Exhibit 10.1

PALL CORPORATION

SUPPLEMENTARY PENSION PLAN

(As Amended and Restated on August 29, 2005)

 

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PALL CORPORATION

SUPPLEMENTARY PENSION PLAN

          Pall Corporation, a New York corporation (hereinafter called the
“Corporation”), recognizes the contributions to its growth and success which
have been made by certain key officers employed by the Corporation and desires
to retain the services of such individuals and to assure the Corporation of the
continued benefit of their experience and advice. Accordingly, the Corporation
has decided to provide such individuals with deferred compensation payable to or
for their benefit which, together with the other retirement benefits payable to
such individuals from the Corporation and under Title II of the Social Security
Act, will assure such individuals of sufficient funds during retirement.

ARTICLE I

DEFINITIONS

          As used in this Pall Corporation Supplementary Pension Plan
(hereinafter called the “Plan”), the following terms shall have the meanings
described in this Article I:

          Section 1.1 “Affiliated Corporation” means a member of a controlled
group of corporations of which the Corporation is a member. For purposes hereof,
a “controlled group of corporations” means a controlled group of corporations as
defined in section 1563(a) of the Internal Revenue Code, determined without
regard to Section 1563(b)(2)(C).

          Section 1.2 “Board of Directors” means the board of directors of the
Corporation.

          Section 1.3 “Committee” means the Committee appointed and acting for
the time being pursuant to Article VI.

          Section 1.4 “Compensation” means, for any Plan Year, the total of all
salary, incentive compensation and other bonus payments (a) received by the
Member for such Plan Year from all Affiliated Corporations plus (b) amounts
which a Member would have received for such Plan Year from Affiliated
Corporations but for the Member’s election to contribute such amounts to any
employee benefit plan or program (including but not limited to the Pall
Corporation Profit-Sharing Plan, any “cafeteria plan” and the Management Stock
Purchase Plan and Employee Stock Purchase Plan adopted in 1999) pursuant to a
salary reduction or deduction agreement. The term “Compensation” does not
include any fringe benefits such as, but not limited to the provision of an
automobile or cash in lieu thereof, stock options, stock appreciation

 

 

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rights, initial award or matching restricted stock units under the Management
Stock Purchase Plan, or other employer contributions by the Affiliated
Corporations to all or any employee retirement or benefit plans or programs,
including but not limited to the Pall Corporation Profit-Sharing Plan and
Supplementary Profit-Sharing Plan.

          Section 1.5 “Consumer Price Index” means the “Consumer Price Index for
all Urban Consumers for New York – Northern New Jersey – Long Island, NY-NJ-CT”
compiled and published by the Bureau of Labor Statistics of the United States
Department of Labor or any successor index thereto.

          Section 1.6 “Early Retirement Date” means the last day of the month
coinciding with or immediately following the later of (a) the date on which the
Member attains age 60 and (b) the date on which the Member’s pension under the
Plan vests in accordance with Section 2.1.

          Section 1.7 “Effective Date” means August 1, 1978.

          Section 1.8 Except as otherwise provided for specified Members in
Appendix A hereto, “Final Average Compensation” means one-third of the aggregate
of the Member’s Compensation for the three (3) Plan Years in which his
Compensation was highest out of the last five (5) or fewer Plan Years in which
he was a Member. If a person has been a Member for less than three full Plan
Years, Final Average Compensation means the greater of (a) if he was a Member
for only one full Plan Year, then his Compensation for that Plan Year or if he
was a Member for two full Plan Years, then the average of his Compensation for
those two Plan Years and (b) the average of his Compensation for all Plan Years
in which he was a Member. In determining Compensation for a Plan Year for the
purpose of the two preceding sentences, the Member’s Compensation for the entire
Plan Year shall be taken into account even if he was not a Member for the entire
Plan Year.

          Section 1.9 “Former Member” means a person who at the time he ceased
to be a Member was entitled to benefits under Article II or Article III.

          Section 1.10 “Member” means:

       (a) each person who on the Effective Date (i) had a written contract in
effect with the Corporation concerning his performance of services for the
Corporation, (ii) was an officer of the Corporation and (iii) was a member of
the Qualified Pension Plan;

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       (b) each person who on February 10, 1982 or on any subsequent date prior
to January 1, 1997 meets all of the following three conditions: (i) has a
written contract in effect with the Corporation concerning his performance of
services for the Corporation which contract does not provide that membership in
the Plan is waived, (ii) is an officer of the Corporation (either a corporate
officer elected by the Board of Directors or a divisional or non-corporate
officer appointed by the President or the chief executive officer of the
Corporation pursuant to the by-laws), and (iii) is a member of the Qualified
Pension Plan;

           (c) Each person who on January 1, 1997 or on any date thereafter
meets all of the following three conditions: (i) is an officer of the
Corporation residing in the United States (either a corporate officer elected by
the Board of Directors or a divisional or non-corporate officer appointed by the
chief executive officer pursuant to the by-laws), (ii) is a member of the
Qualified Pension Plan; and (iii) has been approved in writing by the chief
executive officer for membership in the Plan; and

           (d) Each other person specified in Appendix B hereto.

          A person who is ineligible to retire under Article III shall cease to
be a Member on the day his employment with the Corporation and all other
Affiliated Corporations terminates. A person shall also cease to be a Member on
the date he retires under Article III or dies.

