are not inconsistent with Executive's experience and qualifications and
         are duties customarily performed by a corporate officer) and part or
         all of the compensation to which Executive is entitled hereunder may be
         paid by such subsidiary or subsidiaries. However, such employment
         and/or payment of Executive by a subsidiary or subsidiaries shall not
         relieve the Company from any of its obligations under this Agreement
         except to the extent of payments actually made to Executive by a
         subsidiary.




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         (c)      During the Term of Employment Executive shall, except during
                  customary vacation periods and periods of illness, devote
                  substantially all of his business time and attention to the
                  performance of his duties hereunder and to the business and
                  affairs of the Company and its subsidiaries and to promoting
                  the best interests of the Company and its subsidiaries and he
                  shall not, either during or outside of such normal business
                  hours, engage in any activity inimical to such best interests.

ss.3.      Compensation During Term of Employment

          (a)     Base Salary. With respect to the period beginning January 22,
                  2001 and ending at the end of the Term of Employment, the
                  Company shall pay to Executive base compensation (in addition
                  to the compensation provided for elsewhere in this Agreement)
                  at such rate as the Board of Directors may determine (the
                  amount so determined by the Board being herein called the
                  "Base Salary") but at not less than the rate of $340,000 per
                  annum (hereinafter called the "Original Base Salary") adjusted
                  for each Contract Year (as hereinafter defined) beginning with
                  the Contract Year which starts August 1, 2001, as follows: The
                  term "Contract Year" as used herein means the period from
                  August 1 of each year through July 31 of the following year.
                  For each Contract Year during the Term of Employment beginning
                  with the Contract Year which starts August 1, 2001, the
                  minimum compensation payable to Executive under thisss.3(a)
                  (hereinafter called the "Minimum Base Salary") shall be
                  determined by increasing (or decreasing) the Original Base
                  Salary by the percentage increase (or decrease) of the
                  Consumer Price Index (as hereinafter defined) for the month of
                  June immediately preceding the start of the Contract Year in
                  question over (or below) the Consumer Price Index for June
                  2000. The term "Consumer Price Index" as herein used means the



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                  "Consumer Price Index for all Urban Consumers" compiled and
                  published by the Bureau of Labor Statistics of the United
                  States Department of Labor for "New York - Northern New Jersey
                  - Long Island, NY-NJ-CT". To illustrate the operation of the
                  foregoing provisions of this ss.3(a): Executive's Base Salary
                  for the Contract Year August 1, 2001 through July 31, 2002
                  shall be not less than the Original Base Salary adjusted by
                  the percentage increase (or decrease) of the Consumer Price
                  Index for June 2001 over (or below) said Index for June 2000.
                  Further adjustment in the Minimum Base Salary shall be made
                  for each ensuing Contract Year, in each case (i) using the
                  Consumer Price Index for June 2000 as the base except as
                  provided in the immediately following paragraph hereof and
                  (ii) applying the percentage increase (or decrease) in the
                  Consumer Price Index since said base month to the Original
                  Base Salary to determine the Minimum Base Salary. The Base
                  Salary shall be paid in such periodic installments as the
                  Company may determine but not less often than monthly.

                           If with respect to any Contract Year (including the
                  Contract Year beginning August 1, 2001) the Board of Directors
                  fixes the Base Salary at an amount higher than the Minimum
                  Base Salary, then (unless the resolution fixing such higher
                  Base Salary provides otherwise), for the purpose of
                  determining the Minimum Base Salary for subsequent Contract
                  Years: (1) the amount of the higher Base Salary so fixed shall
                  be deemed substituted for the Original Base Salary wherever
                  the Original Base Salary is referred to in the immediately
                  preceding paragraph hereof, and (ii) the base month for
                  determining the Consumer Price Index adjustment shall be June
                  of the calendar year in which the Contract Year to which such
                  higher Base Salary is applicable begins (e.g., if the Board
                  fixes a Base Salary for the Contract Year beginning August 1,
                  2001 which is higher than the Minimum Base Salary, then June
                  2001 would become the base month for the purposes of making
                  the CPI adjustment to determine the Minimum Base Salary for
                  subsequent Contract Years).


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          (b)     Bonus Compensation. (i) Formula Bonus Compensation. With
                  respect to each fiscal year of the Company falling in whole or
                  in part within the Term of Employment beginning with the
                  fiscal year in which the Term Commencement Date occurs,
                  Executive shall be entitled to a bonus (in addition to his
                  Base Salary) in such amount and computed in such manner as
                  shall be determined by the Board of Directors but in no event
                  shall the bonus payable to Executive under this ss.3(b) be
                  less than an amount computed by applying to the fiscal year in
                  question the following bonus formula:

                           "Formula Bonus Compensation" means the amount, if
                  any, payable to Executive under this ss.3(b)(i) and "Bonus
                  Compensation" means the total amount payable under ss.3(b)(i)
                  and ss.3(b)(ii).

