<PAGE>

                                                                  EXHIBIT 10.11


                                                         [SENIOR VICE PRESIDENT
                                                                   SPLIT BONUS]


         EMPLOYMENT AGREEMENT dated August 1, 2004 between PALL CORPORATION, a
New York corporation (the "Company") and James R. Western, Jr. ("Executive").

         In consideration of the mutual agreements hereinafter set forth, the
parties hereto agree as follows:

SECTION 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 August
1, 2004 (the "Term Commencement Date") 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 first anniversary of the date on which such notice is given.

SECTION 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 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.

         (b)      If 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.

SECTION 3. COMPENSATION DURING TERM OF EMPLOYMENT

         (a)      Base Salary. With respect to the period beginning on the Term
                  Commencement Date and ending on the 31st day of July next
                  following the Term Commencement Date, the Company shall pay
                  Executive a Base Salary (in addition to the compensation
                  provided for elsewhere in this Agreement) at the rate of
                  $175,000 per annum (hereinafter called the "Original Base
                  Salary"). With respect to each Contract Year beginning with
                  the Contract Year which starts on the first day of August next
                  following the Term Commencement Date, the Company shall pay
                  Executive a Base Salary at such rate as the Board of Directors
                  may determine but not less than the Original Base Salary
                  adjusted 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. The term "Consumer Price Index" as herein
                  used means the "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
                  N.J. - Long Island, NY-NJ-CT-PA". For each Contract Year
                  during the Term of Employment beginning with the Contract Year
                  which starts on the first day of August next following the
                  Term Commencement Date, the minimum compensation payable to
                  Executive under this ss.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 for the
                  month of June immediately preceding the start of the Contract
                  Year in question over (or below) the Consumer Price Index for
                  the month of June next preceding the Term Commencement Date.
                  [To illustrate the operation of the foregoing provisions of
                  this paragraph: In an Employment Agreement as to which



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                  the Term Commencement Date was August 1, 2004, the executive's
                  base salary for the Contract Year August 1, 2005 through July
                  31, 2006 would be not less than the Original Base Salary under
                  that Employment Agreement adjusted by the percentage increase
                  (or decrease) of the Consumer Price Index for June 2005 over
                  (or below) said Index for June 2004.] 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 the month of June next preceding the Term Commencement
                  Date 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 on the first day of August next
                  following the Term Commencement Date) the Board of Directors
                  fixes the Base Salary at an amount higher than the Minimum
                  Base Salary, then (unless the order 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. [To illustrate the operation of
                  the foregoing provisions of this paragraph: If the Board of
                  Directors were to fix a Base Salary for a Contract Year
                  beginning, say, August 1, 2006 which is higher than the
                  Minimum Base Salary for that Contract Year, then June 2006
                  would become the base month for the purposes of making the
                  Consumer Price Index adjustment to determine the Minimum Base
                  Salary for subsequent Contract Years unless and until the
                  Board of Directors were to fix a Base Salary higher than the
                  Minimum Base Salary for a subsequent Contract Year.]



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         (b)      Bonus Compensation.

                           (i) Plan Bonus. As used herein, the term "Bonus Plan"
                  means the Pall Corporation Executive Incentive Bonus Plan
                  adopted by the Compensation Committee of the Board of
                  Directors of the Company on July 17, 2001, approved by
                  shareholders at the annual meeting of shareholders on November
                  14, 2001 and amended by the Compensation Committee on July 16,
                  2002 and November 1, 2002 effective for the Fiscal Year
                  beginning August 4, 2002, a copy of which is annexed hereto
                  and incorporated herein by reference. Words and terms used
                  herein with initial capital letters and not defined herein are
                  used herein as defined in the Bonus Plan. 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 ending
                  on the Saturday nearest to the 31st day of the month of July
                  next following the Term Commencement Date:

                           o        if Executive is a member of the Operating
                                    Committee of the Company, Executive shall be
                                    eligible to receive a Bonus pursuant to and
                                    in accordance with the terms of the Bonus
                                    Plan; or

                           o        if Executive is not a member of the
                                    Operating Committee, Executive shall be
                                    entitled to receive a Bonus pursuant to this
                                    Agreement in an amount determined in
                                    accordance with and subject to all of the
                                    terms of the Bonus Plan.