          Section 1.11 “Normal Retirement Date” means the last day of the month
coinciding with or immediately following the date a Member attains age 65.

          Section 1.12 “Other Retirement Program” means (i) the Qualified
Pension Plan; (ii) the Pall (UK) Pension Fund; (iii) in the case of a person who
becomes a Member or after August 1, 2003, the Pall Supplementary Pension Scheme
and the Pall Executive Pension Scheme; and (iv) in the case of a person who
becomes a Member after July 11, 2000 and who is subsequently transferred to an
Affiliated Corporation outside the United States, any pension or retirement
benefit, plan or program (including government sponsored pension programs)
covering employees of such Affiliated Corporation in which such Member accrues a
vested benefit.

          Section 1.13 “Plan Year” means the twelve consecutive month period
beginning on August 1 and ending on July 31 of the following year.

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          Section 1.14 “Primary Social Security Benefit” means the following:

       (a) in the case of a Member entitled to a pension under Section 3.1 or
Section 3.4, the annual old-age insurance benefit payable to the Member on his
Normal Retirement Date, as computed under the provisions of Title II of the
Social Security Act in effect on his Normal Retirement Date and, in the case of
a person who becomes a Member on or after August 1, 2003, as computed under the
provisions of any similar governmental old-age insurance benefit program of any
country other than the United States (including but not limited to the UK State
Pension Scheme) if and to the extent applicable to such Member;

           (b) in the case of a Member entitled to a pension under Section 2.2
or Section 3.2, the annual old-age insurance benefit payable to the Member on
his Normal Retirement Date, as computed under the provisions of Title II of the
Social Security Act in effect on the date his pension commences under Section
2.2 or Section 3.2 and, in the case of a person who becomes a Member on or after
August 1, 2003, as computed under the provisions of any similar governmental
old-age insurance benefit program of any country other than the United States
(including but not limited to the UK State Pension Scheme) if and to the extent
applicable to such Member; in making such computation in the case of a Member
entitled to a pension under Section 2.2, it will be assumed that the Member will
continue to receive “wages” as defined in Title II of the Social Security Act in
each Plan Year until his Normal Retirement Date in the same amount as the
Compensation he received in the last Plan Year during which he was a Member for
the entire Plan Year; and

           (c) in the case of a Member entitled to a pension under Section 3.3,
the annual disability benefit payable to the Member under the provisions of
Title II of the Social Security Act in effect on the date his pension commences
under Section 3.3 and, in the case of a person who becomes a Member on or after
August 1, 2003, as computed under the provisions of any similar governmental
old-age insurance benefit program of any country other than the United States
(including but not limited to the UK State Pension Scheme) if and to the extent
applicable to such Member.

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          The Committee may adopt rules governing the computation of the Primary
Social Security Benefit which shall be uniformly applicable to all persons
similar situated. The non-receipt by a Former Member of his Primary Social
Security Benefit because of failure to apply for the same, continued employment,
or for any other reason, shall be disregarded.

          Section 1.15 “Qualified Domestic Trust” means a trust described in
section 2056A of the Internal Revenue Code of 1986, as amended.

          Section 1.16 “Qualified Pension Plan” means the plan qualified under
Section 401(a) of the Internal Revenue Code which was originally known as the
Pall Corporation Retirement Plan, subsequently known as the Pall Corporation
Pension Plan and, effective November 1, 1999, became known as the Pall
Corporation Cash Balance Pension Plan.

          Section 1.17 “Total and Permanent Disability” means such disability as
entitles the Member to a Social Security certificate of disability award under
the Federal Social Security Act, as from time to time amended, and the
possession of such a certificate by a Member shall, unless and until it is
revoked, be conclusive evidence of such disability. The Committee may require a
disabled Former Member, from time to time, but not more than once each Plan
Year, to furnish the Committee with evidence satisfactory to the Committee that
such certificate has not been Revoked.

ARTICLE II

VESTING

          Section 2.1 (a) Normal Vesting. Each Member whose services for the
Corporation and all other Affiliated Corporations terminate for any reason
(other than his death) under circumstances in which he is not entitled to
retirement benefits under any of the provisions of Article III shall, subject to
the provisions of Section 4.3, be entitled to a vested pension in the amount,
and payable at such time, as provided in this Article II, provided, however,
that, notwithstanding the foregoing, a person who becomes a Member on or after
February 10, 1982 shall not be entitled to a vested pension under this
Article unless he is an employee of an Affiliated Corporation on either

    (i) his 60th birthday or, if later, the fifth anniversary of his becoming a
Member of the Plan, or

              (ii)   the date on which he has been employed by an Affiliated

 

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        Corporation or Corporations for a period of 25 years.

      In addition, any Member who has held the position of Executive Vice
President of the Corporation at any time after February 10, 1982 shall be
entitled to a vested pension under this Article.