                           "Average Equity" means the average of stockholders'
                  equity as shown on the fiscal year-end consolidated balance
                  sheet of the Company as of the end of the fiscal year with
                  respect to which Formula Bonus Compensation is being computed
                  hereunder and as of the end of the immediately preceding
                  fiscal year (e.g., "Average Equity" to be used in computing
                  Bonus Compensation for the fiscal year ending July 28, 2001
                  will be the average of stockholders' equity as of July 29,2000
                  and July 28, 2001) except that the amount shown as the "equity
                  adjustment from foreign currency translation" on each such
                  consolidated balance sheet shall be disregarded and the amount
                  of $3,744,000 shall be the equity adjustment (increase) from
                  foreign currency translation used to determine stockholders'
                  equity at each such year-end balance sheet date.

                           "Net Earnings" means the after-tax consolidated net
                  earnings of the Company and its subsidiaries as certified by
                  its independent accountants for inclusion in the annual report
                  to stockholders.

                           "Return on Equity" means Net Earnings as a percentage
                  of Average Equity.



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                           For fiscal year 2001, "Zero Bonus Percentage" shall
                  mean a Return on Equity of 12.5% and "Maximum Bonus
                  Percentage" shall mean a Return on Equity of 18.5%. For fiscal
                  years after fiscal 2001 the Company shall determine the Zero
                  Bonus Percentage and the Maximum Bonus Percentage, consistent
                  in each case with expected results based upon the Company's
                  normal projection procedures, or based on sound statistical or
                  trend data, and the determination by the Company of such
                  percentages shall be conclusive and binding on Executive.

                           If Return on Equity for the fiscal year in question
                  is the Zero Bonus Percentage or less, no Formula Bonus
                  Compensation shall be payable. If Return on Equity equals or
                  exceeds the Maximum Bonus Percentage, the Formula Bonus
                  Compensation payable to Executive shall be 70% of his Base
                  Salary. If Return on Equity is more than the Zero Bonus
                  Percentage and less than the Maximum Bonus Percentage, the
                  Formula Bonus Compensation shall be increased from zero
                  percent of Base Salary towards 70% 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 2001 is 15.5% (the midpoint
                  between 12.5% and 18.5%) the Formula Bonus Compensation shall
                  be an amount equal to 35% of Executive's Base Salary (the
                  midpoint between zero percent of Base Salary and 70% of Base
                  Salary).

             (ii)   This paragraph intentionally left blank.

             (iii)  Payment of Bonus Compensation. The Bonus Compensation shall
                    be paid in installments as follows:

                    (iv)   50% of the estimated amount thereof in August next
                           following the end of the fiscal year with respect to
                           which the Bonus Compensation is payable, and

                    (v)    the balance thereof not later than January 15th next
                           following the end of the fiscal year with respect to
                           which the Bonus Compensation is payable.


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                           With respect to any fiscal year of the Company which
                  falls in part but not in whole within the Term of Employment,
                  the Bonus Compensation to which Executive is entitled under
                  this ss.3(b) shall be prorated on the basis of the number of
                  days of such fiscal year falling within the Term of Employment
                  except that if the Term of Employment ends within five days
                  before or after the end of a fiscal year, there shall be no
                  proration and the Bonus Compensation shall be payable with
                  respect to the full fiscal year ending within such five-day
                  period.

          (c)     Fringe Benefits and Perquisites. During the Term of
                  Employment, Executive shall enjoy the customary perquisites of
                  office, including but not limited to office space and
                  furnishings, secretarial services, expense reimbursements, and
                  any similar emoluments customarily afforded to senior
                  executive officers of the Company at the same level as
                  Executive. Executive shall also be entitled to receive or
                  participate in all "fringe benefits" and employee benefit
                  plans provided or made available by the Company to its
                  executives or management personnel generally, such as, but not
                  limited to, group hospitalization, medical, life and
                  disability insurance, and pension, retirement, profit-sharing
                  and stock option or purchase plans.

          (d)     Vacations. Executive shall be entitled each year to a vacation
                  or vacations in accordance with the policies of the Company as
                  determined by the Board or by an authorized senior officer of
                  the Company from time to time. The Company shall not pay
                  Executive any additional compensation for any vacation time
                  not used by Executive.