                  For purposes of determining the amount of the Bonus payable to
                  Executive for any Fiscal Year as provided in this ss.3(b)(i)
                  (the "Plan Bonus"), Executive's Target Bonus Percentage shall
                  be 42% of his Base Salary for such Fiscal Year.

                         (ii) Business Segment Bonus. Inasmuch as Executive's
                  services for the Company relate primarily to the operations of
                  a subsidiary, a division or other segment of the overall
                  operations of the Company and its subsidiaries (a "Business
                  Segment"), Executive shall be considered for additional bonus
                  compensation for each Fiscal Year based on the results of
                  operations of such Business Segment for such Fiscal Year. The
                  amount of such additional bonus compensation, if any, shall be
                  determined by the Chief Executive Officer in his sole
                  discretion but in no event shall such additional bonus
                  compensation exceed 63% of Executive's Base Salary.


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                           (iii) Payment of Bonus Compensation. Executive's
                  Bonus Compensation (which term as used herein includes both
                  the Plan Bonus and the Business Segment Bonus, if any) shall
                  be paid in accordance with ss.5 of the Bonus Plan. With
                  respect to any Fiscal Year which falls in part but not in
                  whole within the Term of Employment, the pro rata portion of
                  the Bonus Compensation to which Executive is entitled under
                  this ss.3(b) shall be determined in accordance with ss.3(c) of
                  the Bonus Plan.

         (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.

SECTION 4. TERMINATION BY REASON OF DISABILITY, DEATH, RETIREMENT OR CHANGE IN
           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



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                  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 each month in 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 of (I) an amount equal to
                  1/12th of one-half of the annual Base Salary in effect for
                  Executive immediately prior to the date on which Executive's
                  death or termination for disability occurs, plus (II) an
                  amount equal to 1/12th of one-half of the maximum Bonus
                  Compensation that Executive could receive with respect to each
                  of such months based on (A) the Target Bonus Percentage
                  specified in ss. 3(b)(i) of this Agreement (as amended to the
                  date on which Executive's death or disability occurs) and (B)
                  the maximum percentage of Base Salary specified in ss.
                  3(b)(ii) of this Agreement (as so amended).

         (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 the latter 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 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 ss.4(b) 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



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                  Compensation prorated to the date on which the Term of
                  Employment ends. (iii) Anything hereinabove to the contrary
                  notwithstanding, if any provision of this ss.4(b) 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 in Control. In event of a Change in Control (as defined
                  in the Bonus Plan), Executive shall have the right to
                  terminate the Term of Employment, by notice to the Company
                  given at any time after such Change in 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.

SECTION 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 in Control (as defined in the Bonus Plan), the foregoing
covenant not to compete shall not apply.

SECTION 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.


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SECTION 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.

SECTION 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.

SECTION 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.



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SECTION 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.

SECTION 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.

SECTION 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.

SECTION 13. NOTICES

          All notices given hereunder shall be in writing and shall be sent by
registered or certified mail, overnight courier service such as Federal Express
or UPS Next Day Air 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 Corporate 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 delivery to the overnight courier service or, if delivered
personally, on the date so delivered.



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SECTION 14. TERMINATION OF EXISTING AGREEMENT

          Any employment agreement between the parties hereto which is in effect
on the date hereof is hereby terminated and replaced and superseded by this
Agreement effective on the Term Commencement Date. All payments, of Base Salary
or otherwise, made by the Company under any such existing agreement with respect
to any period commencing on or after the Term Commencement Date shall be
credited against the corresponding payment obligations of the Company under this
Agreement with respect to such period.

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

                                 PALL CORPORATION


                                 BY:
                                     ------------------------------------------
                                     NAME:  MARCUS WILSON
                                     TITLE: PRESIDENT

                                 EXECUTIVE

                                 ---------------------------------
                                 JAMES R. WESTERN, JR.