          (b) Upon Change in Control. In addition to the vesting provided for in
Section 2.1(a), upon the occurrence of a Change in Control (as hereinafter in
this paragraph defined) each Member (A) whose services for the Corporation and
all other Affiliated Corporations terminate for any reason (other than his
death) under circumstances in which he is not entitled to retirement benefits
under any of the provisions of Article III and (B) who was a member of the
Operating Committee of the Corporation at any time during the 30-day period
immediately preceding the occurrence of such Change in Control shall, subject to
the provisions of Section 4.3, be entitled to a vested pension in the amount,
and payable at such time, as provided in this Article. A “Change in Control” for
purposes of this Section 2.1(b) shall mean the occurrence of any of the
following:

    (i) the “Distribution Date” as defined in Section 3 of the Rights Agreement
dated as of November 17, 1989 between the Corporation and United States Trust
Company of New York as Rights Agent, as amended by Amendment No. 1 to Rights
Agreement dated April 20, 1999 and as the same may have been further amended or
extended to the time in question or in any successor agreement (the “Rights
Agreement”); or

               (ii) any event described in Section 11(a)(ii)(B) of the Rights
Agreement; or

               (iii) any event described in Section 13 of the Rights Agreement,
or

            (iv) the date on which the number of duly elected and qualified
directors of the Corporation who were not either elected by the Corporation’s
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 Corporation as fixed by its by-laws.

          Section 2.2 Amount and Payment of Vested Pension. The vested pension
shall be a monthly pension commencing on the first day of the month after such
Former Member has attained his Early Retirement Date. The monthly pension under
this Section shall be equal to the

 

 

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amount computed under Section 3.1, without any reduction if the pension of such
Former Member commences prior to his Normal Retirement Date.

          Section 2.3 Death Benefit to Spouse. If a Member dies after becoming
entitled to a vested pension but prior to becoming entitled to retirement
benefits under any of the provisions of Article III, and prior to the
commencement of the payment of his pension under this Article, and if such
Member is survived by a spouse to whom he has been lawfully married for at least
one year prior to his death, then such spouse shall be entitled to receive a
monthly pension for life, commencing on the first day of the month following the
date of the Member’s death or, if later, the date that would have been the
Member’s Early Retirement Date if he had not died. The monthly pension under
this Section shall be equal to fifty percent (50%) of the pension, computed in
accordance with Section 3.1, the Member would have been entitled to receive if
he had retired on the later of his Early Retirement Date or the date of his
death.

          Notwithstanding the foregoing, if a federal estate tax marital
deduction is available for amounts passing to a Member’s spouse only if such
amounts pass in a Qualified Domestic Trust, then the amounts otherwise payable
to such spouse pursuant to this Section 2.3 upon the Member’s death shall not be
paid to such spouse but shall be paid, instead, to a Qualified Domestic Trust,
if the Member has so directed either (x) in a written instrument executed by the
Member and filed with the Committee (and not revoked by him prior to his death)
or (y) in the Member’s last will and testament. Any payments to be made to a
Qualified Domestic Trust pursuant to the preceding sentence shall be made in the
same amounts, and at the same times, as such pay­ments would have been made if
payable directly to the Member’s spouse in the absence of such direction.

 

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ARTICLE III

BENEFITS

          Section 3.1 Normal Retirement Pension. Each Member who retires on his
Normal Retirement Date shall be entitled to receive a monthly pension commencing
on the first day of the month following his Normal Retirement Date. The monthly
pension payable under this Section shall be equal to one-twelfth (1/12) of the
amount determined as follows:

       (a) fifty percent (50%) of the Member’s Final Average Compensation
(seventy percent (70%) as to a Member who on March 16, 1987 held the office of
Executive Vice President of the Corporation), reduced by

           (b) the sum of

                (i) the total annual pension payable to the Member under all
Other Retirement Programs (excluding any portion thereof attributable to
contributions to such Other Retirement Programs by such Member), and

                (ii) the Member’s Primary Social Security Benefit.

For purposes of this Section, the amount of the pension payable to the Member
under any Other Retirement Program shall be deemed to be the amount payable
thereunder to the Member in the form of a single life annuity for the Member’s
life, whether or not the Member receives payment of such pension in such form;
provided, however, that the amount of such pension shall be taken into account
under (b)(i) above only on and after the date on which payment of the Member’s
pension under such Other Retirement Program commences or is paid. For purposes
of the preceding sentence, if a Member elects a lump sum distribution under the
Qualified Pension Plan as amended effective November 1, 1999, the Member’s
pension under the Qualified Pension Plan shall be deemed to have commenced on
the date on which such lump sum distribution is due to be paid by the terms of
the Qualified Pension Plan. In the case of a reduction in a monthly pension by
virtue of clause (b)(i) next above, any foreign currency in which the annual
pension under any Other Retirement Program is payable shall be translated into
U.S. dollars initially at the exchange rate reported by the Wall Street Journal
in its issue published on or nearest to the date on which the monthly pension
under this Plan commences (the “Commencement Date”) and such exchange rate shall
remain in effect until the first anniversary of the Commencement Date. On such
first and each subsequent anniversary of the Commencement Date, the monthly
pension

 

 

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payable hereunder during the preceding 12 months shall be recalculated based on
the rate in the Wall Street Journal in its issue published on or nearest to each
dates on which a monthly pension payment hereunder is payable and the difference
between the amount deducted during the preceding 12 months and the recalculated
amount, if in favor of the Member, shall be paid to him or her (or surviving
spouse if a surviving spouse is the payee) with the next monthly payment or, if
in favor of the Corporation, shall be deducted from the next monthly payment or
payments due to the Member (or surviving spouse) hereunder. On each anniversary
of the Commencement Date, the amount of the reduction in the monthly pension
hereunder pursuant to clause (b)(i) next above shall be recalculated based on
the exchange rate reported by the Wall Street Journal in its issue published on
or nearest to such anniversary and that rate shall be used in determining the
amount of the monthly pension payable hereunder for the ensuing 12 months, until
the next annual recalculation provided for above.