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ss.4.     Termination by Reason of Disability, Death, Retirement or Change of
          Control

          (a)     Disability or Death. If, during the Term of Employment,
                  Executive, by reason of physical or mental disability, is
                  incapable of performing his principal duties hereunder for an
                  aggregate of 130 working days out of any period of twelve
                  consecutive months, the Company at its option may terminate
                  the Term of Employment effective immediately by notice to
                  Executive given within 90 days after the end of such
                  twelve-month period. If Executive shall die during the Term of
                  Employment or if the Company terminates the Term of Employment
                  pursuant to the immediately preceding sentence by reason of
                  Executive's disability, the Company shall pay to Executive, or
                  to Executive's legal representatives, or in accordance with a
                  direction given by Executive to the Company in writing, the
                  following: (i) Executive's Base Salary to the end of the month
                  in which such death or termination for disability occurs and
                  Executive's Bonus Compensation prorated to said last day of
                  the month and (ii) for the period from the end of the month in
                  which such death or termination for disability occurs until
                  the earlier of (x) the first anniversary of the date of death
                  or termination and (y) the date on which the Term of
                  Employment would have ended but for such death or termination
                  for disability, monthly payments at one-half of the rate of
                  Executive's Base Salary plus one-half of Executive's Bonus
                  Compensation (prorated to the last day of such period) which
                  would have been payable with respect to such period but for
                  such death or termination.

          (b)     Retirement. (i) The Term of Employment shall end
                  automatically, without action by either party, on Executive's
                  65th birthday unless, prior to such birthday, Executive and
                  the Company have agreed in writing that the Term of Employment
                  shall continue past such 65th birthday. In that event, unless
                  the parties have agreed otherwise, the Term of Employment
                  shall be automatically renewed and extended each year, as of
                  Executive's birthday, for an additional one-year term, unless
                  either party has given a Non-Renewal Notice. A Non-Renewal
                  Notice shall be effective as of Executive's ensuing birthday

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                  only if given not less than 60 days before such birthday, and
                  shall state that the party giving such notice elects that this
                  Agreement shall not automatically renew itself further, with
                  the result that the Term of Employment shall end on
                  Executive's ensuing birthday. (ii) If the Term of Employment
                  ends pursuant to this paragraph by reason of a notice given by
                  either party as herein permitted or automatically at age 65 or
                  any subsequent birthday, the Company shall pay to Executive,
                  or to another payee specified by Executive to the Company in
                  writing, Executive's Base Salary and Bonus Compensation
                  prorated to the date on which the Term of Employment ends.
                  (iii) Anything hereinabove to the contrary notwithstanding, if
                  any provision of this paragraph violates federal or applicable
                  state law relating to discrimination on account of age, such
                  provision shall be deemed modified or suspended to the extent
                  necessary to eliminate such violation of law. If at a later
                  date, by reason of changed circumstances or otherwise, the
                  enforcement of such provision as set forth herein would no
                  longer constitute a violation of law, then it shall be
                  enforced in accordance with its terms as set forth herein.


          (c)     Change of Control. In event of a Change of Control (as
                  hereinafter defined), Executive shall have the right to
                  terminate the Term of Employment, by notice to the Company
                  given at any time after such Change of Control, effective on
                  the date specified in such notice, which date shall not be
                  more than (but can be less than) one year after the giving of
                  such notice. A Change of Control shall be deemed to have
                  occurred at such time as a majority of the directors then in
                  office are not Continuing Directors as defined in subparagraph
                  (C)(6) of Article 12 of the Company's Restated Certificate of
                  Incorporation dated November 23, 1993 and filed by the New
                  York Department of State on December 7, 1993.



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ss.5.    Covenant Not to Compete

         For a period of eighteen months after the end of the Term of Employment
if the Term of Employment is terminated by notice to the Company given by
Executive under ss.1 or ss.4 hereof, or for a period of twelve months after the
end of the Term of Employment if the Term of Employment is terminated by notice
to Executive given by the Company under ss.1 or ss.4 hereof or terminates under
ss.4 by reason of Executive attaining the age of 65, Executive shall not render
services to any corporation, individual or other entity engaged in any activity,
or himself engage directly or indirectly in any activity, which is competitive
to any material extent with the business of the Company or any of its
subsidiaries, provided, however, that if the Company terminates under ss.1
following a Change of Control (as defined in ss.4(c)), the foregoing covenant
not to compete shall not apply.

ss.6.    Company's Right to Injunctive Relief

         Executive acknowledges that his services to the Company are of a unique
character, which gives them a peculiar value to the Company, the loss of which
cannot be reasonably or adequately compensated in damages in an action at law,
and that therefore, in addition to any other remedy which the Company may have
at law or in equity, the Company shall be entitled to injunctive relief for a
breach of this Agreement by Executive.