[Form prepared 2/03]




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                                PALL CORPORATION

                         EXECUTIVE INCENTIVE BONUS PLAN

                                      -----


1. PURPOSE

         This document sets forth the Pall Corporation Executive Incentive Bonus
Plan as adopted by the Committee on and effective July 17, 2001, approved by
shareholders on November 14, 2001 and amended by the Committee on July 16, 2002
and November 1, 2002 effective for the Fiscal Year beginning August 4, 2002.

         The purpose of the Plan is to encourage greater focus on performance
among the key executives of the Corporation by relating a significant portion of
their total compensation to the achievement of annual financial objectives.

2. CERTAIN DEFINITIONS

         As used herein with initial capital letters, the following terms shall
have the following meanings:

         "AVERAGE EQUITY" shall mean, for any Fiscal Year, the average of
stockholders' equity as shown on the fiscal year-end consolidated balance sheet
of the Corporation and its subsidiaries as of the end of such Fiscal Year and as
of the end of the immediately preceding Fiscal Year except that the amounts
shown on said balance sheets as "Accumulated other comprehensive" income or
loss, as the case may be, shall be disregarded.

         "BASE SALARY" shall mean, with respect to any Executive and for any
Fiscal Year, the annual rate of base salary in effect for the Executive as of
the first day of such year or, if later, as of the first day of the Executive's
Term of Employment, as determined under the Executive's Employment Agreement.

         "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Corporation.

         "BONUS" shall mean the bonus payable to an Executive under this Plan
for any Fiscal Year.

         "CEO" shall mean the Chief Executive Officer of the Corporation.

         "CHANGE IN CONTROL" means the occurrence of any of the following:

         (a) the "Distribution Date" as defined in Section 3 of the Rights
Agreement dated as of November 17, 1989 between the Corporation and United
States Trust Company of New York as Rights Agent, as amended by Amendment No. 1
thereto 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



<PAGE>


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

         (c) any event described in Section 13 of the Rights Agreement; or

         (d) the date on which the number of duly elected and qualified
directors of the Corporation who were not either elected by the Board of
Directors or nominated by the Board of Directors or its Nominating Committee for
election by the shareholders shall equal or exceed one-third of the total number
of directors of the Corporation as fixed by its by-laws;

         provided, however, that no Change in Control shall be deemed to have
occurred, and no rights arising upon a Change in Control as provided in Section
6 shall exist, to the extent that the Board of Directors so determines by
resolution adopted prior to the Change in Control.

         "CODE" shall mean the Internal Revenue Code of 1986, as amended.

         "COMMITTEE" shall mean the Compensation Committee of the Board of
Directors.

         "CORPORATION" shall mean Pall Corporation.

         "COVERED EXECUTIVE" shall mean, with respect to any Fiscal Year, each
individual who is a "Covered Employee" of the Corporation for such year for the
purpose of section 162(m) of the Code.

         "EMPLOYMENT AGREEMENT" shall mean, with respect to any executive
employee of the Corporation, an employment agreement between the Corporation and
such employee which provides that the employee shall be eligible to receive
annual bonuses under this Plan.

         "EXECUTIVE" shall mean an executive employee of the Corporation with
whom the Corporation has entered into an Employment Agreement.

         "FISCAL YEAR" shall mean the fiscal year of the Corporation ending on
August 3, 2002, and each subsequent fiscal year of the Corporation.

         "MAXIMUM R.O.E. TARGET" shall mean, for any Fiscal Year, the Return on
Equity that must be achieved or exceeded in order for the Performance Percentage
for the year to equal 100%, as determined by the Committee prior to the first
day of such year or within such period of time thereafter as may be permitted
under the regulations issued under section 162(m) of the Code.

         "MINIMUM R.O.E. TARGET" shall mean, for any Fiscal Year, the Return on
Equity that must be exceeded in order for any Bonus to be paid to any Executive
for the year, as determined by the Committee prior to the first day of such year
or within such period of time thereafter as may be permitted under the
regulations issued under section 162(m) of the Code.