          Section 3.2 Early Retirement Pension. A Member who has attained his
Early Retirement Date may retire on the last day of any month which is not less
than thirty (30) days after he has filed a written request for retirement on
such day with the Committee. In such event, a Member shall be entitled to
receive a monthly pension commencing on the first day of the month after his
retirement. The monthly pension under this Section shall be equal to the amount
computed under Section 3.1, without any reduction because payment commences
prior to his Normal Retirement Date.

          Section 3.3 Disability Retirement Pension. A Member who suffers Total
and Permanent Disability shall retire and shall be entitled to receive a monthly
pension commencing on the first day of the month after such disability has
continued for six months and continuing only during such period during which
such Member suffers Total and Permanent Disability. Notwithstanding the
foregoing, the pension of any Member who ceases to suffer Total and Permanent
Disability after he has attained his Normal Retirement Date shall continue
during his lifetime. The monthly pension under this Section shall be equal to
the amount computed under Section 3.1 without any reduction because payment
commences prior to his Normal Retirement Date.

          Section 3.4 Deferred Retirement Pension. Each Member who retires after
his Normal Retirement Date shall be entitled to receive a monthly pension
commencing on the later

 

 

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of (i) the first day of the month in which his pension under any Other
Retirement Program commences or (ii) the first day of the month after his
retirement. The monthly pension under this Section shall be equal to the greater
of (a) the amount computed under Section 3.1 or (b) the amount computed under
Section 3.1 after first determining “Final Average Compensation” on the basis of
the Plan Year in which the Member’s Normal Retirement Date occurred and the
immediately preceding four Plan Years (the immediately preceding nine Plan Years
in the case of the persons who were Chairman of the Board, Vice Chairman of the
Board and President of the Corporation on March 16, 1987) and then multiplying
the pension amount thus computed by the percentage increase, if any, of the
Consumer Price Index for the month immediately preceding the month in which the
Member’s pension under this Section is to commence over the Consumer Price Index
for the month in which the Member’s Normal Retirement Date occurred.

          Section 3.5 Death Benefit to Spouse. If a Member who is eligible to
retire and thereupon receive a pension under this Article dies prior to the
commencement of payment of his pension and the Member is survived by a spouse to
whom he has been lawfully married for at least one year prior to his death, such
spouse shall be entitled to receive a monthly pension for life, commencing on
the first day of the month following the date of the Member’s death. The monthly
pension under this Section shall be equal to fifty percent (50%) of the pension
the Member would have been entitled to receive under this Article had he retired
on the date of his death under the Plan and all Other Retirement Programs in
which he was a participant.

          Notwithstanding the foregoing, if a federal estate tax marital
deduction is available for amounts passing to a Member’s spouse only if such
amounts pass in a Qualified Domestic Trust, then the amounts otherwise payable
to such spouse pursuant to this Section 3.5 upon the Member’s death shall not be
paid to such spouse but shall be paid, instead, to a Qualified Domestic Trust,
if the Member has so directed either (x) in a written instrument executed by the
Member and filed with the Committee (and not revoked by him prior to his death)
or (y) in the Member’s last will and testament. Any payments to be made to a
qualified Domestic Trust pursuant to the preceding sentence shall be made in the
same amounts, and at the same times, as such payments would have been made if
payable directly to the Member’s spouse in the absence of such direction.

 

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          Section 3.6 Restoration of Former Members to Employment. If any Former
Member who is entitled to a pension under Article II or this Article again
becomes an employee of any Affiliated Corporation, his pension (if any was being
paid) shall cease. Upon his subsequent retirement or other termination of
employment his pension shall (i) recommence (if it was being paid) and (ii) be
recomputed under Article II or Article III taking into consideration his Final
Average Compensation and the total annual pension payable to the Member under
all Other Retirement Programs as the date of such subsequent retirement or other
termination of employment.

          Section 3.7 Delay of Payment to Key Employees. Notwithstanding any
provision in this Article III or in Section 4.1 to the contrary, in the case of
any Member (i) who retires on or at any time after January 1, 2005, (ii) whose
retirement did not occur as a result of having become “disabled” within the
meaning of section 409A(a)(2)(C) of the Internal Revenue Code (the “Code”), and
(iii) who immediately prior to the date on which he or she retires (the Member’s
“Retirement Date”) was a “specified employee” of the Corporation within the
meaning of section 409A(a)(2)((B)(i) of the Code, the payments otherwise
required to be made hereunder to such Member shall be subject to the following
provisions:

       (a) Except as provided in (c) below, no amount otherwise required to be
paid to such Member under any Section of this Article III on or after the
Member’s Retirement Date shall be paid to the Member before the date ( the
Member’s Delayed Payment Date”) which is six months after his or her Retirement
Date. On the Member’s Delayed Payment Date, there shall be paid to the Member,
in a single cash lump sum, an amount equal to the aggregate amount of the
monthly pension payments he or she would have received by such date in the
absence of the provisions of the preceding sentence (the Member’s “Delayed
Pension Payments”), plus interest thereon at the Delayed Payment Interest Rate
(as defined in (d) below) computed from the date on which each such payment
otherwise would have been made to the Member until the Member’s Delayed Payment
Date.