ss.7.    Inventions and Patents

         All inventions, ideas, concepts, processes, discoveries, improvements
and trademarks (hereinafter collectively referred to as intangible rights),
whether patentable or registrable or not, which are conceived, made, invented or
suggested either by Executive alone or by Executive in collaboration with others
during the Term of Employment, and whether or not during regular working hours,
shall be disclosed to the Company and shall be the sole and exclusive property
of the Company. If the Company deems that any of such intangible rights are
patentable or otherwise registrable under any federal, state or foreign law,
Executive, at the expense of the Company, shall execute all documents and do all
things necessary or proper to obtain patents and/or registrations and to vest
the Company with full title thereto.


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ss.8.    Trade Secrets and Confidential Information

         Executive shall not, either directly or indirectly, except as required
in the course of his employment by the Company, disclose or use at any time,
whether during or subsequent to the Term of Employment, any information of a
proprietary nature owned by the Company, including but not limited to, records,
data, formulae, documents, specifications, inventions, processes, methods and
intangible rights which are acquired by him in the performance of his duties for
the Company and which are of a confidential information or trade-secret nature.
All records, files, drawings, documents, equipment and the like, relating to the
Company's business, which Executive shall prepare, use, construct or observe,
shall be and remain the Company's sole property. Upon the termination of his
employment or at any time prior thereto upon request by the Company, Executive
shall return to the possession of the Company any materials or copies thereof
involving any confidential information or trade secrets and shall not take any
material or copies thereof from the possession of the Company.

ss.9.    Mergers and Consolidations; Assignability

         In the event that the Company, or any entity resulting from any merger
or consolidation referred to in this ss.9 or which shall be a purchaser or
transferee so referred to, shall at any time be merged or consolidated into or
with any other entity or entities, or in the event that substantially all of the
assets of the Company or any such entity shall be sold or otherwise transferred
to another entity, the provisions of this Agreement shall be binding upon and
shall inure to the benefit of the continuing entity in or the entity resulting
from such merger or consolidation or the entity to which such assets shall be
sold or transferred. Except as provided in the immediately preceding sentence of
this ss.9, this Agreement shall not be assignable by the Company or by any
entity referred to in such immediately preceding sentence. This Agreement shall
not be assignable by Executive, but in the event of his death it shall be
binding upon and inure to the benefit of his legal representatives to the extent
required to effectuate the terms hereof.

ss.10.   Captions
         The captions in this Agreement are not part of the provisions hereof,
are merely for the purpose of reference and shall have no force or effect for
any purpose whatsoever, including the construction of the provisions of this
Agreement, and if any caption is inconsistent with any provisions of this
Agreement, said provisions shall govern.


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ss.11.   Choice of Law

         This Agreement is made in, and shall be governed by and construed in
accordance with the laws of, the State of New York.

ss.12.   Entire Contract

         This instrument contains the entire agreement of the parties on the
subject matter hereof except that the rights of the Company hereunder shall be
deemed to be in addition to and not in substitution for its rights under the
Company's standard printed form of "Employee's Secrecy and Invention Agreement"
or "Employee Agreement" if heretofore or hereafter entered into between the
parties hereto so that the making of this Agreement shall not be construed as
depriving the Company of any of its rights or remedies under any such Secrecy
and Invention Agreement or Employee Agreement. This Agreement may not be changed
orally, but only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification, extension or discharge is
sought.

ss.13.   Notices

         All notices given hereunder shall be in writing and shall be sent by
registered or certified mail or delivered by hand, and, if intended for the
Company, shall be addressed to it (if sent by mail) or delivered to it (if
delivered by hand) at its principal office for the attention of the Secretary of
the Company, or at such other address and for the attention of such other person
of which the Company shall have given notice to Executive in the manner herein
provided, and, if intended for Executive, shall be delivered to him personally
or shall be addressed to him (if sent by mail) at his most recent residence
address shown in the Company's employment records or at such other address or to
such designee of which Executive shall have given notice to the Company in the
manner herein provided. Each such notice shall be deemed to be given on the date
of mailing thereof or, if delivered personally, on the date so delivered.


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ss.14.   Termination of Any Prior Employment Agreement

         Any Employment Agreement in effect between the Company and Executive on
the date hereof is hereby terminated by mutual consent effective January 22,
2001 and is superseded and replaced by this Agreement.

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.

                                    PALL CORPORATION

                                    By: /s/ Jeremy Hayward-Surry
                                        ------------------------
                                        Jeremy Hayward-Surry
                                        President


                                    By: /s/ Donald B. Stevens
                                        ------------------------
                                            Donald B. Stevens

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