         "NET EARNINGS" shall mean, for any Fiscal Year, the after-tax
consolidated net earnings of the Corporation and its subsidiaries as certified
by the Corporation's independent accountants for inclusion in the annual report
to shareholders ("Annual Report"), adjusted so as to eliminate the effects of
any decreases in or charges to earnings for (a) the effect of foreign currency
exchange rates, (b) any acquisitions, divestitures, discontinuance of business
operations, restructuring or any other special charges, (c) the cumulative
effect of any accounting changes, and (d) any "extraordinary items" as
determined under generally accepted accounting principles, to the extent such
decreases or charges referred to in clauses (a) through (d) are separately
disclosed in the Corporation's Annual Report for the year.


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<PAGE>

         "PLAN" shall mean the Pall Corporation Executive Incentive Bonus Plan,
as set forth herein and as amended from time to time.

         "RETURN ON EQUITY" shall mean, for any Fiscal Year, the percentage
determined by dividing the Net Earnings for the year by the Average Equity for
the year.

         "TARGET BONUS PERCENTAGE" shall mean, with respect to any Executive,
the target bonus percentage specified for such Executive in his or her
Employment Agreement.

3. DETERMINATION OF BONUS AMOUNTS

         For each Fiscal Year falling in whole or in part within an Executive's
Term of Employment, as defined in his or her Employment Agreement, the Executive
shall be entitled to receive a Bonus in an amount determined in accordance with
the provisions of this Section 3, subject, however, to the provisions of Section
4.

         (a) The amount of the Bonus payable to an Executive for each such
Fiscal Year shall be equal to (i) the Target Bonus Percentage of the Executive's
Base Salary for such year, multiplied by (ii) the Performance Percentage for
such year, as determined under (b) below.

         (b) The Performance Percentage for any Fiscal Year shall be determined
in accordance with he following provisions:

                  (i) If the Return on Equity equals or exceeds the Maximum
         R.O.E. Target for the year, the Performance Percentage for the year
         shall be 100%.

                  (ii) If the Return on Equity is less than the Maximum R.O.E.
         Target for the year but exceeds the Minimum R.O.E. Target for the year,
         the Performance Percentage for the year shall be equal to the quotient
         resulting from dividing (A) the excess of the Return on Equity for the
         year over the Minimum R.O.E. Target for the year, by (B) the excess of
         the Maximum R.O.E. Target for the year over the Minimum R.O.E. Target
         for the year.

                  (iii) If the Return on Equity equals or is less than the
         Minimum R.O.E. Target for the year, the Performance Percentage for the
         year shall be zero, and no Bonus shall be payable under the Plan for
         such year to any Executive.

         (c) If an Executive's Term of Employment commences after the start of a
Fiscal Year, or ends prior to the close of a Fiscal Year, the amount of the
Bonus payable to the Executive for the Fiscal Year in which the Executive's Term
of Employment commences, or for the Fiscal Year in which the Executive's Term of
Employment ends, as determined in accordance with the other applicable
provisions of the Plan, shall be prorated on the basis of the number of days of
such Fiscal Year that fall within the Executive's Term of Employment; provided,
however, that (i) if an Executive's Term of Employment ends within 5 days prior
to the close of a Fiscal Year, there shall be no proration and the Executive
shall be entitled to receive the entire amount of the Bonus payable to the
Executive for such year, as determined in accordance with such other provisions,
and (ii) if the Executive's Term of Employment ends within 5 days following the
start of a Fiscal Year, the Executive shall not be entitled to receive any Bonus
with respect to such Fiscal Year.


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<PAGE>

4. ADJUSTMENT OF AND LIMITATION ON BONUS AMOUNTS

         The amount of the Bonus otherwise payable to an Executive for any
Fiscal Year in accordance with Section 3 shall be subject to the following
adjustments and limitation:

         (a) The Committee may, in its discretion, reduce the amount of the
Bonus otherwise payable to any Executive in accordance with Section 3, (i) to
reflect any decreases in or charges to earnings that were not taken into account
in determining Net Earnings for the year pursuant to clause (a), (b), (c) or (d)
contained in the definition of such term in Section 2, (ii) to reflect any
credits to earnings for extraordinary items of income or gain that were taken
into account in determining Net Earnings for the year, (iii) to reflect the
Committee's evaluation of the Executive's individual performance, or (iv) to
reflect any other events, circumstances or factors which the Committee believes
to be appropriate in determining the amount of the Bonus to be paid to the
Executive for the year.