           (b) If any such Member whose monthly pension payments are delayed
pursuant to (a) above should die before his or her Delayed Payment Date, his or
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  Pension Payments, plus interest thereon at the Delayed Payment Interest Rate
computed from the date on which each such payment otherwise would have been made
to the Member until the day before the date of payment, shall be paid, in a
single lump sum, to the Member’s surviving spouse if the Member is survived by a
spouse to whom the Member had been lawfully married for at least one year prior
to the Member’s death or, if the Member is not survived by such a spouse, to the
Member’s estate. Such payment shall be made by no later than seven business days
after the Corporation receives written notice of the Member’s death.      
     (c) In the case of any such Member whose Retirement Date occurs at any time
during 2005, the monthly pension payments scheduled to be made to such Member
during 2005 shall not be subject to delay in accordance with the provisions of
(a) above, to the extent such payments are in fact made on or prior to December
31, 2005. The payments so made shall be treated as having been made to such
Member upon his or her partial termination of participation in this Plan, for
purposes of Q & A 20 of IRS Notice 2005-1.

           (d) For purposes of (a) and (b) above, the “Delayed Payment Interest
Rate” shall mean, with respect to any Member any of whose monthly pension
payments are delayed pursuant to (a) above, the national average annual rate of
interest payable on jumbo six month bank certificates of deposit, as quoted in
the business section of the most recently published Sunday edition of the New
York Times preceding the Member’s Retirement Date.

           (e) Notwithstanding any delay in the payment of a Member’s pension
pursuant to this Section 3.7, payment of such Member’s pension shall be treated
as having commenced on the first day of the month following the Member’s
Retirement Date for purposes of Sections 3.5 and 4.2 and for all other purposes
of the Plan.

 

 

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ARTICLE IV

PAYMENT AND FORM OF PENSIONS

          Section 4.1 Payment of Pensions. All pensions payable pursuant to
Article II or Article III shall, upon application therefor by a Member, Former
Member, spouse or beneficiary and approval thereof by the Committee, be paid by
the Corporation, acting on the direction of the Committee, provided, however,
that the Corporation shall be obligated to pay a pension to which a Member,
Former Member, spouse or beneficiary is entitled by the terms of this Plan
notwithstanding the failure or refusal of the Committee to approve or direct
payment of such pension unless the Committee has a valid basis for such failure
or refusal by the terms of this Plan. Payment of pensions shall begin on the
first day of the month as provided in Article II or Article III and shall cease
after the first day of the month coinciding with or immediately preceding the
death of the Former Member, spouse or beneficiary.

          Section 4.2 Form of Pensions. The pension payable to a Member or
Former Member under Article II or Article III shall be paid in such form as the
Member or Former Member has elected, other than a single lump sum distribution
form, and provided that, on the day on which the Member or Former Member makes
such election, his elected form of payment is an authorized form of payment
under any Other Retirement Program in which the Member or Former Member is a
participant. If the pension the Member or Former Member receives under this Plan
is to be paid in a form other than a monthly pension payable only during the
lifetime of the Member or Former Member, such pension shall be adjusted so that
it is the actuarial equivalent of such lifetime only pension. The actuarial
factors used in determining such actuarial equivalent shall be the same
actuarial factors which are in use, on the day on which the pension hereunder
commences, by the Other Retirement Program to determine actuarial equivalence
for the same form of payment in which the Member’s or Former Member’s pension
hereunder is to be paid.

          An election as to the form of payment for the pension payable to a
Member or Former Member under Article II or Article III shall be made in
writing, shall specify the form of payment selected, and shall be filed with the
Committee no later than 30 days after such individual has become a Member
pursuant to Section 1.10 or, in the case of any individual who was a Member or
Former Member on May 1, 1989, by no later than June 30, 1989.

 

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          At the time such election is made, the Member or Former Member may
also elect an alternative form of payment for his pension hereunder, and have
payment of his pension made automatically in such alternative form in the event
that (a) in the case of a Member or Former Member who is single at the time of
his election, the Member or Former Member is married at the time payment of his
pension is to commence or (b) in the case of a Member or Former Member who is
married at the time of his election, such Member or Former Member is not married
or is legally separated at the time payment of his pension is to commence, or,
if at such time, the Member or Former Member’s spouse has a terminal illness.
The spouse of a Member or Former Member shall be treated as having a “terminal
illness” if the spouse has incurred any illness or injury that, in the judgment
of the Committee, has been determined by competent medical evidence to be likely
to result in the death of such spouse within a period of three years from the
date on which the terminal nature of such illness or injury was first
determined.

          A Member or Former Member may elect, as an alternative form of
payment, any form, other than a single lump sum distribution form, that, on the
day on which such election is made, is an authorized form of payment under any
Other Retirement Program in which the Member or Former Member is a participant.
Any individual who was a Member or Former Member on June 30, 1989, may elect an
alternative form of payment pursuant to the preceding paragraph by specifying in
writing the alternative form selected and filing same with the Committee no
later than 30 days after December 19, 1989.

          Any election made by a Member or Former Member as to the form of
payment, or alternative form of payment, of his pension hereunder shall be
irrevocable.

          Notwithstanding any other provision herein to the contrary, if under
the form of payment that a Member or Former Member has elected under this
Section 4.2 any amounts are otherwise payable to the Member’s or Former Member’s
spouse upon the death of the Member or Former Member, and if at the time of the
Member’s or Former Member’s death a federal estate tax marital deduction is
available for amounts passing to such Member’s or Former Member’s spouse only if
such amounts pass in a Qualified Domestic Trust, then the amounts so payable
shall not be paid to such spouse but shall be paid, instead, to a Qualified
Domestic Trust, if the Member or Former Member has so directed, either (x) in a
written instrument executed by the Member or Former Member and filed with the
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his death) or (y) in the Member or Former Member’s last will and testament. Any
payments to be made to a Qualified Domestic Trust pursuant to the preceding
sentence shall be made in the same amounts, and at the same times, as such
payments would have been made if payable directly to the Member’s or Former
Member’s spouse in the absence of such direction.

          Section 4.3 Conditions of Payment of Pensions. The payment of any
pension under this Plan to a Former Member, spouse or beneficiary is contingent
on the following:

       (a) that at no time either prior to or subsequent to retirement or other
termination of employment shall such Member or Former Member engage in any
business or other activity which, in the reasonable judgment of the Committee,
is competitive with any activity of an Affiliated Corporation, except that it
shall not be deemed a violation of this Section 4.3(a) or of Section 4.3(b) for
a Member or Former Member to engage in any such competitive activity after the
Corporation has terminated an employment agreement in effect with such Member or
Former Member if by the terms of such employment agreement the Member or Former
Member is not prohibited from engaging in such competitive activity immediately
following such termination by the Corporation;

           (b) that at no time either prior to or subsequent to his retirement
or other termination of employment shall such Member or Former Member violate
the provisions of his secrecy or invention agreements with the Corporation (if
the Member or Former Member is or was a party to the “Pall Corporation Employee
Agreement” substantially in the form annexed as Exhibit A to the Plan as amended
in October 1987, then said Employee Agreement shall be deemed a “secrecy or
invention agreement” referred to in this Section 4.3(B)), and

           (c) that such Member or Former Member shall not have been discharged
by the Corporation or another Affiliated Corporation as a result of gross
negligence or willful misconduct, and he shall not, while a Member, have engaged
in conduct which, had it been known at the time, would have resulted, on the
grounds of gross negligence or willful misconduct, in his discharge by the
Corporation or another Affiliated Corporation.

          If the Committee determines that such Member or Former Member has
violated any of the conditions of this Section it shall notify such Member or
Former Member and the obligation of the Corporation to make any payments to such
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spouse or beneficiary shall forthwith terminate, provided that no amount paid
prior to the date of such determination by the Committee shall be required to be
repaid. Any action by the Committee under this Section must be taken within one
year from the date by which the facts which constitute a violation of any of the
conditions of this Section have been brought to the attention of the Committee.

ARTICLE V

CERTAIN RIGHTS AND LIMITATIONS

          Section 5.1 Prohibition Against Alienation of Benefits. No benefit
under the Plan shall be subject in any manner to anticipation, sale, transfer,
assignment, pledge, encumbrance or charge, and any attempt so to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge the same shall be
void; nor shall any such benefit be in any manner liable for or subject to
garnishment, attachment, execution or levy, or liable for or subject to the
debts, contracts, liabilities, engagements or torts of the person entitled to
such benefits; and in the event that the Committee shall find that any Member,
Former Member or his spouse or beneficiary has become bankrupt or has attempted
to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge any
benefits under the Plan, then payment of such benefit shall, in the discretion
of the Committee, cease and terminate, and in that event the Committee shall
hold or apply the same to or for the benefit of such Member, Former Member or
spouse or the children or other dependents of the same, or beneficiary in such
manner and in such proportions as the Committee may deem proper, and any such
application shall be a complete discharge of all liabilities of the Corporation
therefor.

          Section 5.2 Incompetency. In the event that the Committee shall find
that a Member, Former Member or other person entitled to a benefit under the
Plan is unable to care for his affairs because of illness or accident or because
he is a minor, the Committee may direct that any benefit payment due him, unless
claim shall have been made therefor by a duly appointed guardian, committee or
other legal representative, be paid to a spouse, child, parent or other blood
relative of such person or to anyone found by the Committee to have incurred
expense for the support and maintenance of such person, and any such payment so
made shall be a complete discharge of all liabilities of the Corporation
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          Section 5.3 No Right to Continued Employment. The establishment and
continuation of the Plan by the Corporation shall not confer any legal rights
upon any Member or any person to continued employment, nor shall such
establishment or continuation interfere with the rights of the Corporation to
discharge any Member and to otherwise treat him without regard to the effect
which such discharge might have upon him as a Member.

          Section 5.4 Payment of Taxes. The Corporation shall have the right to
deduct and withhold from any amount which it is otherwise obligated to pay under
the Plan any amount which it may be required to deduct or withhold pursuant to
any applicable statute, law, regulation or order of any jurisdiction whatsoever.
The Corporation shall not be required to pay any amount to the spouse or
beneficiary of any deceased Member pursuant to Article III until such spouse,
beneficiary or the legal representatives of the deceased Member shall have
furnished the Committee with evidence satisfactory to the Corporation of the
payment or the provision for the payment of any estate, transfer, inheritance or
death taxes which may be payable with respect thereto.