         (b) The Committee may, in its discretion, increase the amount of the
Bonus otherwise payable to any Executive who is not a Covered Executive, as
determined under Section 3, to reflect the Committee's evaluation of the
Executive's individual performance, or to reflect such other circumstances or
factors as the Committee believes to be appropriate in determining the amount of
the Bonus to be paid to the Executive for the year. The Committee shall not have
any discretion to increase the amount of the Bonus payable to any Covered
Executive for the year, as determined under Section 3.

         (c) Notwithstanding any other provision herein to the contrary, the
amount of the Bonus otherwise payable to any Executive for any Fiscal Year shall
not exceed the lesser of (i) $1.0 million and (ii) 100% of the Executive's Base
Salary for the Fiscal Year ending August 3, 2002 and 150% of the Executive's
Base Salary for each subsequent Fiscal Year.

5. PAYMENT OF BONUSES

         The Bonus payable to an Executive for any Fiscal Year shall be paid in
accordance with the following provisions:

         (a) Except as otherwise provided in (b) or (c) below,

                  (i) if the Executive is not a Covered Executive for such year,
         50% of the estimated amount of the Executive's Bonus shall be paid to
         the Executive on such date in September next following the close of
         such year as the Committee in its discretion shall determine (the first
         "Bonus Payment Date"), and the remaining amount of the Executive's
         Bonus shall be paid to the Executive by no later than January 15 next
         following the close of such year;



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<PAGE>

                  (ii) if the Executive is a Covered Executive for such year,
         50% of the amount of the Executive's Bonus shall be paid to the
         Executive as soon as practicable after the Committee has certified in
         writing that all conditions for the payment of such Bonus to the
         Executive for such year have been satisfied, and the remaining amount
         of the Executive's Bonus shall be paid to the Executive by no later
         than January 15 next following the close of such year;

                  (iii) each amount payable to an Executive under (i) and (ii)
         above, reduced by the amount of all federal, state and local taxes
         required by law to be withheld therefrom, shall be paid to the
         Executive in the form of a single lump sum cash payment.

         (b) To the extent that an Executive has elected under the applicable
provisions of the Pall Corporation Management Stock Purchase Plan (the "MSPP")
to have any part of the Bonus payable to the Executive for any Fiscal Year paid
in the form of Restricted Units to be credited to the Executive's account under
the MSPP, no cash payments shall be made to the Executive pursuant to (a) above
with respect to the part of the Executive Bonus that is subject to such
election; and the obligation of the Corporation under this Plan with respect to
payment of such part of the Executive's Bonus shall be fully discharged upon the
crediting of Restricted Units to the Executive's account under the MSPP in
accordance with the applicable provisions of such Plan.

         (c) To the extent that an Executive has elected under the applicable
provisions of the Pall Corporation Profit-Sharing Plan (the "Profit-Sharing
Plan") to have any part of the Bonus payable to the Executive for any Fiscal
Year reduced, and to have an amount equal to such part of the Executive's Bonus
contributed to the Profit-Sharing Plan as a 401(k) Contribution on the
Executive's behalf, an amount equal to such part of the Executive's Bonus shall
be contributed to the Profit-Sharing Plan on behalf of the Executive; and
thereupon, the obligation of the Corporation under this Plan with respect to
payment of such part of the Executive's Bonus shall be fully discharged.
However, no such contribution shall be made to the extent it would cause any
limitation applicable under the 401(k) Plan to be exceeded.

6. CHANGE IN CONTROL

         Notwithstanding any other provision in the Plan to the contrary (but
subject to the "provided, however" clause contained in the definition of "Change
in Control" in Section 2), upon the occurrence of a Change in Control, the
following provisions shall apply.

         (a) The amount of the Bonus payable to any Executive for the Fiscal
Year in which a Change in Control occurs shall be at least equal to the Target
Bonus Percentage of the Executive's Base Salary for such year or, in the case of
any Executive whose Term of Employment commences after the start of such year or
ends prior to the close of such year, a pro rata portion thereof determined on
the basis of the number of days of such Fiscal Year that fall within the
Executive's Term of Employment.