ARTICLE VI

ADMINISTRATION OF THE PLAN

          Section 6.1 Appointment of Committee. The Board of Directors shall
appoint a Committee of not less than three nor more than five persons who shall
serve at the pleasure of said Board. Any vacancy in the Committee arising by
death, resignation or otherwise shall be filled by the Board of Directors.

          Section 6.2 Duties and Powers of the Committee. The Committee shall be
responsible for the control and management of the operation and administration
of the Plan and the proper execution of its provisions. It shall also be
responsible for the construction of the Plan and the determination of all
questions arising hereunder. It shall maintain all necessary books of accounts
and records. In furtherance of the foregoing, the Committee shall have the sole
power and responsibility (i) to establish, interpret, enforce, amend and revoke
from time to time such rules and regulations for the administration of the Plan
and the conduct of its business as it deems appropriate, provided such rules and
regulations are uniformly applicable to all persons similarly situated, (ii) to
receive and approve or disapprove (where approval is required) elections of
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entitlement of Members, Former Members and their spouses and beneficiaries to
benefits under the Plan and to decide any disputes which may arise relative to
the rights of the Members, Former Members and their spouses and beneficiaries
with respect to such benefits, and (iii) to keep all appropriate records and
data pertaining to the interests of the Members, Former Members and their
spouses and beneficiaries in the Plan. Any action which the Committee is
required or authorized to take shall, to the extent permitted by applicable law,
be final and binding upon each and every person who is or may become interested
in the Plan, provided, however, that nothing in this Section 6.2 is intended to
or shall be deemed or construed to empower the Committee to deny to any person a
pension to which such person is entitled by the terms of this Plan other than
this Section 6.2 or to deprive any person of the right to a determination by a
court of competent jurisdiction of whether such person is entitled to a pension
pursuant to this Plan and of the amount and other terms of such pension.

          Section 6.3 Conduct of Affairs of Committee. The Committee shall hold
such meetings upon such notice at such place or places and at such times as it
may from time to time deem appropriate. The Committee may act by a majority of
its members in office from time to time. The action of such majority may be
taken at a meeting of the Committee or pursuant to written consent of such
majority without a meeting. It shall elect from time to time one of its own
members to act as Chairman and a different person, who may but need not be a
member of the Committee, to act as Secretary. It may authorize any one or more
of its members to execute and deliver any documents on behalf of the Committee.

          Section 6.4 Expenses and Liability. The expenses of administering the
Plan shall be paid by the Corporation. The members of the Committee shall serve
without compensation for their services as such, but shall be reimbursed by the
Corporation for any expenses they may individually or collectively incur in the
performance of their duties hereunder. No member of the Committee shall be
personally liable for anything done or omitted to be done by him unless it shall
have been judicially determined that the member failed to perform his duties
under the Plan in good faith and in a prudent manner.

          Section 6.5 Indemnification of Committee Members. The Corporation
shall, to the maximum extent permitted under applicable law, indemnify each
member of the Committee from and against any and all claims, actions, demands,
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arising from any act or omission of the member in connection with the
performance of his duties hereunder and for which the member is not reimbursed
or otherwise made whole under any contract or contracts of insurance maintained
by the Corporation for the purpose of indemnifying the member from and against
any and all such claims, actions, demands, losses, damages, expenses and
liabilities which may arise therefrom. Such indemnification shall include
attorneys’ fees and all other costs and expenses reasonably incurred by the
member in defense of any claim or action brought or asserted against him arising
from such act or omission. Notwithstanding the foregoing, the Corporation shall
not indemnify any member of the Committee with respect to any claims, actions,
demands, losses, damages, expenses and liabilities arising from any act or
omission of the member with respect to the performance of his duties hereunder
if such act or omission is deemed by the Corporation to constitute gross
negligence, willful misconduct, criminal conduct or dealing with the Plan for
his own benefit or for his own account.

          Section 6.6 Claims Procedure. A Member, Former Member, spouse or
beneficiary may claim any benefits under the Plan which such person believes is
properly payable pursuant to the provisions of the Plan by filing an application
therefor. Such claim shall be filed with the Committee on a form approved by it.
The claim shall be approved or denied by the Committee within ninety (90) days
after the claim was filed. If the Committee in its sole discretion determines
that special circumstances exist which require an extension of time to process
the claim, the Committee shall (i) give the claimant written notice, within
ninety (90) days after the claim was filed, specifying the special circumstances
and the expected date of a decision on the claim and (ii) approve or deny the
claim within 180 days after the claim was filed.

          If the claim is denied in full or in part, the claimant shall be given
written notice setting forth, in a manner calculated to be understood by the
claimant, (i) the specific reason or reasons for such denial, (ii) specific
reference to the pertinent provision or provisions of the Plan upon which such
denial was based, (iii) a description of any additional information,
documentation or other material necessary for the claimant to perfect his claim
and an explanation of why such information, documentation or other material is
necessary, and (iv) an explanation of the procedure for obtaining a review of
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his duly authorized representative may request a review of the denial of the
claim by filing with the secretary of the Committee a written request for review
within, and only within, the period of sixty (60) days commencing with the date
the denial of the claim was posted by registered or certified mail to the
claimant. The claimant and his duly authorized representative shall be given a
reasonable opportunity to review the documents of the Plan and to submit their
written issues and comments to the Committee at any time prior to the expiration
of the aforesaid 60-day period.