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<PAGE>

         (b) Each Executive whose Term of Employment has not ended prior to the
occurrence of a Change in Control shall be entitled to receive a Bonus for each
Contract Year (as defined in the Executive's Employment Agreement) that falls in
whole or in part within the Executive's Term of Employment and that ends after
the Fiscal Year in which the Change in Control occurs. The amount of the Bonus
payable to the Executive for each such Contract Year shall be at least equal to
the Target Bonus Percentage of the Executive's Base Salary for such Contract
Year or, in the case of any Executive whose Term of Employment ends after the
start of such Contract Year but prior to the close of such year, a pro rata
portion thereof determined on the basis of the number of days of such Contract
Year that fall within the Executive's Term of Employment.

         (c) The entire amount of the Bonus payable to an Executive for any
Fiscal Year or Contract Year pursuant to (a) or (b) above, reduced by the amount
of all federal, state and local taxes required to be withheld therefrom, shall
be paid to the Executive in a single cash lump sum as soon as practicable after
the close of such Fiscal Year or Contract Year.

7. RIGHTS OF EXECUTIVES

         An Executive's rights and interests under the Plan shall be subject to
the following provisions:

         (a) An Executive's rights to payments under the Plan shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, or garnishment by creditors of the Executive.

         (b) Neither the Plan nor any action taken hereunder shall be construed
as giving any Executive any right to be retained in the employment of the
Corporation or any of its subsidiaries.

8. ADMINISTRATION

         The Plan shall be administered by the Committee. A majority of the
members of the Committee shall constitute a quorum. The Committee may act at a
meeting, including a telephone meeting, by action of a majority of the members
present, or without a meeting by unanimous written consent. In addition to the
responsibilities and powers assigned to the Committee elsewhere in the Plan, the
Committee shall have the authority, in its discretion, to establish from time to
time guidelines or regulations for the administration of the Plan, interpret the
Plan, and make all determinations considered necessary or advisable for the
administration of the Plan.

         The Committee may delegate any ministerial or nondiscretionary function
pertaining to the administration of the Plan to any one or more officers of the
Corporation.


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<PAGE>


         All decisions, actions or interpretations of the Committee under the
Plan shall be final, conclusive and binding upon all parties. Notwithstanding
the foregoing, any determination made by the Committee after the occurrence of a
Change in Control that denies in whole or in part any claim made by any
individual for benefits under the Plan shall be subject to judicial review,
under a "de novo", rather than a deferential standard.

9. AMENDMENT OR TERMINATION

         The Board of Directors may, with prospective or retroactive effect,
amend, suspend or terminate the Plan or any portion thereof at any time;
provided, however, that (a) no amendment, suspension or termination of the Plan
shall adversely affect the rights of any Executive with respect to any Bonus
that has become payable to the Executive under the Plan, without his or her
written consent, and (b) following a Change in Control, no amendment to Section
6, and no termination of the Plan, shall be effective if such amendment or
termination adversely affects the rights of any Executive under the Plan.

10. SUCCESSOR CORPORATION

         The obligations of the Corporation under the Plan shall be binding upon
any successor corporation or organization resulting from the merger,
consolidation or other reorganization of the Corporation, or upon any successor
corporation or organization succeeding to substantially all of the assets and
business of the Corporation. The Corporation agrees that it will make
appropriate provision for the preservation of Executives' rights under the Plan
in any agreement or plan which it may enter into or adopt to effect any such
merger, consolidation, reorganization or transfer of assets.

11. GOVERNING LAW

         The Plan shall be governed by and construed in accordance with the laws
of the State of New York.

12. EFFECTIVE DATE

         The Plan was adopted effective as of July 17, 2001 by the Board of
Directors, acting by the Committee, subject, however, to approval by the
shareholders of the Corporation by a majority of the votes cast in person or by
proxy at the 2001 annual meeting of the Corporation's shareholders, including
any adjournment thereof. The Plan was approved by shareholders on November 14,
2001 and amended by the Committee on July 16, 2002 and November 1, 2002
effective for the Fiscal Year beginning August 4, 2002.




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