          Within the period of sixty (60) days of the date a request for review
of a denial of claim is received by the Committee, the Committee shall consider
the request and post its final decision to the claimant by registered or
certified mail. In the event that the Committee in its sole discretion
determines that a hearing is warranted, and a hearing is held before the
Committee (at which hearing the claimant and his duly authorized representative
shall be given a reasonable opportunity to present their views), or in the event
that the Committee determines that the case otherwise presents special
circumstances requiring an extension of time for processing the request for
review, the Committee shall (i) give the claimant written notice of the
extension within sixty (60) days after receiving the request for review and (ii)
post its final decision to the claimant by registered or certified mail not
later than 120 days after the date the request for review was received by the
Committee. Such decision shall be written in a manner calculated to be
understood by the claimant, and shall fully set forth the reason or reasons for
the decision, with specific references to the pertinent provision or provisions
of the Plan upon which the decision was based.

ARTICLE VII

CONTRACTUAL OBLIGATION

          The obligation of the Corporation under this Plan to make payments of
pensions when due is merely contractual, and all such pensions shall be paid
from the general revenues of the Corporation. Nothing contained in this Plan
shall require the Corporation to segregate or earmark any cash or other property
for any Member, Former Member, spouse or beneficiary.

 

 

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ARTICLE VIII

AMENDMENT AND TERMINATION

          Section 8.1 Amendment and Termination. The Plan may not be amended or
terminated, in whole or in part, without the written consent of (a) each Member,
(b) each Former Member and (c) any spouse or beneficiary of a Member or Former
Member who at the time of the proposed amendment or termination is receiving
benefits under the Plan subsequent to the death of the Member or Former Member.
Notwithstanding the foregoing, no such consent shall be required from a Member,
Former Member, spouse or beneficiary as to whom the proposed amendment to, or
termination of, the Plan would not under any circumstances or at any time reduce
the benefits payable under the Plan to such Member, Former Member, spouse or
beneficiary.

          Section 8.2 Successors and Assigns. The Plan shall be binding upon and
inure to the benefit of the Corporation and its successors and assigns, but no
assignment shall relieve the Corporation of any of its obligations or
liabilities hereunder to a Member, Former Member, spouse or beneficiary without
the written consent of such person.

ARTICLE IX

CONSTRUCTION

          9.1 Governing Law. This Plan shall be governed by and construed in
accordance with the laws of the State of New York.

          9.2 Words and Headings. As used herein, the masculine gender shall be
deemed to refer to the feminine, and the singular person shall be deemed to
refer to the plural, wherever appropriate. The headings of Articles and Sections
are inserted for convenience and reference only, and in the event of any
conflict between the text of any provision of the Plan and the heading thereof,
the text shall control.

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SUPPLEMENTARY PENSION PLAN

APPENDIX A (as amended on March 28, 2003)

     Anything in Section 1.8 to the contrary notwithstanding: (a) in the case of
each Member who on March 16, 1987 held the office of Chairman of the Board
(David B. Pall), Vice Chairman of the Board (Abraham Krasnoff) or President
(Maurice G. Hardy) of the Corporation, the term “Final Average Compensation”
means one-half of the aggregate of such Member’s Compensation for the two (2)
Plan Years in which his Compensation was highest out of the last ten (10) Plan
Years in which he was a Member; (b) in the case of Henry Petronis, who on
March 16, 1987 held the office of Executive Vice President of the Corporation,
the term “Final Average Compensation” means one-half of the aggregate of such
Member’s Compensation for the two (2) Plan Years in which his Compensation was
highest out of the last five (5) Plan Years in which he was a Member; (c) in the
case of Stanley Wernick, who on April 28, 1992 held the office of Senior Vice
President and Treasurer and Chief Financial Officer of the Corporation, the term
“Final Average Compensation” means one-half of the aggregate of such Member’s
Compensation for the two (2) Plan Years in which his Compensation was highest
out of the last five (5) Plan Years in which he was a Member; (d) in the case of
Arnold Weiner, who on October 6, 1997 was a Group Vice President of the
Corporation, the term “Final Average Compensation” means one-third of the
aggregate of his Compensation for the three (3) Plan Years in which his
Compensation was highest out of the last seven (7) Plan Years in which he was a
Member; and (e) in the case of Charles Grimm, for the purpose of determining his
Final Average Compensation under § 1.8, his compensation for the Plan Year
ending July 31, 2003 shall be deemed to include a bonus of the greater of (i)
70% of the Base Salary payable to him for said Plan Year under his Employment
Agreement dated November 15, 2001 as amended by Amendment dated July 16, 2002,
or (ii) the Bonus Compensation in fact payable to him for said Plan Year under
said Employment Agreement as so amended.

 

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SUPPLEMENTARY PENSION PLAN

APPENDIX B

     Supplementing Section 1.10, “Member” means, in addition to the persons
identified therein, the following :     

       (e) each person who on October 20, 1980 held the office of President of
either of the following Affiliated Corporations:

                    Mectron Industries Inc.

                    Pallflex, Inc.;

       (f) the person who, on July 6, 1986, held the office of President of Pall
Pneumatic Products Corporation (an Affiliated Corporation); and

           (g) Roy Sheaff, who on May 1, 1990 was an appointed vice president of
the Corporation.

 

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